Category: Fixed asset management

Establishing strong inventory cutoff analysis

Physical inventory counts are an important part of any fixed asset accounting. A consistent count on a continuous basis ensures that the general ledger has a reliable answer when it comes to evaluating the overall property and value of the company. However, completing counts can be a difficult task, simply because the nature of the business means stopping operations long enough to do a count may be impractical. Developing a regular cutoff on inventory receivables can help strengthen a company's control over its assets. Through cutoff analysis and effective planning, an up-to-date value of the company can be attained. Where to stop…

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Applying generally accepted auditing standards to inventory auditors

Fixed assets should undergo audits on a regular basis. This helps ensure that inventory is consistent and secure, so that valuations are accurate for compliance with regulatory agencies, as well as during tax season. Accuracy can affect companies in numbers exceeding millions of dollars. In order to properly develop a strategy for executing audits on a regular and as-needed basis depending on the circumstances, there are people that must be hired outside the company to do this. The auditors assigned to the job should have the competency and independence to manage the job in order to successfully complete the audit…

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Why spreadsheet use can be dangerous for asset management

One of the major concerns regarding fixed asset management can be getting the correct information on hand. Getting the depreciation values of a given property right can help companies save money, both over the course of the year and during tax season. It also helps make accountants and companies aware of any discrepancies in the available inventory, such as missing goods or equipment that was sold off. However, the information is only as good as the people that provide it and the software that stores it. Spreadsheets are the most popular method of inputting data. However, it also happens to be…

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Implementing a proper auditing strategy

When running a large business with multiple properties and a significant amount of equipment, it's important for companies to conduct asset accounting with as much clarity as possible. In this way, not only do employees have access to the correct equipment, but they also have an accurate value of the company for shareholders, regulators and tax agencies. Thus, a regular audit is necessary to get an understanding of a company's fixed assets. However, auditing is a long process and requires a considerable level of detail to cover everything on hand. Developing a strategy for internal audits may prove useful in the long term…

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Why equipment fails

Among the most important fixed assets a company may have is its equipment. These machines represent a core component of the business, and in some verticals, represent the firm's infrastructural capital. It's necessary to monitor and protect these assets through fixed asset management. However, equipment can and will fail, sometimes prematurely. Properly predicting possible causes of equipment failure, combined with preventative maintenance, can help manufacturers, contractors and other small-to-midsized enterprises maintain steady operations because the machines keep running. It can also help in understanding the depreciation value of such equipment to help mitigate an eventual loss. In order to attain that…

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