It’s important for your company to have a successful fixed asset tracking system in place for a variety of reasons. Accurate, timely records relating to fixed assets are required for your balance sheet to offer a precise reflection of your company’s finances, and are also helpful in terms of inventory tracking, depreciation and theft prevention.
Identifying the assets that need to be managed is the initial step of setting up a fixed asset management process. The concept of this sounds deceptively simple until you consider all the items belonging to your business that fall under the fixed asset umbrella – i.e. assets owned by your company that cannot quickly be converted to cash. Consider the telephones and desks in your office, the machinery and carts in your factory, the ovens, fridges, tables and chairs in your restaurant. Additionally, think of the buildings these assets are housed in. All of these are categorized as fixed assets and must be inventoried, tracked and depreciated accordingly.
If you’re starting a new business, an easy way to ensure that you don’t fall behind is to enter new fixed assets into your asset tracking software as soon as they are acquired by the company. Keeping tabs on all of the items your company owns can reduce the amount of time and money involved in locating and replacing items, and also mitigates unnecessary replacement. Lax fixed asset programs can also contribute to a rise in fraudulent behavior.
Fixed asset accounting software can help companies implement an efficient tracking system. Using a software asset management tool reduces paperwork in addition to decreasing the time it takes to compile and update records. Companies with large numbers of assets may find it more cost- and time-effective to leverage inventory bar code scanners that work directly with computer-based inventory programs, eliminating the need to manually enter data.