intro:
In the world of accounting, the savings potential of improved fixed asset management is often overlooked.
It’s difficult to find the time and tools to devote the attention to fixed assets that they deserve. Yet assets like land, buildings, transportation, and manufacturing equipment, represent the largest investments most companies make. Sound fixed asset management can yield substantial tax savings in depreciation deductions.
Conversely, sub-optimal fixed asset practices can threaten the accuracy of financial reports and negatively impact your bottom line body :
There is nothing more critical to effective management of fixed assets than beginning with an accurate fixed asset inventory. Without it, no amount of added processes, controls, or correct calculations can ensure the accuracy of fixed asset accounting. The only reliable way to verify and validate the fixed asset information is to conduct a physical inventory.
Eliminate “ghost” assets: A “ghost” asset is property that is lost, stolen, or unusable, but is still listed as an active fixed asset in the system.If 10-30 percent of fixed assets on the books are ghost assets, a company might be overpaying taxes and insurance on those assets by up to 30 percent. Ghost assets that are not identified can cause lost productivity because missing or unusable assets are not available when needed.
Tag assets appropriately: When a company owns multiple fixed assets that are nearly identical, it can be very easy to make mistakes by creating duplicate asset records or failing to dispose of the correct asset when identical assets are retired. The easiest solution is to tag each asset with a unique identifier in the form of bar code labels, speeding up the inventory process through the use of handheld technology that can scan and record each bar code in seconds. best asset inventory software: Inventory