FIXED ASSET MANAGEMENT SERVICES
Fixed Asset management is still one of the most important concerns for businesses all around the world. Why? Businesses are propelled by their assets. To stay afloat, modern enterprises rely significantly on tangible assets. The asset management method also aids organizations in maximizing the value of their assets and achieving their objectives.
Fixed asset management is an accounting procedure that aims to keep track of fixed assets for financial accounting, preventive maintenance, and theft prevention. It also entails assessing the status of equipment, computers, vehicles, and other physical assets, as well as tracking, organizing, monitoring, and maintaining them in excellent working order. They can reduce lost inventory, equipment problems, and downtime while also increasing the asset’s lifetime value.
Fixed asset management is a secretarial procedure for tracking fixed assets for purposes of value, financial accounting, preventative maintenance, and theft prevention.
Tracking the location, number, condition, maintenance, depreciation status, and valuation of tangible assets can be difficult for businesses. Serial numbered asset tags, which are essentially branded with bar codes for quick and accurate reading, are a standard technique to monitoring these permanent assets. The asset owner can then use a bar code scanner to take inventory and generate a statement.
Some tracking methods, such as employing fixed scanners to read bar codes or attaching a radio-frequency identification (RFID) tag or label to an object, automate the process.
DEFINITION OF TERMS
Fixed assets are long-term tangible assets or property/ equipment that a company owns and utilized in a business’s operations to produce revenue. They are classed as property, plant, and equipment (PP&E) on the balance sheet because they provide long-term financial advantages and have a useful life of more than one year. They are also referred to an assets that businesses employ to generate revenue
The term “fixed assets” refers to tangible assets that a company expects to keep for more than a year. Intangible assets that a company expects to keep for longer than a year are known as non-current assets. A company’s current assets are those that it expects to keep for at least a year.
Fixed Assets Management
The practice of tracking and managing an organization’s physical assets and equipment is known as fixed asset management. Vehicles, computers, furniture, and machinery are examples of asset types.
It is used to:
- Keep track and monitor fixed assets.
- Make purchasing decisions
- Organize maintenance schedules
- Manage inventory
- Enhance operational effectiveness
- Maintain a list of assets that have been retired, sold, stolen, or otherwise lost.
Organizations can use fixed asset management to keep track of their equipment and vehicles, analyze their status, and maintain them in excellent operating order. They can reduce lost inventory, equipment problems, and downtime while also increasing the asset’s lifetime value.
Fixed and current assets are two categories of assets that are particularly important in asset management. All businesses or corporate bodies can benefit from these assets. Some businesses have been found to thrive without the use of cash or intangible assets. Without fixed or current assets, fictional assets, and fictitious assets
Asset management is the process of planning and regulating the cost-effective acquisition, development, operation, maintenance, renewal, and disposal of organizational assets. This procedure increases the asset’s delivery potential while lowering costs and hazards.
Individuals or businesses that manage assets on behalf of individuals or other entities are referred to as asset managers in finance.
It’s also known as a systematic approach to the governance and realization of value from the objects that a group or entity is in charge of, over the course of their whole life cycles. It can apply to both tangible and intangible assets (physical objects such as buildings or equipment) and (such as human capital, intellectual property, goodwill or financial assets).
Asset management, when used correctly, aids stakeholders, decision-makers, and staff in predicting and monitoring an asset’s life cycle. It entails, for example:
- Managing assets
- Making purchasing decisions
- Establishing maintenance plans
- Scanning goods on a regular basis
- Gathering and controlling data created by the aforementioned operations
- Managing inventory
What is fixed asset register (FAR)?
A fixed asset register (FAR) is a list of the company’s fixed assets. It includes information on the asset’s description, quantity, cost, date of purchase, vendor, identification label code/fixed asset number, owner department, location, estimated useful life, fixed asset depreciation, and asset serial number – as well as the asset’s estimated scrap value at the end of its life span. Depending on the nature of the assets and business demands, a FAR can be kept in a variety of formats.
What can FAR do to assist?
It provides specialized services in the following areas:
- Verification of fixed assets on a physical level
- Asset identification code design and generation
- Fixated asset tagging
- Create a new register or update an existing one.
And here’s how it’s done:
- As a one-time challenge
- On a regular basis, such as once a year, for all fixed assets
- Covering varied assets on a regular basis so that all assets are covered for a longer length of time.
Our strategy is as follows:
- Meeting with management to learn about the company’s operations, assets, and locations.
- Conduct a physical inventory of all assets across all sites.
- Inspect and count all fixed assets physically.
- Keep track of any assets that move during the count.
- Create an asset identification code for each type of asset.
- Assign an asset code to each tallied item.
- Create and apply asset tags.
To create an accurate and up-to-date FAR, we did the following:
- Keep track of the number of items, asset codes, locations, and departments.
- Examine invoices, contracts, and accounting documents to find out when the item was purchased, how much it cost, and who the vendor was.
- Calculate depreciation rates by estimating asset usable life, scrap value, and depreciation rates.
- Value all assets, including cost and depreciation, and reconcile with bookkeeping values.
- Keep track of any additional asset information that has been requested.
Fixed Asset Management Services
Fixed asset management is handled by a skilled staff of fixed asset accountants who ensure that the inventory lifecycle is tracked from beginning to end. Services for fixed asset management include:
- Asset Tagging
Generating and uploading a comprehensive Fixed Asset Register (FAR) to track the lifecycle. This allows you to keep track of a specific item while it is moved, transferred, repaired, or disposed of. Asset tagging is DOA-compliant, and POD is captured by issuing a traceable waybill. And also offer a detailed single-click report for auditing and tracking an asset’s lifecycle.
- Tracking of Asset Movement
Asset tracking is the process of tracking the location of physical assets, mainly equipment, using barcode scanning labels, RFID, or GPS tags.
Administrators of organizations that use asset monitoring appreciate the opportunity to regulate inventory movement and acquire insight into its whereabouts. Knowing that staff may access their inventory quantities and locations by simply entering a sequence of numbers into a system gives them peace of mind. Access to an asset’s location also allows time for future mistakes to be corrected. Employees can immediately see where and how an item went missing by tracking the number, and work to avoid the same mistake in the next batch of inventory.
- Physical Inventory verification.
The process of verifying an entity’s financial records to ensure that everything is represented fairly and accurately is known as an inventory verification audit. To put it another way, this audit entails cross-checking and confirming stock and inventory.
This entails identifying all of the organization’s assets, taking into account their location, number, quality, and year of acquisition, as well as codifying and computerized indexing of assets.
- Reconciliation of Assets
It is essential for a company to keep accurate records of fixed assets since it allows them to make informed business decisions and avoid being overvalued.
Reconciling physical fixed assets with existing asset registers allows us to determine what is physically on the ground that is not missing from the asset register, as well as what is in the asset register but not physically found on the ground, and to create a consolidated fixed assets register for your organization to ensure proper planning by management.
- Auditing of Fixed Assets
Checking if collected entries are accurate and in agreement by calling up reports with summarized data on fixed asset management. Quarterly evaluations will be carried out using a comparative analysis to identify disparities and consequences.
A Fixed Asset Audit entails counting all fixed assets as well as determining their monetary value. It entails creating, keeping, and updating purchase records that include the date of purchase, receipts, serial numbers of equipment, depreciating value, and other pertinent information.
Fixed Asset Management Procedure
- Gathering Requirements: We visit with the client and gather information about their business needs by asking specific questions and gathering responses.
- Planning for Service Requirements: We will suggest a detailed plan based on the client’s data and insights, and we will share the work strategy with them for approval.
- Asset Management for Fixed Assets: We shall carry out the fixed asset management services as planned once the client accepts our proposal.
- Workflow Analysis: Our team will evaluate the completed model to confirm that our method complies with the DOA.
- Reporting: To assist the client in understanding all aspects of the fixed asset management services, we shall submit reports.
Principles of Asset Management
Asset management is based on seven principles.
- The Value Added/Level of Service Principle: assets exist to deliver services and things that are appreciated by the customer-stakeholder; there is a minimum level of service below which a given service is not viewed as adding value for each consumer-stakeholder.
- The Life Cycle Principle: all assets have a discernible life cycle, which can be understood to help with proper management.
- The Failure Principle: all assets are broken down by usage and the operating environment; failure happens when an asset cannot do what the user requires in its operating environment.
- The Principle of Failure Modes: not all assets breakdown in just the same way.
- The Probability Principle: Assets of the same age do not all fail at the same time.
- The Principle of Consequences: not every fails have the very same ramifications.
- The Total Cost of Ownership Principle: given a target level of service and a defined level of risk, there exists a minimum optimal investment over the life cycle of an asset that optimally balances performance and cost.
Asset Management Services Set-up
Setting up an asset management system entails the following steps:
- Compiling data on various asset management systems
- Observing asset movement and needs in order to determine which asset management system is optimal.
- Selecting the most appropriate asset management software
- Asset organization and labelling for inventory
- Using QR codes to identify assets
- Scanning tags to get into the system. Using scans to track assets
- Keeping track of the system and checking in with staff and decision-makers on a regular basis
- Analyzing the information provided by the tracking
- Performing maintenance in accordance with preventative maintenance guidelines as well as emergency requirements
- Predicting asset life cycles
- At the end of its life cycle, dispose of, donate, recycle, or sell the asset.
QR codes play a crucial role in asset management. They allow for quick tracking through intuitive smartphone apps, which is a significant advance over inaccuracy and clumsiness in spreadsheets or manual records.
QR codes as part of an asset management system do not require any new hardware, are simple to learn, and enable for quick, easy, and complete data upload over system wide informational shifts.
Types of Asset Management
It’s critical to choose the type of asset management that best meets your company’s demands in order to manage your assets as efficiently as possible. A corporation with mostly in-house goods that doesn’t leave the premises, for example, is unlikely to need an asset management system with tracking system.
For a multinational firm, however, knowing where an item is in the supply chain has numerous advantages. Understanding the various types of asset management is crucial to selecting a solution that will work for you. Here are some examples of different types and what they entail.
- Digital Assets Management (DAM)
Digital asset management is a field that is rapidly evolving. It entails the effective arrangement, processing, and storage of digital material and content.
Stakeholders can save the cost of maintaining numerous copies of assets like intellectual property rights, building plans, and meeting records by regulating access to them.
They can also rest easy knowing that they are better protected against natural disasters, fire, and water damage.
Having a good digital asset management system helps you to do things like:
- Digital objects and information are distributed instantly.
- Access to digital assets is subject to accountability.
- Possibilities for repurposing digital assets
- Without specific expertise, you can search for digital goods quickly and easily.
- Brand consistency that works
- Information on which clients access digital items—who, what, and when they do so, as well as how long they do so—is extremely useful in formulating marketing plans.
Digital asset management can benefit even businesses that do not sell digital products. It is now standard practice to keep files, timecards, instruction manuals, and operating instructions in an easy-to-use system with as-needed access.
- Asset Management for Fixed Assets
Even if a corporation is solely focused on the supply chain, fixed asset management should be taken into account.
Fixed assets are all items that a company uses to create revenue and which, in most cases, stay in the place in which they were installed. Plumbing installations, appliances, and in-place machinery are examples of fixed assets. “Property, plant, and equipment,” or PP&E, is another term for these items. They are usually large investments that will service the organization for several years and will depreciate over time.
Such assets, however, still necessitate tracking. They require routine maintenance, generate data for research, and may necessitate 24/7 monitoring.
All of this and more is possible with fixed asset management. A corporation can gain the following benefits by adding fixed assets to an asset management system or implementing one that is purely focused on PP&E:
- Data on who used the asset when and how, as well as what actions they took 2. Lower maintenance expenses
- Data streams in real time from stationary assets in diverse places
- Preventive maintenance that is scheduled ahead of time
- A list of assets that have been decommissioned, lost, stolen, or recycled.
Expanding one’s thinking to include fixed assets as a source of profit is a smart strategy that may easily become part of a company’s culture over time.
- IT Asset Management (ITAM)
Both hardware and software are managed as part of IT asset management.
It comprises tangible assets such as software subscriptions (SaaS), licenses, patents, and network infrastructure, as well as company-owned hardware such as PCs, routers, and similar IT equipment.
IT asset management aids in the provision of security, the saving of time and money, and the establishment of a strong technological foundation for the future. It entails an online and in-house system for storing, accessing, organizing, and sharing information.
Digital files are saved on hard drives and backed up in the cloud, and assets can be tracked and updated quickly. A straightforward search and storing method saves time. Messaging and video sessions are handled in a secure manner.
Viruses are removed, duplicate files are detected and erased, and changes are done instantaneously across all platforms. IT management is beneficial regardless of the type of company or service provider being discussed, because every modern organization requires some form of immediate communication and file sharing.
- Asset Management in the Enterprise
Enterprise asset management is a rapidly expanding field. Throughout the lifecycle of every physical asset or infrastructure that a corporation possesses, it organizes, integrates, and optimizes it. Documentation, productivity, inventory records, and facility condition are all part of this.
EAM stands for enterprise asset management. EAM differs from the other asset management methods covered here in that it takes a holistic approach to organizing and tracking assets.
When looking for an enterprise asset management system, make sure it covers the following features:
- The ability to create accurate and customized reports
- Calculation and email production in real time
- Visualization of data
- Formulas, charts, and productivity targets that are customized
Warranty and regulation compliance, as well as work orders and follow-up communications, may all be organized with EAM software.
- Financial Assets Managing
The term “financial asset management” refers to a more traditional approach to asset management. It includes investments, real estate holdings, brokerage services, and all of an organization’s intangible assets.
Asset management includes keeping track of market rates, tax obligations, and other financial liabilities, such as debts, as well as calculating interest. Financial asset management aims to increase revenues while minimizing risk throughout time.
- Asset Management for Infrastructure
Cities, like every other form of development, rely on infrastructure to function. It covers public transit, roads, water access, power, and civil engineering, among other things.
The term “infrastructure asset management” refers to the tactics for maintaining, modernizing, and maybe deleting these critical utilities. Infrastructure asset management frequently focuses on an item’s end of life cycle and the most efficient, cost-effective, safest, and environmentally responsible ways to replace it.
In order to function effectively, many organizations must collaborate with civil and national governing bodies. Understanding infrastructure asset management is thus a critical component of effectively managing one’s own assets and capabilities.
Importance of Asset Management
Asset management may be a priority for organizations for a variety of reasons, including:
- Makes it possible for a company to account for all of its assets.
Businesses can easily keep track of their assets, whether they are liquid or fixed, using this method. Business owners will be able to see where their assets are, how they are used, and whether or not they have been modified. As a result, asset recovery can be completed faster, resulting in higher income.
- Assists in ensuring that amortization rates are accurate.
The asset management method ensures that the financial statements appropriately reflect the assets because they are checked on a regular basis.
- Assists in the identification and management of risks
Asset management is the process of identifying and managing risks associated with the use and ownership of specific assets. It suggests that a business will always be ready to deal with any possible threat.
- Eliminates phantom assets from the inventory of the company
There have been instances where assets that have been lost, destroyed, or stolen have been incorrectly documented on the books. Any assets lost as a result of a strategic asset management strategy will be reported to the firm’s owners, and they will be deleted from the books.
Creating a Plan for Strategic Asset Management
Asset ownership is a part of any business, whether public or private. A firm owner must design a strategic plan in order to properly manage the assets.
- Take inventory of your assets.
An owner must inventory all of his assets first. He won’t be able to manage his inventory properly if he doesn’t know how many assets he has. The following items should be included in an inventory of corporate assets:
- The total number of assets
- Where are the assets located?
- The worth of every asset
- When were the assets purchased?
- The assets’ anticipated life periods
- Calculate the total cost of ownership.
If a business owner wants to be sure that his asset management strategy is right, he should look at the overall life-cycle costs of each asset. Many business owners make the error of focusing just on the purchase price. Additional costs, such as maintenance, condition and performance modeling, and disposal costs, are expected to arise during the asset’s life cycle.
- Establish service levels
After estimating life-cycle expenses, the next step is to determine service levels. . Simply said, it entails assessing the overall quality, capacity, and functionality of the assets’ various services. The owner of a company can then determine the necessary operational, maintenance, and renewal operations to keep the assets in excellent working order.
- Make long-term financial planning a priority.
In theory, a company’s asset management strategy should easily translate into long-term financial planning. The business owner can assess which goals are realistic and which should be prioritized with a good financial strategy in place.
Advantages of Asset Management’s
There are numerous advantages to implementing an asset management plan, including:
- Improving the gathering and use of information
A business owner can improve their approach for acquiring and using assets by keeping track of them throughout their entire cycle. When putting such a strategy in place, the company uncovered wasteful purchasing practices, which it remedied by building a better method for obtaining the equipment that workers require.
- Improving adherence
Government agencies, non-profit organizations, and corporations are required to submit detailed reports on how they acquire, use, and dispose of assets. A majority of them keep track of their assets in a central database to make reporting easier. As a result, when it comes time to produce the reports at the end of the fiscal year, they will have easy access to all of the information they require.
Coordinator of Asset Management
The Asset Management Coordinator is in charge of arranging asset audits and physical inventories with the asset management provider, as well as keeping track of capital asset purchases, transfers, and disposals.
Inventoriable Assets Tagging and Identification
- Tag for a Reason
To determine which inventoriable assets belong to the company.
- What Should You Tag?
All furniture and equipment with value must be branded, including but not limited to:
- Computers and Laptops
- Other equipment, such as kitchen appliances, health and fitness equipment, or office devices
- Medical Equipment
Increase in Fixed Assets
When bringing a new asset into the organization, the first step is to decide if the asset should obtain a property tag in order to maintain accurate asset records.
Controlled objects such as overhead projectors, printers, televisions, DVD players, video cameras, digital cameras, fax machines, PCs, monitors, laptop computers, tablets, and other electronic devices and anything that could be easily stolen should all be barcoded regardless of their worth.
After an asset has been labeled, it must be documented. The Fixed Assets Maintenance Form is used to record all necessary modifications.
Fill out the following columns when you receive a new asset:
- Code: Look for codes at the bottom of the form. For new assets, the code “A” is used.
- Barcode Number: Enter the number that appears at the bottom of the barcode label that was applied to the object.
- Purchase Order Number and/or Cost: Enter the asset’s cost and/or the number of the purchase order that was used to purchase the asset. To add an asset to the system, we need a cost and/or a PO#. This allows me to evaluate the asset’s value and my assistance in determining the source of money by account number.
- Room Number: This is the room in which the asset is principally located.
- Asset Description: A brief summary of the asset.
- Make/Model: Include the name of the manufacturer as well as the model number.
- Serial #: Use the serial number provided by the manufacturer.
The Fixed Asset Maintenance Form must be filled out completely and sent to Business and Finance.
Asset transfers must be recorded immediately in order to maintain correct asset records. A permanent transfer is one for which there are no immediate plans to return. A fixed asset maintenance form will be completed by the administrator transferring the equipment. On the form, the following information is requested:
- Codes can be found at the bottom of the form. When an asset is transferred, the code “T” is used.
- Fixed Asset QR Number: The building administrator must record the Fixed Asset number, which can be located on the barcode affixed to the asset or obtained by contacting the asset’s manufacturer. From the Fixed Asset listing, to ensure that the relevant item is identified. The correct asset number can be found in the Fixed Asset listing.
- A detailed description of the item, including the brand, model, and so forth. The terms “DVD player” and “Laptop Computer” are insufficient to accurately describe the characteristic.
- Determine the item’s final destination.
Send a copy of the form to Business and Finance as well as the administrator of the receiving building.
Taking a Physical Inventory
All inventoriable assets shall be subjected to a physical inventory once a year.
If you would love to engage us for this service, please call us on 08023200801 or request us to send you a proposal by email to firstname.lastname@example.org or complete our customer enquiry form for more details.