Organisations may possess fixed assets such as plant and machinery, furniture and fixture, buildings, heavy equipment and vehicles. The management of these fixed assets is of supreme importance from the perspective of financial accounting and asset maintenance. The task of asset management becomes complex and needs to be defined better if the organisation has its presence at multiple locations. Whether the assets are managed manually through paper work or online with aid of asset management programs, the importance of managing fixed assets efficiently is of paramount importance for every Organisation.
Snapshot of assets possessed
Fixed assets owned by any organisation are a part of the balance sheet and hence are of extreme significance to the financial standing. Organisation which has its presence across geographies need current valuations of all their assets to ascertain an important disclosure in their financials. Effective fixed asset management, helps in ensuring that assets possessed are properly valued, amortisations are correct and thus ensures accurate valuations of fixed assets. Hence, fixed asset management holds an important role to play.
Adherence to standards
Organisations with presence in multiple locations are generally of a significant scale. It is because of the size and turnover that they have to abide by a defined set of compliances and audits. Adherence to norms require implementation of standardised procedures to track the where, when and what of fixed assets. For example- ISO standards would require set norms for procuring, maintenance, applying depreciation and scrapping of assets present in different locations of the same organisation. Audits would check proper tracking, tagging or coding of all assets. Further consistency in asset codes allocated to assets of the same category present in different locations of the same organisation would be checked. Any variances from pre-established norms and rules would be considered as reservations at the time of audits.
Optimising usage and minimising wastage
An organisation may possess a number of assets which may not have optimised usage at one location whereas some other location may be evaluating the procurement of the same asset. Efficient fixed asset management will enable a thorough check at other locations before procurement of a new asset at some other location. For example: Printer present at Kolkata may not be optimally used because the count of print out requirement is low. However, at the time of procurement of a high capacity printer in a location like Mumbai, the possibility of moving the printer at Kolkata to Mumbai may be evaluated. This would not only serve as a cost saving tool for the organisation but also help in ensuing all fixed assets under its management are optimally utilised.
Taking stock of fixed assets and identifying ghost assets
Fixed assets management is a tool for getting an insight to the company’s assets at different locations in a snapshot. It would also enable the organisation to understand which of the assets are obsolete and need to be written off and further replaced. Ghost assets refer to assets which are stolen, missing or unusable for the organisations perspective.
Proper asset management would enable working out a fixed plan for maintaining assets at different locations. That is to say Air conditioners present in all offices across locations would be serviced at the same times of the year. This would help in ensuring that assets of the same category present across locations is being maintained similarly.
Assessing quality of asset handling and taking action accordingly
An organisation applies the same rules with regard to depreciation and asset replacement across its locations. However, this would also enable the organisation to check which locations are not ensuring proper upkeep of their assets.
Outsourcing fixed asset management to external partners can be beneficial for organizations. It helps to yield substantial savings in the organisations’ tax, insurance premiums, easy tracking of fixed asset, in addition to making it more manageable and accurate. If you wish to streamline your physical assets with your fixed asset register, then we’re just a call away. With pan India presence, we provide a one stop solution for your fixed asset management needs.