Reconciling Fixed Asset Financial Records

Reconciling fixed asset financial records can be a daunting task. Multiple record sources are involved including; payables, purchase orders, registers, and the general ledger. A significant hurdle is that more than one person is usually involved. Consequently, record keeping habits vary and the opportunity to introduce errors through redundant data entry is high.

Some of the more common problems that occur are;

  1. Fixed assets are typically added to financial records during payable activities. A fixed asset register is used to record the addition of newly capitalized fixed assets. All assets may not be added to the register, or may be added as a single bundled entry. Thus, lacking sufficient detail to isolate one distinct asset from another.
  2. Asset detail is recorded into a fixed asset register, while accumulated balances are recorded into the general ledger. In many instances, the (fixed asset) balances are already in the general ledger (as a result of payables management transactions) during the initial setup of the fixed asset record in a register. We frequently find that the balances in the general ledger do not support the entries in the fixed asset register for a number of reasons:
    • During purchase order processing, not all fixed assets are recorded in the register.
    • Assets in the register may be linked to incorrect general ledger accounts.
    • Assets may have been deleted from the fixed asset register yet a general entry was not made in the general ledger to back out related values
  3. More often than not, information needed to link a logical record to a physical asset is lacking. Additionally, efforts to align digital information to documents such as purchase orders, invoices and packing slips is time-consuming and often lacks meaningful methods for alignment.

SOLUTION

Verasset offers turn-key solutions designed to reconcile fixed assets and sustain accurate and reliable results going forward.  We begin by analyzing your current records and reorganizing records into classifications in order to ease reconciliation tasks. Next, we conduct a full physical inventory, while matching installed assets to logical records. In the event that we uncover assets that are not reported on the general ledger, we will appraise them and assign values for inclusion into your financial records. Throughout the project, we identify opportunities for improvement and offer recommendations for implementation of best practices. To ease and automate record keeping, Verasset offers a complete line of automatic data capture and asset tracking software and hardware.

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