Risk management plays an important role in business management. Calculating risk encompasses consideration of conducting certain activities (or lack thereof) and involves comparing the risk to the money either spent by doing, or not doing the activity.
Taking a physical inventory and reconciling the results is an integral portion of managing risk.
Consequently, how do organizations decide what to inventory, how often to do so, and by what means?
Clearly, the potential financial loss related to the performing, or not performing the activity should not exceed the dollars saved. Consider for example, attempting to account for 90% or greater of all assets. There are costs associated with accounting for such a large percentage.
Decisions should be made that factor in the value of accounting for assets as a return on investment, using factors such as remaining useful life and its remaining value.
For example, how much time and money should be expended to account for assets that have reached the end of their useful life and have no remaining book value? Regarding additions, the cost to appraise must be considered against the book value of the assets being valued.
Control thresholds take factors like this into consideration and then reduce the number of trackable assets accordingly. Other factors, such as time required by employees to unlock doors and cabinets, serve as escort and aid in locating assets must also be factored in.
Verasset has amassed significant experience accounting for assets for diverse organizations of all sizes. As a result, this experience uniquely enables Verasset to optimize projects like this in terms of effort, time, and cost while producing the best possible results.