In order to purchase new assets, a purchase order is created and submitted to a vendor. As the vendor delivers against the purchase order, packing lists and invoices are generated and remitted to the company making the purchase. The packing list is usually affixed to the packaging and shipped with the order. Invoices are normally […]
At a minimum, the following data elements should be accurately recorded and maintained: A unique means to identify each asset, such as a manufacturer Serial Number or an affixed Asset Tag Number Costs- both Purchase and Installed Costs Depreciation– current and accumulated Useful Life Location and/or Custodian of the asset In order to better understand […]
While information can take many forms and be used for many reasons, our focus will be placed on the bare minimum required to track, manage and report on capitalized fixed assets. It is equally important to identify several terms we will use. These include purchase and installed costs, accumulated and current depreciation, useful life and […]
Within this series, we will follow the flow of two practices: Purchasing and Shipping/Receiving, within the typical fixed asset life cycle. The procedural focus will be deliberately narrow. We are using these two stages within the life cycle as they represent control points. By definition, a control point represents an area where audit control is […]
As we begin to look at the fixed asset life cycle, it makes sense to define it. The asset life cycle represents the varying stages that an asset is processed through, from planning a purchase through retirement from service. Along the life cycle, business practices (procedures) are employed. For example, budgeting would one, purchasing would […]
Businesses face many risks every day. One major risk relates to managing and deploying large amounts of money while creating value for shareholders. Business property, equipment and assets represent a significant investment of money. Management of this investment depends partly on getting the right data at the right time and in the right format to […]
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 […]
Over the last decade, we have found that at a minimum 50% of fixed asset information is either inaccurate or incomplete. Therefore, the only reliable way to verify and validate fixed asset information is to conduct a physical inventory. All fixed asset inventory data should be centralized and reconciled against the existing data in the […]
One important means towards maximizing your investment in performing a fixed asset physical inventory is to include expensed items, in addition to capitalized fixed assets, in the counting process. We recommend that the focus is applied toward expensed items with greater operational significance as well as those at a higher risk for theft or misplacement. […]
The objective in tagging items using RFID is two-fold; first, once affixed, using RFID going forward makes future physical inventory counts much faster and easier to complete. When scanning an RFID tag, line of sight is not necessary and multiple tags can be read simultaneously. This significantly speeds up the physical inventory process and requires […]