Fixed Asset Inventory Management and Tracking Basics

Fixed Asset Inventory Management and Tracking Basics

With the start of a new year comes new initiatives. Priorities are set and budgets are established. Has fixed asset management surfaced as a priority for 2020? If this is something you have not dedicated any time or resources to in the last few years, chances are, it is (or should be).

This is a topic we have addressed several times before. In this 5 part series, we will highlight at some of the basic aspects in developing a successful fixed asset management program. Consider this be to be the 2020 updated primer.

Part One: Baseline Physical Inventory

We can’t talk about developing a fixed asset management program without first establishing an accurate, up-to-date fixed asset inventory database. We need a clean, updated listing of assets to function as the core of the asset management program. This is done through conducting a wall-to-wall physical inventory of fixed assets.

Prior to conducting physical inventory, you must first define what you will track/manage (and therefore need to inventory). This is how we start each of our physical inventory engagements. The criteria vary greatly from one organization to the next. We often find that cost/value (capital vs. expensed), mobility/portability, likelihood for theft, and data storage capability (especially assets containing sensitive data) are of high priority.

With a clear definition of asset types/categories in your scope of work, there are some additional details to consider prior to starting the inventory. Whether you are conducting physical inventory internally or hire a professional inventory service provider, you will need to consider the following;

  • Data Collection Elements – what information will you need to record for each asset (if you hire out for this your service provider should make recommendations). Basic location information, asset specification information such as serial and model number, and digital images are pretty standard minimum requirements.
  • Locations – identify all locations and areas where your fixed assets are located. Remember to consider offsite storage and remote workers (these are frequently overlooked).
  • Scheduling – will this be done during business hours or after hours and on weekends. Also consider how long you will be at each location and the impact on each department.
  • Technology and Automation –how will inventory data be recorded and managed? Will assets be asset tagged during inventory (hint: if they are not already, they should!). More on this in Part Two.
  • Communication – ensure that everyone in the organization is not only aware of the baseline inventory initiative, but that they are aware of the importance/significance. Ensuring that all hands are aware and on board with the process can have a significant impact on the success of the project.
  • Quality Control – what measures will be taken to ensure accuracy and accountability. This is another area that a professional service provider can help with.
  • Accessibility – how will offsite/unavailable and inaccessible assets be handled (think remote workers, mobile/portable assets, and busy asset owners).
  • Reporting and Data Formatting – make sure the information you are recording is useful to you and can easily upload into your asset tracking application

With a concrete plan in place, you are ready to conduct the baseline physical inventory of your fixed assets.

Check back soon for Part Two where we will talk about Automation and Technology.