Fixed Asset Management Policies and Procedures

Fixed Asset Management Policies and Procedures

Part 3: Fixed Asset Management Policies and Procedures

In parts 1 and 2, we discussed conducting the baseline physical inventory and addressed automatic data capture technologies.

In this post, we discuss putting it all together with Fixed Asset Management Policies and Procedures. Policies and procedures essentially encompass all aspects of the asset tracking and management program, including physical inventory, technology, and more.

We find that many of our clients come to us with a specific need or problem, such as reconciliation of their fixed asset register, and they ultimately determine while this will resolve their immediate requirement, without implementing some fundamental changes to their asset management program, they will likely end up in the same position and with the same problem in a years’ time.

Getting a baseline physical inventory and tagging your assets is a great start. Reconciling the fixed asset register keeps you compliant with regulatory requirements. But if you don’t make some changes in the way you are managing your assets on an ongoing basis, these snapshots in time will eventually become outdated and you will wind up right back where you are. This isn’t to say that there won’t be a need for physical inventory and reconciliation next year, but it will likely be a much cleaner, simpler, and more cost-effective process.

To establish a useful set of policies and procedures, you must first look closely at how things are currently done.

There are a number of diverse roles that have a direct impact on how an asset is managed and tracked throughout its useful lifecycle. While there is no one size fits all process for management of assets, there are common trends and typical process flows amongst most organizations.

DISCOVERY

The process should begin with an asset lifecycle assessment/discovery phase. The assessment should look at all of the processes that impact fixed assets across their useful lifecycle.

Here are some high-level steps that we take with our clients;

Stakeholders and gatekeepers are identified. This will vary from one organization to the next depending on the internal resources available.

Conduct a review existing checks and balances you have in place. There are likely gaps in this area.

Identify sources of information. Leverage all available databases and data sources, including; ERP systems, IT/Help Desk, CMMS, facilities, and financial records.

Measure timelines and quality of information.

Review technologies that are currently in use. There is usually room for improvement here.

CONTROL POINTS

Once discovery is completed, establish control and integration points.

Clarify control points and roles

Define standards and conventions

Refine information flows. Integration and automation of data flow between systems and departments can reduce redundancies and help keep disparate systems up-to-date.

Establish and deploy relevant automatic data capture technologies.

Establish reliable monitoring of the program.

PLOT MATURITY PATH

Plot your current position into a model. Are you in a proactive or a reactive state?

Plot your future position with desired milestones and timelines. Where do you want to be and how long will it take you to get there?

Compile established process adjustments and associated schedules.

Prioritize implementation stages and IMPLEMENT.

DOCUMENT

When the review and assessment has been completed, you have established the various roles, technologies, processes, and timeline, create a formal Policies and Procedures document to ensure alignment of the program. Be sure to include;

  • Approach and findings of the assessment
  • Identify established standards and conventions
  • Refined process flow at control points
  • Information sources, dependencies, and key points of integration
  • Internal controls
  • Roles and responsibilities
  • Schedules

Contact us to learn more about developing best practice Asset Management Policies and Procedures in your organization.