Asset inventory management refers to the process of monitoring and accounting for the location of previously acquired goods in a company. These goods are usually valuable and necessary for the daily operations of the company. They include things like office equipment, technological devices, mobile tools, and even personnel.
Before you begin the asset inventory process, it’s the best practice to ensure that you have all the necessary software, hardware components, and expert help that will enable you to make the process a success. Key elements for asset inventory includes organization-wide participation, individual asset tagging, integration with your accounting system, maintenance, and automated data collection.
Preparation and Planning
The preparation stage involves installing and setting up any new software and hardware components that you’ll need for asset tracking and management. You’ll also need to review and examine all of your current asset inventory data to check for data inconsistency and completeness. This will enable you to get a sense for the current state of your assets and also to define the scope of your physical inventory work.
Conduct Physical Asset Inventory
Identify target asset to be inventoried. During this process, relevant asset data is collected and missing information such as tag number, serial number, location, custodian and more is entered. Next, affix custom barcode labels to these assets. Since a barcode is simply scanned, the person conducting the inventory can provide accurate results even without having an extensive knowledge of the product being inventoried.
Analyze and Examine Results
In this last step, analyze the result of the physical inventory to ensure that it is consistent with your assets records. As part of the analysis process, exceptions will be identified, omissions will be identified as well as any ghost assets. It’s the best practice to match, scan, and attach invoices to your asset records.
The importance of asset inventory management in today’s current regulatory and highly competitive business environment cannot be overstated.
Unfortunately, asset inventory management is still one of the weakest areas of internal control in many organizations, resulting in high cost of ownership, overpayment of taxes and insurance, and risk of non-compliance with regulatory mandates.
On the bright side, these are problems that automation can solve. Automation ensures a closer scrutiny of return on investment, a full disclosure of financial asset information, and a more efficient asset inventory management process. According to industry analysts and experts, an efficient asset inventory can significantly reduce a company’s operational, procurement, and disposal costs.
Performing assets inventory manually can prove to be a time consuming and tedious task, regardless of your company’s size. Not only does manual entry consume company time and resources, but it also requires a significant percentage of your workforce.
An asset inventory automation system allows you to store all your assets information on the system’s database, which means you can locate any information regarding your assets in seconds. This will save you a lot of time and effort.
As discussed, manually managing your assets inventory processes is time intensive and depends entirely on your workforce. These things cost a lot of money which adds up over a period of time.
We’ve already established that assets inventory automation saves your company valuable time. By saving time on the inventory processes, an inventory automation system can reduce costs too since time is money.
With a manual system of inventory management, there’s a high chance for data to be entered incorrectly or information getting misplaced. Accidentally adding an extra “0” to an asset’s identification number can result in serious tracking issues, loss of valuable time and effort while trying to locate and rectify the mistake.
An automation system reduces the risk of human error and streamlines the entire assets inventory and management process, thus increasing accuracy.
Automating assets inventory and management deters theft and misuse of fixed assets. An automation assets inventory system secures your assets by ensuring that the process for requesting an asset to be moved from one location to another must pass through an approval process.
This way, the assets management team will not only know the location and ownership of assets at any given time but also be able to keep track of their working condition and maintenance needs, which will ultimately improve accountability.
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