Asset tracking has a variety of business uses and can bing benefits to corporations of all sizes. Obviously, the immediate advantage of these tools is to track the use of corporate assets, recording the location, age, condition, value and other details of a wide range of fixed assets. That exercise in itself can generate impressive costs savings, as a company’s fixed assets can be substantially greater (both in physical and financial terms) than you might think. Capital equipment like furniture, computers and other office systems can sit there, unknown, swallowing dollars. Asset tracking can be invaluable in maximising asset utilisation, eliminating unnecessary purchases of new equipment and ensuring proper tax accountability and depreciation.
Historically, the use of inventory depreciation software has been associated with large enterprises like the big auto-makers such as GM, Ford and Chrysler who were “early adopters”. They initially sought solely to track their own capital assets, but later started applying asset tracking to the role of tracking vehicle parts from various suppliers for quality control and maintenance-related purposes. More small and medium-sized US businesses have been attracted by the business benefits of asset tracking technologies to save cash in the current climate. Technology helps too. Simple hand-held barcode scanners or RFID readers can collect information from each asset saving considerable time, effort and money compared with doing it manually.
Relatively inexpensive, automated fixed assets accounting tools have speeded up adoption by a variety of businesses. The universality of PC technologies, mobile computers, wireless technologies and handheld devices have resulted in the provision of asset tracking tools more mobile and easy to use. Asset management tools can help US companies of all sizes keep a lid on capital costs at a time when the economic environment requires them to be conservative with their expenditure and squeeze as much ROI out of every penny spent as possible..
Sarbanes- Oxley is certainly all-pervasive in US business and the ongoing implications of SOX when it comes to fixed asset tracking continue to expand. The current focus on the accuracy of the balance sheet and a possible move to further disclosures about the fair value of assets means that US companies will have to get much more serious about tightening up their internal controls over fixed assets in the next few years.
Asset tracking may be a time consuming job and if done thoroughly and professionally, but there are software packages and new technologies available today that will speed the process considerably. Fixed asset accounting packages will quickly and reliably allow you to determine the fair value of assets that you can find and inspect, assuming of course you can indeed find and inspect them! Many commentators consider that “Phantom Assets “or “Zombie Assets” as they’re known will be the next major focus for Sarbanes-Oxley. Ghost Assets” are on the books, but just don’t exist in the real world, while “Zombie Assets” are present physically but have nothing in the accounting records to support the fact that they are indeed there. when a detailed inventory is taken, these “Ghost Assets” can be as much as 15% of a firm’s total Property, Plant and Equipment (PP&E).
In order to be satisfied that your internal controls are working across the board, auditors are bound to focus on PP&E as evidence that you really are fully SARBOX compliant. That will require some investment up front, as entries to the property ledger will need to be readily identifiable, whether through barcode scanning or the alternative of RFID asset tracking. While the initial cost for RFID tags may seem relatively steep compared to manual or barcode systems, the potential cost savings in reconciling physical inventories to the books is substantial and could more than justify the expenditure.
In today’s globalised marketplace, business accounting is complicated by the international relationships that many companies may have in place.f you are a US company with a listing on the US stock exchange, a UK or European subsidiary of a US listed company or a UK or European company listed on the US stock exchange, then you must comply with Sarbanes-Oxley.
With finance departments being held increasingly accountable for their fixed assets software and with the ever-changing requirements of Sarbanes-Oxley, IFRS, GAAP and the Turnbull Guidance, the need for an effective fixed asset tracking system has never been greater amongst commercial and public sector organisations alike.Whether in relation to reporting, security or providing an audit trail, organisations must ensure they remain up-to-date with the current international compliance requirements for their sector. For many accounts departments, fixed asset accounting software is based on the tried and trusted spreadsheet which will handle simple calculations and is a practical tool for management wanting to make “what-if” decisions. continue reading »
With US finance departments and corporate governance being held increasingly accountable under the stringent requirements of Sarbanes-Oxley (Sarbox) and IFRS in particular, the need for an asset tracking system has never been greater for US companies or their overseas operations. Company accountants have to ensure they remain up-to-date with the compliance requirements for their sector and CEOs and CFOs must be in a position to personally certify that the company’s books and records do not contain untrue statements and fairly represent the company’s results or face severe penalties for non-compliance, false declarations and other Sarbox violations.
For that reason alone it’s wise to invest in a fixed asset accounting package. continue reading »