18 Nov 2021 Ankit Chadha

Why Does Your Business Needs an Effective Fixed Asset Management System?

Fixed Asset Management | TRC Corporate Consulting

Fixed Assets are tangible and long-lived assets owned by organizations, for instance, property, plant, machinery, and equipment. These tangible assets are of great value as they are used in the fundamental operations of the business. Thus, it is essential to manage them well.

Fixed Asset Management

Fixed asset management refers to the procedure of maintaining, operating, and selling assets in the most cost-effective manner. It involves keeping track of all the assets owned by the company as they play a critical and vital role in how a business works.

In addition, fixed asset management system offers precise knowledge of what assets are available and which ones can be utilized when the company is in need of returns.  Management of fixed capital is basically maintaining proper, documented records for the assets or the inventory.

Assets define the company’s value, and supports functions of  fund management and investment management. Thus, this is why fixed asset management is crucial for the success and survival of businesses in the market.

The management of fixed assets such as machinery, furniture and fixture, buildings, heavy equipment, and vehicles is of supreme importance from the perspective of financial accounting and asset maintenance. Companies can hire consultancy firms such as TRC corporate consultancies for fixed asset management as it becomes complex and needs to be defined better, especially if the organization has its presence at several locations.

Benefits Of Fixed Asset Management

There are many benefits of leveraging for Fixed  Asset Management process from a reliable consulting firm such as TRC corporate consulting; here are a few major ones that can help you understand better:

It Is More Than Just Counting?

Considering the current market condition, several companies realize how much competitiveness they might lose if they did not upgrade the way they track and handle their fixed assets. Management of fixed capital involves more than just counting pieces of equipment, tangible assets owned by the company, and placing the information into an excel spreadsheet.

Thus, the fixed assets management process includes knowing more in-depth and accurate details about the asset’s worth over the entire lifecycle, which further allows businesses of all sizes to save money invested per asset and initiate efficient fund management. This allows businesses to utilize their asset in the best possible manner. In addition, a fixed asset management system helps the business owners track where the assets are at all times, who has them, and what condition they are in.

  • Fight Competition

Fixed Assets management process can help your business stay ahead of the market. When you have a strong asset management system in place, you can focus all your energy and efforts on the areas where your company has scope to expand, such as marketing, sales, or customer service. This helps your organization to grow, as well as offers a positive vision for the future.

For instance, a business that sets up its inventory for sale should have real-time knowledge of what products they have or when the supplies are running low and need to be reordered or refilled. No business wants to lose its customers to competitors because of getting out of stock. A proper fixed asset management system always prevents this from happening, and that is how you always stay a step ahead of your competition.

  • Enhances The Workflow and Productivity

Fixed asset management and supervising also tend to increase performance and efficiency by decreasing document casualties in the case of a natural disaster, minimizing employee theft, and eradicating the incidence of lost or damaged inventory.

Effective investment management and fixed asset management enables efficient planning within the business, along with the more accountable and reliable staff.

  • Smooth and Easier Compliance

With systematic management of fixed capital, it is easier to monitor as the majority of organizations store their asset information in a centralized folder. As a result, when it is time to arrange the data by the time of the end of the fiscal year, they can have simplified access to all of the information required. 

However, government bodies, non-profit organizations, and businesses must clearly state how they obtain, use, and dispose of assets in a detailed manner.

 

The Procedure of Physical Verification of Assets

  • CFO intimates the unit’s head to start the physical verification of assets on the client’s demand. 
  • Unit head approves the guidelines to the respective departments, such as organizing, accounts and others.
  • The team must begin the filing process for physical verification of assets. In this, any comment by the technical expert must be granted extreme importance.
  • Reconciliation of land agreements can be assigned for the verification of the assets.
  • On finishing the steps mentioned above, all the team members must sign the final sheet, and the Unit Head must give the final approval.
  • A Reconciliation Statement should be created on the basis of the reconciliation process, which consists of the assets that have not been reconciled with the FAR.
  • Moreover, assets defined as obsolete by technical experts must be included in the FAMS reconciliation declaration.
  • After checking with the entity’s Accounts Head, Head of User Department, and Stores Personnel, reasons for deficiencies or surplus amounts must be evaluated.
  • Following that, the document must be examined and signed by Team Members as well as Heads of Departments for Accounts for further approval by the Unit Head and forwarded to the CFO at Head Office.
  • After discussing with the entity’s Executive Director, the CFO may make a decision to approve a write-off of the Physical Verification and Gap Report of Assets.

Why Partner With TRC Corporate Consulting For Fixed Asset Management Services?

TRC Corporate Consulting has a team of trained professionals with years of experience in fixed asset management and experts that have been involved in asset management for multi-faceted clients, resulting in effective management. Some of their tasks include:

  • Classifying of assets and maintaining a register
  • Physically verifying the assets
  • Tag new and existing assets
  • Reconcile the Fixed Assets
  • Create and maintain fixed assets register
  • Follow a standard procedure for fixed asset verification

Our professionals visit the clients’ to have a clear knowledge of their business and operations in a way that they can offer them tailored plans. Some of our major offerings include off-the-shelf software suites, resource planning systems, etc., which help fetch correct data and track assets. Also, asset tags are attached to all the fixed and moveable assets of the business for identifying individual assets, and asset tags with barcodes can be easily scanned using a hand-held barcode reader.

In the context of asset management and tracking, we benefit from our skilled team and their expertise, enabling your company to make a financially wise decision, which will help you in the long run. Contact us now to connect with our team!

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