Automate Physical Inventory & Reconciliation of Your Fixed Assets
Many perspectives collide to successfully complete a physical inventory. In the advent of saving time and money within a fixed asset management, your existing asset management system and comprehensive functionality automate the scanning and reconciliation of assets. The accuracy in your data can streamline every aspect of the inventory process. It’s difficult to find the time and tools to devote the attention to fixed assets that they deserve.
Being informative about all the nuances in the system is how managing a profitable business gets easy. Ensuring that an accurate fixed asset inventory is in place to provide this information is far more essential, without it, no amount of added processes, controls, or correct calculations can ensure the accuracy of fixed assets. The only reliable way to verify and validate the fixed asset information is to conduct a physical inventory.
To manage a lucrative business, it is essential to have information regarding the current location, use, state of repair, and usefulness of its productive assets. By implementing a detailed inventory process, organizations can
- Save time and money: By maximising your maintenance effectiveness, you can extend the longevity of your assets and improve productivity, which facilitates to cutting costs and increases profits. Also, streamlining the processes saves time and improves the capacity to grow.
- Improve data accuracy: Achieving various levels of user access and eliminating manual inputs at all stages keeps the data secure and accurate, which accelerates the approval processes. The anomalies in your data shouldn’t disrupt the growth functionality.
- Reduce theft: The central factors that contribute to reducing of theft are anticipation and detections. The most successful embezzlements fail if inventory and accounting records are organized and up to data. If the records are always lagging and the work is chaotic, it gets harder to detect.
- Simplify reconciliation: Aligning the collected and original asset data based on tag numbers, serial numbers or assets IDs can improve the reconciling process of the missing assets onsite.
- Recover: Anticipating a failure is a wise plan of action, if you don’t contemplate the consequences of a disaster, you can’t recover. By having an accurate inventory, and storing back-ups offsite, companies can be up and running again quickly.
It is distinctive that there are significant reasons for an organization to implement a fixed asset inventory solution. But where does an organization start this process? What is involved in implementing a fixed asset inventory solution that will provide the benefits listed?
- Maximize maintenance effectiveness.
- Streamline the maintenance process, so you can extend the longevity of your assets and improve productivity.
Reduce inventory costs.
- Avoid carrying unneeded inventory or experiencing downtime because of inadequate inventory.
- Increase warranty recovery.
- Improve your tracking of repairs that are eligible for warranty claims.
- Improve reliability and risk management.
- Anticipate and mitigate asset reliability and regulatory risks.
- Get flexible deployment.
- Implement on-premises, in the cloud, or both. It’s your choice. You’ll get the same full-featured system either way-not a scaled-down version like some systems.
The most typical of all the challenges is to be at the heart of every asset management operation and the lack of quality data. In order to make informed and educated business decisions about their operation, the data presented in the Computerized Maintenance Management System (CMMS) / Enterprise Asset Management (EAM) solution should be accurate, EAM static data is the most overlooked and under-appreciated element of the EAM system. Many organizations do not spend enough time up front defining naming conventions, asset hierarchies, failure codes, etc. and as a result reporting errors, it can also be difficult on the users. Having to surf your way through incomplete and inaccurate EAM data frustrates users and discourages system use. If the data foundation is not properly laid, then the EAM system will struggle to create value.
So what’s new?
The modern asset management system needs to achieve more challenging asset outcomes against a backdrop of ever-increasing regulation and financial constraint. To reach this goal, the implementation of EAM needs to be designed in a such a way, to gain the most synergies across the enterprise. Implementation needs to pull together resources to get greater efficiencies with better operational performance and financial transparency. Having a lot of unexpected failures due to lack of maintenance signifies that your assets aren’t as reliable as they should be. Assets may range from small discrete assets in remote locations to larger complex plant-type assets. Enterprise Asset Management aims to provide the appropriate regime for the best management of the asset in accordance with its value and the importance of its role to the organisation.
The fundamental reason why organisations implement asset management is because it makes good business sense. All asset-intensive organisations need an ordered, structured, disciplined way of controlling assets.
How do you identify flaws?
Each organisation should look to benchmark its fixed assets behaviours against its peers first and then against organisations where fixed assets are more critical of their existence. Ultimately, good inventory practices are common across industries, even though specific measures may differ. A culture is created where the entire business understands how driving more from assets helps achieve success.
Often with an element of fraud and financial misstatement, fixed assets get no respect. Although they’re considered low risk by auditors, fixed assets need attention. Are the controls really effective over this perceived low-risk area? Best practices enhance proper accounting, valuations and financial reporting.
Are you confident the representation of your fixed assets is accurately portrayed in the year-end financial statements? In many cases, your answer will be “Yes.” However, audits may yield a different answer. Although many organizations do not perform an inventory of current fixed assets and corresponding reconciliation, these steps provide an essential internal control for the financial reporting of fixed assets.
Fixed assets represent the long-term tangible assets an organization utilizes to produce and deliver its products or services and manage its operations. In many capital-intensive industries such as manufacturing, power generation and healthcare, fixed assets represent the largest item on the balance sheet. Historically, fixed assets have received little audit scrutiny and, as a result, some major financial frauds have been perpetrated through significant misstatements of fixed asset balances in the financial statements of public companies.
Fixed asset transactions typically represent the acquisition and disposal of assets and the allocation of related costs to reporting periods through depreciation expense. The internal controls over the acquisition of fixed assets are straightforward, easy to test and include the following:
- Issuance and approval of a purchase order.
- Receipt of assets and preparation of a receiving report.
- Receipt of an invoice from a vendor.
- Reconciliation of the vendor invoice to the related receiving report and purchase order.
- Authorization of the payment of the vendor invoice.
- Issuance of a check for payment of the vendor invoice.
- Posting of the entry in the equipment sub ledger.
- Posting of the equipment sub ledger activity to the related general ledger control accounts.
- Reconciliation of the general ledger control accounts to the equipment sub ledger
However, for a number of other fixed asset transactions, internal controls are not typically addressed. Resulting missteps include, but are not limited to, the following:
- Inadequate asset descriptions including missing manufacturer, model and serial number information.
- Little or no use of property identification tags.
- Inconsistent application of the capitalization threshold.
- Improper segregation of construction-in-progress projects into building and equipment accounts.
- Poor documentation of asset movement including disposal activity and transfers.
- Assignment of unreasonable lives for depreciation calculations.
- Infrequent or no periodic physical inventory/reconciliation.
An in depth review of the accounting records will often present the path to be followed. The assets age, type and availability details will define the field data requirements and how to conduct the reconciliation. It is at this point that a realistic budget and project strategy can be established. Most organizations face significant challenges related to tracking the location, quantity, condition, maintenance and the depreciation status of their fixed assets. Typically fixed assets are recorded and maintained in either a spreadsheet, fixed asset register (FAR) or an ERP system like SAP. These records are then periodically verified through audit activities, such as physical inventory.
Financial misstatements are usually a result of company’s challenges and struggle with manual physical inventory processes globally. Manual paper based processes are extremely time consuming and cumbersome.
Are you still using spreadsheets to track your fixed assets?
Budget restrictions and lack of readily available systems are some reasons many enterprises start out with very rudimentary asset tracking methods. Often, this takes the form of a spreadsheet. This is not to discount the value of spreadsheets; it’s a valuable tool with myriad of uses and benefits in the business world. Asset tracking just doesn’t happen to be one of them. Here’s why –
- Manual data entry is unreliable as it introduces the likelihood of human error.
- Issue of conflicting files, particularly if you’re not using a file-sharing platform.
- No integration with your accounting system.
To get maximum value from your EAM solution, your technicians need full access to your system anyplace, any time. Of course, some tasks can be completed while sitting at a desk, but some of the most important and valuable asset management tasks need to be done in the field, where many critical assets are located. Mobile access to EAM gives your maintenance and asset management professionals the information they need where they need it the most, at the point of performance. Having easy mobile access on virtually any popular mobile platform to improve the efficiency and effectiveness of asset management personnel who work in the field is very advantageous.
The key benefit of having a mobile maintenance application is undoubtedly, the effectiveness in having the real-time collaboration and information of the maintenance tasks. This reduces the manual and time-consuming activities as well as erroneous transactions. Companies need to have a long-term vision in embracing asset management mobility. Adoption of GPS technologies, RFIDs, rugged tablets and robust web service integration methods will help maintenance organizations to build highly secure mobile maintenance application integrated to the enterprise systems. This will provide aid in obtaining maintenance data and better connection between mobile technicians, managers and customers. It will, also, result in the overall reduction in cost.
What are we offering?
To overcome all these ambivalent processes, Innovapptive offers an SAP certified, simple, consumer grade mobile solution to automate the physical inventory and reconciliation process, by centralizing and automating data entry and capture. The first step that various representatives undertake when preparing to conduct a physical inventory and reconciliation for a client is to analyse their fixed asset records. With appropriate analysing you can unravel the issues experienced.
Innovapptive’s mAssetTag solution for mobile Asset Tagging and Tracking, allows automation of your fixed asset physical inventory reconciliation by simply scanning fixed assets using these peripherals and using the smart phones GPS functionality to record its most current location to meet regulatory requirement of completing a 20% reconciliation of your fixed assets. In as little as 4 weeks, large enterprises have started to automate their reconciliation of fixed assets by bridging the gap between global fixed asset locations and a centralized back office.
Mobile Fixed Asset Tracking and Tagging drives Proven Success A fixed asset reconciliation scheduler tool will allow your central asset management team to push fixed asset master records for reconciliation by location onto user’s mobile devices. The mobile device’s bar coding capability allows automation of fixed asset data such as location, status, check-in, check-outs and much more directly into your ERP system such as SAP. As a result, enterprises can witness the following business benefits by implementing such a solution.
- Over 40% improvement in employee productivity during audit cycles.
- Over 10 to 20% reduction in over payment of federal, state & property taxes.
- Over 15% reduction in insurance premiums by proactively identifying retired assets.
- Achieve 99% accuracy of fixed asset financial statements.
- 100% of global fixed assets reconciled to meet audit & regulatory requirements.
Innovapptive’s mInventory solution for mobile Inventory and Warehouse Management, uses RFID peripheral to automate critical inventory transactions such as inventory cycle counting, goods receipts, goods issue and stock look ups, resulting is accurate and up to date inventory information in SAP. mInventory mobile app, precise tracking and paperless management of inventory helps you increase productivity, lower costs, optimize your supply chain, and improve customer service. The following are the business benefits gained by implementing such a solution.
- Improve operational productivity and reduce costs through automation.
- Reduce inventory carrying costs by 5 – 10% with access to real-time stock levels.
- Ensure accurate, up to date inventory information by using barcode scanning for data entry.
- Speed up receipt and back-order reporting to and from shipping/receiving by over 35%.
- Manage physical inventory movement in real time and improve inventory accuracy by 30%.
- Perform physical and cycle counts quickly and achieve 98% accuracy of inventory levels.
- Streamline inventory cycle counting and reduce number of FTEs for cycle counting.
There more with Innovapptive’s RACE™ – Rapid App Configurator Engine
To keep pace with the growing expectations, a mix of pre-packaged mobile apps and custom mobile app development need to be considered in the long term strategy. Innovapptive Solutions, has pioneered in this area and developed a revolutionary product – Rapid App Configurator Engine (RACE) to take care of myriad product customizations vis-à-vis requirements of your organizations’ IT teams. This marks a new beginning in the annals of instant mobile app customization, redefining and transforming the way customizations can be carried out, driving innovation and business efficiency to new heights.
Innovapptive’s solutions come built-in with our configuration toolkit – RACE™ that empowers your IT teams to achieve infinite number of customizations of the mobile apps within minutes, translating to 40% of operational efficiency. Precisely, RACE empowers your IT teams to manage your evolving unique business requirements across core lines of business such as Sales, Finance, Supply Chain, Operations and Field Services. Irrespective of the size of your enterprise or the type of the infrastructure that your organization currently maintains, it helps you fuel your business engine and stay ahead of your competitors.
If you would like a demo of Innovapptive’s mobile solutions, please click on the link. Alternatively, if you would like to discuss with an Innovapptive solution expert, you can reach out to us by emailing us at firstname.lastname@example.org or you can reach a sales representative at (713) 275-1804.