Fixed assets are tangible assets like machinery, building, facilities, etc., which an organization uses to generate revenue. These assets are listed on the balance sheet and most of them generally depreciate over time. For asset-intensive industries to generate accurate financial reports and asset valuation, companies must regularly track the change in the value of their assets.
That said, companies using manual paper-based processes for asset management struggle to keep the list of assets and their valuation. Manual audits are cumbersome, slow, and error-prone. The result is often inaccurate accounting, which leaves the company exposed to greater financial risks and other exposure.
Financial Implications of Bad Data/Inaccurate Accounting
Manual asset management comes with many challenges, the biggest being poor data and inaccurate accounting. On the financial side, the risks associated with bad data include overpaying taxes, erroneous depreciation, penalties, and fines. Inaccurate financial statements can also harm the company’s reputation with lenders and investors, stunting future company growth.
In the regulatory arena, risks involve compliance fines and sanctions. Safety threats can also arise from poor asset management data and practices.
The Harvard Business Review has reported:
- Knowledge workers waste 50 percent of their time hunting for data, finding and correcting errors, and trying to confirm information they don’t trust.
- Record keepers spend 60 percent of their time organizing and cleaning up bad data.
Digital transformations, including a focus on just-in-time production and other enablers, are important, but should not come at the expense of lack of investment in frontline workers who currently use manual processes and (or) siloed solutions to execute inventory and asset reconciliation. Legacy systems put pressure on the frontline workers like handling paper trails, collecting data manually, cross-checking the entries, and traveling back and forth between the job location and the back office.
How Can Digitization Help?
Asset inventory management involves the complete transactional data of fixed assets, which is too complex to capture manually. Enterprise mobility solutions help businesses realize a connected fixed assets strategy. Connected fixed asset solutions utilize smartphones and rugged handheld devices to replace paper and spreadsheets. They leverage some of the advanced features and technologies to connect the last-mile front-line workers with the back-office system of records to increase data reliability.
Though most businesses use ERP systems and fixed asset management solutions to digitize their processes, their non-intuitive user experience bars front-line workers from using these systems in the field. So, workers collect data on paper and hand it over to back-office staff to enter into the ERP systems such as SAP and IBM Maximo.
A connected fixed assets platform changes this status quo and enables front-line workers to put accurate, reliable information into the ERP systems from the field itself. By providing real-time insights into your fixed assets, the connected fixed assets platform saves workers’ time and improves data accuracy.
Get Accurate Financial Reporting and Fixed Assets Reconciliation With Innovapptive
Innovapptive’s Connected Fixed Assets application, mAssetTag, delivers greater control and efficiency when planning, acquiring, auditing, taking inventory, and resolving fixed asset discrepancies. mAssetTag offers end-to-end mobile fixed asset management that seamlessly integrates with SAP and IBM Maximo, giving visibility into lost or stolen assets, eliminating overpayments, and aligning business activities with real-time inventory levels.To learn more about our mAssetTag, watch this video or schedule a free demo today.
