Tracking of fixed assets through its lifecycle is very important for any organization.
An organization with a large number of fixed assets is required to tag, track, account, and reconcile its asset, which is vital in monitoring assets throughout their lifecycle across locations.
Fixed Assets Accounting Issues
- General Ledger and Fixed Asset Register (FAR) mismatch.
- Independent asset wrongly accounted as a single purchase
- Already scrapped assets still appearing in the books (physically not available)
- Improper accounting of spares: Significant spares been written off or consumables being capitalized
- Asset transferred from original premises to other premises. However, costing is computed to products produced in the original premises
- Not recorded under appropriate asset class resulting in incorrect deprecation
Fixed Assets Tracking Issues
- Asset Addition– purchased but not recorded in FAR
- Asset Deletion- Asset disposed of/ Sold but not recorded in FAR
- Asset Movement– Assets have been moved without any documentation or audit trail
- Idle and obsolete assets are still treated as good
- Changes in fixed asset recording practices over the years have not been given effect to the FAR
- Absence of periodic audits
- Asset with no tags/ serial number/ proper description in FAR- Those kinds of assets are difficult to track
- Absence of Fixed Asset Management Software
Incomplete Fixed Asset Register
- Detailed asset descriptions may not have been updated in the FAR such as the Model number and Serial Number, Manufacturer name, etc.
- Asset location may not have been updated in FAR
- Custodian of asset may not have updated in FAR
- Asset tracking will be difficult with incomplete FAR
Absence of Standard Operating Procedure
- Absence of Fixed Asset Management Policy
- Asset Procurement/ Deploying issue – In absence of SOP, the purchase of assets and deploying/ installing on time place will be more difficult.
- No visibility on Transfer/ Disposal of Asset- In absence of SOP.
At MCA, with our in-depth experience, we help clients in streamlining their fixed asset function.
We have physically verified and tagged ~1 million assets, streamlined the Fixed Asset Management function including the Largest E-Commerce player in the MENA region, the Largest Optical Company, other large Government entities amongst others.
Fixed Assets Management Solution
- Exhaustive physical asset identification, verification, recording & Tagging
- Gathering supporting documents for the existing Fixed asset register
- Reconciliation and mapping of assets with supporting documents
- Asset value allocation and creation of Fixed Asset Register
- Preparation of Fixed Asset Policy and SOP’s
- Asset Management and Tracking Platform with the integration of ERP, and user training.
Download our Fixed Asset Management Profile to know more.
