THANK YOU FOR SUBSCRIBING
Technology To Reduce The Risk Of Ghost And Zombie Assets In Five Ways
In today’s competitive market, it is more important than ever for companies to minimize their compliance risks by properly depreciating their fixed assets.
FREMONT, CA: As businesses compete in today's market, minimizing compliance risks by correctly depreciating their fixed assets is more crucial than ever. If a corporation does not identify what fixed assets it has on its books, which is necessary for computing fixed asset depreciation, it will soon be faced with a complex and time-consuming dilemma. Failure to follow proper depreciation schedules might result in the creation of ghost and zombie assets. Zombie assets exist within the organisation but aren't included in a depreciation schedule, whereas ghost assets are shown on the balance sheet but can't be physically located. The cost of transporting ghost and zombie assets can be alarming as their titles suggest. Ghost assets can lead to inaccurate reductions in tax liabilities and violations of compliance rules. Companies often overpay property taxes and insurance fees as a result of zombie assets. Both ghost and zombie assets are the results of incorrect asset tracking. While spreadsheets are commonly used to manage fixed assets, these leave you vulnerable to ghost and zombie assets because they don't provide real-time visibility and rely on error-prone manual data entry.
1. Inventory management: Fixed assets should be documented regularly using a consistent manner at each business site to enable effective management. To help with physical inventories and data management in one single location, a fixed asset management solution offers built-in quality and accuracy checks. Accounting and facilities departments, or any stakeholders, should have easy access to inventory data to set up a system for conducting inventories and adding new assets to the fixed asset management system after purchase. Both the facilities team and the fixed asset accounting managers may rest assured that continuous operating operations will produce the most accurate data in the companywide fixed asset management system.
2. Asset tagging: When a company owns many fixed assets that are almost identical, it's easy to dispose of the wrong ones when it's time to retire them. The ideal approach is to use bar code labels to designate each asset with a unique identity. This has the added benefit of speeding up the inventory process due to handheld equipment that can scan and record each bar code in a matter of seconds. Labels are a crucial part of fixed asset management that is frequently disregarded. Your solution should provide a range of labels that may be printed on demand to fulfil business standards, based on environmental constraints, bar code requirements, and custom printing demands.
3. Tracking and depreciating fixed assets: Using a spreadsheet to manage important data and asset details could be complicated. For a pulse on self-constructed assets, it is necessary to rapidly access and filter critical information such as disposals, transfers, labour, locations, materials, and capital investments, as well as generally accepted accounting principles (GAAP). Digital tracking helps businesses to automate the customization of the exact data points to track, saving time and letting to conduct a confident analysis. Typically, robust solutions allow the development of bespoke depreciation methods, which can be used to track hundreds of different types of assets in real time.
4. Workflow integration: Managing fixed assets requires collaboration between many stakeholders, and the software solution should support this level of collaboration. When formulas are handed from one employee to the next, they can break, or incorrect cell references can result in wrong values. These misconceptions can lead to more serious issues. As part of your fixed asset management solution, having a consolidated repository of asset, lifespan, and performance data can help you overcome these data difficulties. Integration with your company's purchasing or accounting software gives you, even more, control and convenience. Purchasing data is automatically transferred from one business stream to the next, reducing human error and assuring accuracy at every point of contact. The requirement for repeated entries or data exports between accounting and fixed asset reporting systems is eliminated with integrated accounting and fixed asset reporting systems.