Every entity whether public or private are required to conduct an annual physical count of all fixed assets to verify actual assets in hand and their value to ensure the accuracy of related financial records is known as asset physical verification.
Fixed Asset Audits & Verification
One has to keep track of all the fixed assets by maintaining the asset register. This asset register needs to be continuously updated with additions and disposals, also the assets must be depreciated on an annual basis.
The asset register is maintained in a specified format according to the entity, which shall comply with the requirements of any accounting requirements, which may be prescribed. An asset register can play a crucial role in asset physical verification.
Asset Tracking can be challenging for organizations. Assets can be re-assigned to various employees, moved from one location to another, or replaced by others.
Risk in Absence of Audits
In today's world, organizations face many risks related to asset management. If the asset stops working, then it's a loss of revenue for the company due to downtime.
In addition to this, the company has to spend more amount on fixing it in an unplanned manner, to restore the production in working condition.
Why Tracking Is Important for Asset Physical Verification?
Asset physical verification can be effective in terms of asset management. When you are performing an audit then asset physical verification is the most important activity of the audit. It enables auditors to verify assets with their asset health.
Using Spreadsheets to Track your Fixed Assets?
Budget constraints and lack of readily available systems are some reasons many companies 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 a myriad of uses and benefits in the business world. Asset tracking just doesn't fit in it.
Here's why -
- Manual data entry is unreliable as it is likely to have human error.
- Issue of conflicting files, particularly if you're not using a file-sharing platform.
- No integration with your accounting system.
How Asset Infinity Can Help You in the Audits?
With Asset Infinity an asset list/register of all the assets can be stored in a systematic manner. To fetch the details for a particular asset there are filters available based on location, categories, users, departments, status, and conditions.
PDF or Excel files can be exported for the filtered assets so that manual audits can be performed.
Following are the Benefits of Asset Infinity
- Create and design multiple barcode or QR code sticker templates as per the company standard. Add/delete any information field regarding assets in the sticker. Also, add a custom text in the sticker for each asset if required.
- Generate Barcode or QR code for the single or multiple assets right from the application and print on the custom format stickers.
- Scanning of barcode or QR code can fetch all the information related to the assets like its purchase date, condition, a user to whom it was allotted, and in which department.
- Asset's movement history can be exported with a full summary report on the transactions done on the assets into an excel sheet.
- Calculate asset depreciation right from the application using a straight line or WDV methods and export the full report in the form of excel.
- Assets can be discarded from the dashboard - define your own reason for discarding of assets whether the assets are lost, stolen, sold or simply discarded.
- Keep a track of consumable items as well with the Asset Infinity. These items can be added with the information like average price, units, descriptions. These items can also be linked with the assets in case if the item is a spare part of the asset and also the item can be attached with the scheduled activity of the asset maintenance so that the item gets auto consumed when the particular activity is performed.
- Re-order level can also be defined in order to keep the stock available all the time at all locations and if the item goes below the specified limit an alert is raised in the form of notification.
- All reports on the transaction done on the items can be viewed and can be exported in the form of excel at any time.
- In addition to the above, the self-audit feature is also available; users will get notifications on mobile and email to validate the assets that they have. This will remove the manpower cost involved in performing asset physical verification.
With Asset Infinity the auditing of the assets can be very simplified and accurate. Furthermore, the employees are empowered to conduct self-audit and contribute to the physical asset verification of the assets.
This mitigates the responsibilities and can help in the effective management of resources. It enables you to track your assets using Barcode tagging, QR code tagging, RFID tags tracking, NFC tags tracking. Asset Infinity offers a free 14-day trial - no credit card required!
Frequently Asked Questions (FAQs)
1. What Is Asset Physical Verification?
Asset physical verification is done during the audit procedure. It is done in order to avoid fraud as organization overstates their asset so that that overall worth value increase so that they can get fund from investors. This activity is done at the end of the year and some organizations do it by themselves so that they can find assets that are missing. Physical verification is an important aspect of maintaining compliance with the industry.
2. What is the procedure of asset physical verification?
The process is simple organization creates a list of all assets and hand over them to auditors then the auditor verifies them one by one & compares them with the actual asset list. Moreover, the auditor can also check the condition of assets and paperwork of each asset as well. The objective of his process is to check that all assets actually exist physically not just on paper because lots of organization presents overvalue of their assets.
3. Why asset tracking technique is important for physical verification?
Asset tracking technique is used in tags & labels. They are important for physical verification as you can get regular updates about assets. For asset verification, you can exactly where an asset is located when it will be returned. It makes you more efficient and allows you to plan for audits accordingly.