An audit is an inevitable activity that needs to be done at the end of the financial year. Usually, audits are long and hectic because of assets are in different-different locations and summoning them is important for audit. But when assets are tagged or labeled with asset tracking technology such as RFID then audit becomes quite simpler and easier.
Therefore, we can say that RFID technology is an ally for the organization. In this blog, we will know how RFID is helpful in the asset audit process. So, without wasting any time let us begin.
What Is RFID Technology?
The full form of RFID is radio frequency identification. It is one of the most well-known technologies for asset tracking and asset management.
In RFID tags data is encoded which is captured by radio waves or a reader. RFID label captures data and stores it in the database.
RFID technology provides several advantages to organizations such as it is faster than barcode and it does not need to be scanned in a straight line. And most importantly you can scan multiple items tags at a single time, so it makes you more efficient and productive.
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Chances of human error are also reduced as human intervention is minimized. Label antenna and reader three are the main parts of RFID technology.
Mainly RFID tags can be divided into two main categories active tags and passive tags. RFID technology utilization is growing at a great speed. According to the Verified Market Research, “RFID Market size was valued at USD 9.22 Billion in 2020 and is projected to reach USD 19.47 Billion by 2028, growing at a CAGR of 9.79% from 2021 to 2028.”
What Is an Asset Audit Process?
Asset audit procedures are long and hectic. Asset auditing is done for physical asset verification. In this process, the business creates a complete asset list, and the auditor compares them with the existing assets.
It is helpful in understanding the complete picture of assets with assets documents also verified. The purpose of the asset audit process is to cross-check if assets exist or not in the business.
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Organize itself creates a complete asset list and maintains them that is done with asset register has all the information related to every asset it is helpful to asset auditor and for the organization itself. An audit can be categorized into internal audit and external audit.
How Is RFID Technology Helpful in the Asset Auditing Process?
RFID can scan multiple items at a single time. It can be beneficial for asset verification easily. As we all know assets are moved from one place to another, especially when the organization's size is big.
Assets can be reassigned relocated and keeping track of each track can be a difficult task. RFID asset tracking can be very helpful in avoiding this type of scenario.
Similarly, RFID technology also helps in the asset auditing process by keeping track of every asset by providing an accurate location. An RFID tag is attached to each asset that provides the location of every asset which is very helpful in running an effective asset audit process.
RFID tags assist the organization in asset maintenance, maintaining compliance, and so on.
With the help of asset auditing software, the organization can plan audits and implement them in no time. These types of software are also helpful in assigning a specific set of assets to a specific user or auditor.
Therefore, no work duplicity occurs furthermore it enables you to work in offline mode so that whenever the system is connected to the Internet it synchronizes all the information.
As we said earlier asset audit is a long and hectic process but when you utilize automated software such as asset management software and RFID tags then this process becomes quite simple, easy, and quick. With these tools, you can start and finish audits without any complications.
Moreover, you can conduct audits through mobile which also helps in optimizing the process of Asset auditing. Furthermore, asset management software comes with cloud technology.
It means that you can send auditors to different locations or fetch information of assets sent to different locations. It assists the auditor in finishing the audit quickly and efficiently.
If you want to run the business efficiently and keep track of all your assets, then utilizing an RFID tag is important. However, you will need asset management software as well so that you can conduct audits successfully and easily with RFID tags & automated software.
Also Read: Importance of Assets Auditing for Equipment & Tool Rental Companies
Frequently Asked Questions (FAQs)
1. What Is the Difference Between Passive Tag and Active Tag?
The difference between the passive tag and active tag is as follows:
1. Passive tag has no internal power source whereas active tag is battery powered.
2. The active tag provides a more accurate asset location compared to the passive tag.
3. An active tag has a longer reading range than a passive tag.
4. Passive tags are cost-effective compared to active tags.
2. What Is the Difference Between Internal and External Audits?
Internal audit is done by the organization itself it is helpful in discovering errors and Assets which are missing. The purpose of an internal audit is to prepare the organization for the external audit. Internal audit reveals assets that are damaged & asset performance not up to the mark.
An external audit is performed in the case when a private organization is going to be public. Auditors check all the factors such as checking balance sheet, asset's condition, compliance, and so on.
3. Why is regular asset auditing important?
Asset auditing is important for various reasons. It is helpful in asset verification physically and plays a crucial role in concluding the actual worth value of the organization. Asset auditing is also important because if you do not perform audits at regular intervals then chances of acid theft asset misplacement Asset loss are increased. Regular asset audit enhances accountability and transparency. Auditing also ensures that you are following the rules and regulations as per the industry basis.