Importance and Best Practices of Maintaining a Fixed Asset Register

There are still countless medium & small-size organizations that are utilizing spreadsheets or manual methods for asset tracking & storing asset information. This traditional method can be used until small has extremely limited assets or countable assets. But when organizations grow asset numbers grow as well and spreadsheet utilization becomes less effective due to inaccuracy. Inaccuracy increases due to lots of people accessing it and unintentionally data is changed due to type error or human error.

As a result, you have the wrong number mentioned in the spreadsheet, you look for assets in various places, and assets are found in distinct locations. All these types of scenarios occur due to spreadsheets. So, what is the solution to all these problems? The solution is an asset register! What is asset register, why it is important & what are the main practices of maintaining a fixed asset register, all these topics we will cover in this blog! So, without wasting any time let us begin.

What Is an Asset Register?

An asset register is a register in which all the information is stored related to each asset. An asset register is a list of all assets and equipment that an organization owns. It includes various details that we have given below:

1. Asset name & tag number

2. Each asset such as its condition

3. When it is purchased

4. Currently who has it

5. When the last service was given

6. From which vendor it is purchased

7. Procurement date & disposal date

8. Status of asset

9. Where it is located

10. Current value

11. Life expectancy

12. NAV (Net Asset Value)

13. Depreciation method

So, these are the few vital details that you keep in a well-maintained asset register.

What Is the Importance of an Asset Register?

An asset register is extremely helpful to organizations in several aspects. Asset register plays a crucial role in asset depreciation, asset auditing process, and providing valuable information.

Another reason why asset register is important is that it helps in finding all assets which exist but are not used. So, you can either bring that asset into use or sell or exchange it.

What Are the Best Practices of Maintaining a Fixed Asset Register?

Below we have discussed fixed asset register best practices:

1. Eliminate Spreadsheet Utilization

As we said earlier that spreadsheet is only good for small size businesses or when you have limited assets. but when a set number grows, Spreadsheet utilization becomes more complicated and less effective.

Since a fixed asset register is very crucial for business it is particularly important that you have accurate information. You can lose data or data accuracy can be compromised so you must not use a spreadsheet for asset tracking & management, especially in a huge organization.

2. Don’t Keep Unproductive Assets

By unproductive assets, we mean assets that are not coming into use. With the asset register, you can find assets that you have not been using for a long time, but it is there. So, either you can use assets in your business or sell but do not just keep them there or create a plan to bring that asset into utilization.

When assets are not used it is a waste of resources which is not a good practice of fixed asset register. It is not productive at all.

3. Ensure Assets Are Tagged

If you want to be more precise and more accurate about your assets then you can use asset tracking technology such as barcode, QR (Quick Response) Code, RFID (Radio Frequency Identification), GPS (Global Position System), NFC (Near Field Communication), BLE (Bluetooth Low Energy), IoT (Internet of Things) and so on.

These technologies are helpful in providing accurate locations of assets that help organizations in making accurate decisions. These asset tracking technologies can be used in the form of tags, labels, or chips that are attached to assets which help the organization in retrieving real-time information of assets.

When assets are tagged you can easily know asset location and physical verification of assets for audit purposes. It makes the process simpler and easier.

4. Utilize Automated Software

One of the most important practices is investing in automated software. It automated the process and boosts the efficiency of your employees and organizations.

When optimization is your goal, you can achieve a lot of improvement when you invest in automated software such as asset management software.

This software is helpful in asset monitoring and tracking and management and emphasizes asset maintenance and enhances the efficiency of the asset. For the asset register, you can get a lot of information about assets with asset management software assistance.

Conclusion

So, these are a few of the main fixed asset register best practices that every middle and big size organization must implement. For better results, asset tags and asset management software must be used along with fixed asset register best practices.

Undoubtedly, you will achieve some great outcomes and your bottom line will improve. An asset register is very useful when you want to take your business to a whole new level. It will enhance your productivity and fixed asset utilization will be improved as well.

Frequently Asked Questions (FAQs)

What Are the Advantages That Come with Asset Management Software for Better Asset Register Maintenance?

You can get all the asset expenses history and salvage value and asset useful life. Other than this you also get different depreciation methods. Moreover, asset management software also enables you to put additional information such as videos, photos, descriptions. You can put other files and documents related to assets as well. These are a few of the advantages that come with asset management software for better asset register maintenance.

What Are the Diverse Types of Asset Registers?

Various types of asset register are discussed below:

Fixed Asset Register - Fixed asset registers have those assets which have a life of more than one year. These assets are used in running daily business operations and production work.

Digital Asset Register - when you manage assets digitally it enables you to manage assets in a digital way. You can add assets, pictures, videos, descriptions for better understanding.

IT Asset Register - An IT asset register keeps track of all IT assets and software locations. Usually, all IT assets are kept in a different asset register that is called the IT asset register.

What Are the Various Types of Depreciation Methods?

Below we have mentioned a few of the main depreciation methods:

1. Double declining Balance Depreciation method

2. Sum of all year

3. Unit of production

4. Straight-line depreciation method