If you lead the finance department for an organization or manage, inventory, and audit fixed assets periodically, you can easily relate to the challenges involved with in-house fixed asset verification or fixed asset audit.
We highlight here, top-6 fixed asset verification challenges identified across 200+ projects executed for medium to large businesses.
1. No dedicated team
Most times, existing resources from the finance and admin teams are tasked to carry out the periodic fixed asset verification. Fundamentally, this seems right. But the resources assigned generally are required to carry out this additional task of asset verification, along with their regular work, which they may be already burdened with. For the lack of time, resources and incentives, the execution and outcome may not be thorough, leading to inaccuracies that can keep compounding over the years. It is also likely that the activity is not completed within the stipulated timelines, leading to non-compliance and other issues.
2. Asset verification across geography
If you are a medium to large organization with complex operations and assets spread across multiple units, offices, branches, and even vendors, this may be an arduous task for your team. Assets that are assigned to your employees for their official and personal use, and which may be deployed at their residences, add further complication to the execution of asset verification projects.
Typically, teams at the Head office that are tasked with asset verification activity, struggle to coordinate with multiple stakeholders and ground staff at each of these locations to get the job done. Many times, the stakeholders at multiple locations are also short-staffed to carry out such activities.
3. Non-standard asset nomenclature
This may sound rudimentary, but is in-fact one of the main reasons for complications in carrying out asset verification activities.
Purchase or finance departments record assets in the company books, and this is done in-line with the asset’s technical description or as per the description in the invoice. Most of the time, the description recorded in the books does not match with the nomenclature used by the ground teams like engineering or admin teams. This difference in nomenclature leads to a lot of discrepancies during fixed asset verification as the ground staff ends up unable to find a lot of assets as per records and find assets that are not in the books.
4. Non-standard approach
Any project outcome primarily depends upon understanding the objectives and planning the execution strategy for the same. Despite similarities in industry and business, no two projects can be approached with the same execution strategy.
Before you start a fixed asset verification activity, it is quite important that you determine challenges specific to your business, teams, as-is asset data, and type of assets. You will also need to identify and finalize SPOCs, details to be captured on-ground, data capture & reporting formats, planning, scheduling & coordination of on-ground activity, and availability of resources are just a few of the important aspects that cannot be ignored.
This not only helps to devise a standardized approach but also takes off a lot of stress related to such project executions and meet the project timelines.
5. Expensive
Deploying your internal resources to carry out a fixed asset verification activity may seem like an in-expensive proposition. But you need to consider the opportunity cost of the employee productivity, multitude other resources deployed, stretched timelines, non-assured outcomes, and possible cost of compliance. All these add up to the actual cost of carrying out such activity and is actually many time expensive than hiring a professional agency for your fixed asset verification activity.
6. Biased
Call it biased or partial or fixed, if your own team is tasked with verification of your fixed assets, the outcomes are seldom in-line with reality. This could be due to affinity among employees or not being thorough or in the worst case, people trying to cover up inefficiencies.
While the above are the most common challenges, most businesses also tend to present challenges specific to their industry and operations.
Benefits of hiring a professional agency for fixed asset verification
Hiring a 3rd party agency specializing in Fixed asset verification and audit services can mitigates all the above challenges to a great extent and also add a host of other benefits Here’s how.
1. Experience and expertise
A professional agency generally has wide experience and expertise of carrying out fixed asset verification projects of different magnitude. They bring in know-how and best practices of similar businesses, which is again an added advantage.
2. Standardized approach
With a pre-defined multi-step approach, a professional agency works closely with all the stakeholders to,
- Determine the objectives, understand challenges specific to your business & project,
- Identify and finalize SPOCs and plan a customized execution strategy.
- Analyze as-is asset data and coordinate with SPOCs to standardize asset nomenclature.
- Assess type of assets to determine the type, size and material of tags to be used.
- Finalize details to be captured on-ground, data capture & reporting formats.
- Plan, schedule & coordinate on-ground activity basis availability of resources.
3. Dedicated team and reach
One of the main advantages of hiring a professional agency for a fixed asset verification project is their well-developed ecosystem to execute such projects across geographies.
The ecosystem brings together experienced and dedicated
- project managers,
- supervisors,
- ground staff,
- back-end support teams
- Logistics and,
- Hardware, stationery & software partners
This not only results in faster and timely completion of the project and but also ensures outcome closer to reality.
4. In-expensive and higher ROI
Hiring an 3rd party professional agency to carry out your fixed asset verification activity is actually more cost effective that getting it done in-house. The agency’s experience, standardized approach, readily available resources across geographies (read lower travel and boarding costs), overall ecosystem, and much lower efforts from your teams result in overall lowered costs and substantially higher ROI.
5. Un-biased
Hiring a professional agency has multiple advantages like
- Thorough and unbiased verification and reporting by the team.
- Team is responsible for giving you current position of your assets and doesn’t need to cover up for any discrepancies.
- Ability to push all the stake-holders and SPOCs to complete the work fast and as per the planned timelines.
If any these challenges resonate with your business and if you would like to benefit from hiring a professional agency to carry out your fixed asset verification, tagging, and streamlining activity, we can help you.
Learn more about fixed asset verification services