Fixed asset management tracks a company’s assets, including location and condition, to ensure accurate financial records. It involves assigning tracking numbers, monitoring movements, and calculating depreciation. Technology can simplify the process, and it helps with inventory management and tax assessment.
Fixed asset management is an accounting process that seeks to track the status of a company’s assets, including the location, condition, and other distinguishing characteristics of each asset. The idea behind this process is to ensure that the company’s financial records are constantly updated to reflect the actual status of all fixed assets in terms of current value. There are several steps involved in responsibly managing fixed assets, including using technology to identify similar third-party assets, tracking movements of those assets from one location to another, and calculating any depreciation associated with each asset over successive fiscal periods.
A key element of fixed asset management is always knowing how many units of a given tangible asset the company owns. For example, a manufacturing company would keep track of the number of forklifts owned and operated as part of the normal course of business productivity. Rather than simply keeping a master count of these forklifts, each asset would be assigned a tracking or serial number. The number would be used to identify the asset in accounting records and also track which area or department each elevator is currently assigned to as part of the asset tracking process. This allows the company to keep a running inventory and quickly allocate assets to other areas as and when needed, without losing track of what is being used in the overall operation of the business.
Asset movement tracking is essential to the success of any fixed asset management strategy. Depending on the nature of the business, this can be a very simple process that requires employees to use a log entry as equipment and other business assets are moved from one department to another. In other configurations, the use of electronic scanners makes it possible to report movements to a central tracking facility, with asset management software used to receive data from scanners and automatically update the location of each scanned asset. The use of modern technology is especially useful when tangible assets are sometimes transferred between facilities, as scanners make it possible to timestamp each movement, providing essential data for inventory management and tax assessment for each facility. .
Fixed asset management is not just about keeping track of which assets belong and where they are located. The process also involves evaluating the depreciation incurred on each asset during a specific fiscal period. Again, nowadays software makes managing the process much easier as the value change is identified and recorded using the program. This allows you to quickly determine the amount of taxes due on the asset for a given period. As a result, the company is in a position to always know the current value of assets, as well as using historical data to document depreciation claims filed in prior fiscal periods.
Asset Smart.
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