How would you best describe the management of your IT assets? Is difficult to log and report your assets that have been repaired, or does it facilitate confident and effective forecasting and reporting?
What are the challenges of managing your fleet using a spreadsheet?
If your company is using a spreadsheet or legacy software, there will only be so much you will be able to do. This is due to the reason that using spreadsheets lacks an audit trail. The only thing that you will truly be able to keep track of is who last edited the sheet, as all modifications to devices have to be input manually. This means that spreadsheets can have accidental changes that can compromise the integrity of the data you are keeping.
What drives companies towards asset management systems?
There are numerous reasons why schools and businesses gravitate towards asset management systems. These include maintaining secure and stable data, growing quantities of devices, complex data, and limited skilled manpower.
On average, around forty-five percent of schools and companies use an asset management system due to the growing quantities of devices that they have to manage. When accounting for all of your assets, it is imperative that you have the correct tools and systems for the job. Combining this with understanding the risks associated with the life cycles of your assets, plays a major role in finding cost-saving opportunities that could be hidden.
Here are ten ways that you can reduce the risks that are associated with the life cycles of your assets.
1. Register all of your assets accurately.
When you track all of your assets, you need to know the following information. What is its location, purchase price and date, its AUE date, and depreciated value for both tax and accounting purposes.
2. Are you compliant with current federal TAS rules?
It is very difficult to keep up with the ever-changing federal tax codes. This, however, can be beneficial to businesses as they can find numerous tax breaks available to them.
3. Calculating an accurate tax and generally accepted accounting principles(GAAP).
It can be time-consuming if you have to go back and forth between multiple different depreciation methods and calculations for your various assets. This can also be extremely inefficient. Having an automated system helps to improve accuracy on tax changes, while also freeing up your staff and allowing them to focus more of their time elsewhere. This will help eliminate your biggest productivity drains and help your business take advantage of the alternative depreciation system (ADS) rules and other parts of the Tax Cuts and Jobs Act.
Staying on top of this will help you to stop overpaying taxes for devices that have been decommissioned and are no longer used by your company.
4. Accurately report your IRS forms, depreciation expense, general ledger, and roll your reports forward.
Having data that is inaccurate on IRS forms 4562 and 4797 has a major impact on your reporting. This affects your period closing, financial statement, and tax reporting. Having this information correct could save your business from large penalty fees and cracks in the foundation of your finances.
5. Accounting for disposals, retirements and transfers accurately.
Making sure that this information is correct will save you from the zombie and ghost assets mentioned in a previous article. As stated before, businesses can have up to thirty percent of the fleet as zombie or ghost assets. To recap. ghost assets are those that you have in your list, but you do not physically have the asset, while zombie assets are those the you have, but they are not on you list. This can easily cost your business thousands of dollars depending upon how many assets you have.
6. Have an efficient workflow integration for your assets.
When using spreadsheets, the formulas that are contained in the one you are using can be altered or break when you are sharing or transferring the sheet with someone else. Due to this, it is easy for inaccuracies to occur. It is important to be able to integrate with other aspects of you business. This will help simplify the flow between accounting and assets.
7. Forecasting fixed assets as you expand.
As your company grows, and takes on more projects, it is important to be able to forecast how many devices you will need to have for each project, and any additional ones you might need for people in support roles.
8. Have a set budget for assets.
Being able to have a set budget for your assets adds additional accountability that will help your company not overspend and reduce the over/under payment on depreciation.
9. Track your cost and spend against your budget.
Use reports to plan any future projects or expansion so that you have an accurately forecast what this expansion will cost.
10. Make sure you manage and monitor your asset status closely.
It should be seamless to migrate devices from the acquisition phase to the deployment and depreciation phase. As you grow, you need to have a great system that streamlines your management of assets. Doing this will give your company the ability to simplify your operational and financial workflows. Know about your new products will allow you to better manage your assets which will increase the productivity of those managing the assets, and help with the cost savings.