What Are the Benefits of Conducting an Annual Inventory of Your Fixed Assets?
Not only are accurate records of your fixed assets required by law, but they are essential to maintain the integrity of any school business balance sheets. Without proper tracking, theft, misplacement, and harm to assets can occur, resulting in a significant financial loss each year. State financial records for state auditing may also become outdated.
The value of fixed assets is based on their age, function, and cosmetic condition, as well as whether or not they are covered by a warranty. When creating a list of assets, it is important to also record serial numbers, date of purchase, and repairs and services that have been completed. If the asset records are not kept accurate, financial statements will be inaccurate and losses or unavailability of necessary assets may occur.
Auditing assets in house routinely helps to identify discrepancies, errors, and keep the school and agency in accordance with state and federal regulations. A 3rd party inventory and efficient inventory software will help to increase accountability and transparency across the organization.
Basic Procedures for an Annual Fixed Asset Inventory:
- Decide who will perform your inventory: Decide which team you will have performing the inventory. In-house or 3rd party? For reasons we will touch on later we highly recommend not using the same team responsible for monitoring fixed assets on a day-to-day basis as this could cause a conflict of interest in the outcome of an inventory.
- Determine whether you are using a master list or building a new inventory: Once you determine who is going to perform your inventory, it is time to start preparing your data. A key step is preparing a master list of all your assets in the district to work off of. Or if you have not kept up to date records to this point, it may make more sense to build an inventory from scratch and get a fresh start.. In either case an inventory management software will become very useful at this point in the process! With the proper software you can house, build and reconcile all necessary inventory data and tasks in one easy to access spot!
- Review and Understand State and Federal Regulations: When having an inventory performed it is important to understand the key data points that are required for your state and federal audits. Otherwise, time and money invested into an annual inventory may be in vain. We’ve put together a helpful starting guide for understanding key reporting requirements for compliance with your fixed and capital assets.
- Set Audit Goals: At this point it is important to set proper goals for your audit. We mentioned earlier using a separate team to perform your inventory; the goal of your yearly inventory is not to be perfect. It is to get a realistic snapshot of where you stand in time so you can understand where your resources are actually being allocated, which are being used and what assets need to be retired or are missing. If you use the same team responsible for monitoring assets on a day to day basis, they may be motivated to “find” every item so as not to appear to have “lost” anything. When in reality this is a normal occurrence that should be caught rather than covered up. A 3rd party team, such as Divot, will share the same goals!
- Perform your Inventory: Time to get the inventory done quickly and efficiently! In our experience using a 3rd party company, such as Divot Assets, will save you time and money in the long run. Rather than rallying employees from other departments and taking away from their core tasks you can utilize an efficient team of experts to move through your schools and inventory efficiently. Whether it is working with a current master file or building an inventory from scratch, our team has the most experience in the industry.
- Review and Reconcile your findings: Performing the physical inventory is only half the battle. Once your inventory is complete, you must do something with the data for it to be useful! We’ve seen too many scenarios where a company has helped perform an inventory and left their school district with a stack of data and no next steps. Divot Assets owns the entire inventory process, from performing the inventory, helping to reconcile your data all the way to uploading your most current records into the proper software to be useful for your team!
Getting the Most Out of Your Annual Inventory With an Inventory Management Software:
- Track By Funding Source: Stay in compliance by tracking your assets by funding source. Easily generate reports for all your Federal Programs assets.
- Reporting: Generate reports for all your asset needs. Report on assets by location, status, funding source, type, category, value, or any other data source required.
- Bulk Upload/Edit: Quickly add assets, users, and more with our bulk upload and edit tools. No more lengthy processes by hand.
- Sync W/ Other Tools: Sync your data across all your software programs including Harris NextGen, SmartFusion, InfiniteVisions, Active Directory, and more.
- Check-In/Out: Quickly add assets, users, and more with our bulk upload and edit tools. No more lengthy processes by hand.
- Mobile Scanner: Quickly checkout, add, edit, and manage assets on the go. Mobile scanners are perfect for IT and Media staff.