Most businesses depend on pen and paper or spreadsheets for managing their inventory and assets. Even when companies have an effective Asset Management Software solution, there is a tendency to export asset data into spreadsheets. As a result, there is a significant increase in inventory write-off. Large businesses have teams of auditors and accountants who help them leverage the value of their physical assets. Small companies always tend to take the matter into their hand, especially when it comes to managing assets that can impact cash flow, debt, and financing avenues. Small businesses often do not appreciate that their assets help them produce income, yet they do not keep an accurate record of all their assets.

In its simplest form, asset registers are a detailed list compiled of all business assets. It includes details such as location, condition, and owner. The purpose of an asset register is to enable businesses to know the status, procurement date, price, location, depreciation, and current value of each asset. An accurate asset register has an overall positive impact on a business’s bottom line and can increase business revenue and cash flow by 5 – 18%.

Different Types of Asset Registers

The type of asset register that a company builds depends on the size of its operations. Not only can registers be in the form of paper, spreadsheets, or specialized asset register software, they can also be specific to the type of asset. Small businesses have just one asset register that consists of the data of all purchases. Typically, when companies have only one register, it is called an asset register. But, depending on a business’ capitalization policy, this also includes fixed assets that are movable too. For example, if a register contains all assets worth more than $2,000, company vehicles are also counted for in a fixed asset register. Depending on the industry, Larger firms have up to three different types of asset registers that include their IT and digital assets. In this instance, the stored asset data will vary depending on the register, such as Data Found in an Asset Register, Data Found in an IT Asset Register, and Data Found in a Digital Asset Register.

Why is Accuracy Important?

Complete Information

When you are maintaining a fixed asset register, you have all the details about assets that are helpful in decision-making. You are aware of which assets need to be disposed of, asset status, how frequently it is used, and where it is located for audit trial purposes. When you know asset whereabouts, it is helpful for the audit team to verify assets physically. Complete information about assets provides you with necessary information on the asset’s average life, utilization of the asset, and asset expenses. These sorts of information help in setting future goals.

Compliance

If your reports are not accurate, then your company may end up paying the penalty for a rule violation. No organization wants these problems, right? For maintaining accuracy, IT asset registers can help by providing precise information. With the IT asset register, you can eliminate all the compliance-related issues as well. Take, for instance, your organization is using software & got expired recently. The auditor discovers it and penalizes the organization. But with this software, it will alert you in advance that software is about to expire, and you can renew it.

Depreciation

Depreciation of assets is crucial for an organization. Most organizations commit some errors in calculating depreciation. As several factors need to be considered, which you will not be able to do manually. However, when your association is equipped with a software system, you won’t need to stress over depreciation computation as the software comes with several inbuilt deprecation techniques. In this way, you can save a good amount of time.

Maintenance

Maintenance is one of the invisible pillars that play a vital role in business growth. For keeping assets well maintained and avoiding sudden asset breaks down, you must emphasize asset maintenance.

In the long run, you will see a significant saving in your bottom line. A maintenance strategy is a never-ending procedure for calibration management, increasing efficiency, and asset’s productive life, safety, and reliability.