Ghost asset is definitely one of the unexplained transgressions happening in any company. Managers do not know when it came about and how it occurs. Nonetheless, they can wreak havoc on the company’s finances.
To prevent having ghost assets in your ledger, having a trusted asset management system might be of help. If you are not convinced with the idea, these advantages might change your mind:
- You would know where these assets are
The key advantage of having an asset tracking system is that you can closely monitor where your assets are. Most businesses today are still relying on honor system and manual recording. This kind of asset tracking is lax and inaccurate and can lead to missing assets, gross negligence on monitoring the condition of these items. Before you knew it, it is too late.
A tracking system can eliminate such errors since electronic bar codes will be assigned to each item, monitoring its condition. Ideally, the tracking system is paired with a face recognition attendance system that help identify who is responsible for handling these assets.
- Minimize paper trail errors
Paper records concerning assets is subject in to inaccuracy and changes, especially if not closely monitored. Unfortunately, there are still companies who are using this kind of monitoring system. Errors in recording can be a nightmare of any accountant and auditor who is doing auditing of these assets. With a trusted tracking system, human errors in asset records can be minimized, if not eliminated. Also, your auditing team can quickly go through the records and make accurate reports on the condition of your business assets. They can also make clear suggestions on what to improve and what to add, in terms of purchasing items.
- Monitor asset depreciation
Asset depreciation is the worst thing that can happen to your business assets, next to missing assets. Depreciation of assets refers to the reduction of the recorded asset cost matching the revenue that the asset generates. Assets, like equipment, have an intended lifespan and is subject to depreciation. Once it reached its useful life, you may need to get a replacement.
Correct calculation of asset depreciation should be recorded correctly, this would include original cost of the asset, the depreciation method used, and the salvaged value. Proper recording can save you from paying unnecessary taxes for that particular asset or lessen the insurance fees. Your tracking management system will send an alert or notice if an asset is nearing its useful life, so you can either do some repair or make a decision to buy a new one.
- Promotes inventory continuity
Inventory and auditing is definitely a tedious task that a company undertakes, but a necessary one at that. But what makes this process overwhelming is the misrecordings and lack of continuity by the personnel in charge, especially if it is being done by paper. An asset management system will ensure the continuity of asset inventory across all departments, as well as correct records and details.