Fixed Asset Management

In the current economic climate, companies are actively looking at ways of consolidating their financial positions in order to ride out the economic downturn. One of the strategies that organizations are adopting post the rapid growth of the past five years, where their assets have multiplied unchecked, is a move to more accurate and effective asset management. Companies cannot operate effectively without extensive information about the technical and financial attributes of their assets. From a purely operational standpoint, having an accurate asset register report and CAD drawings that monitor the asset location, value and condition of the assets, offers many important benefits to an organization.

 

In the past 6 months many organizations in the UAE and worldwide have experienced change in their business which they have not been able to manage in the most efficient way. As a result, there is confusion in the actual accounting and the ledger is at best 'foggy'. To grow or indeed shrink your business you need to be able to manage change strategically.

 

Responsible asset management has many short and long term benefits to an organization. For example, correct asset management provides more accurate financial forecasting capabilities, which in turn, provides the management and shareholders a more realistic overview of the true value of the enterprise. This creates more responsible corporate governance and can increase investor faith. In the case of a refurbishment, it can reduce unnecessary purchases of furniture and equipment, and provide a monitoring role for insurance valuations and location purposes.

 

An automated fixed asset management system can also help streamline

workflow processes. Many companies keep multiple asset logs, depending upon the type of asset and the division of the business that is tracking it, such as accounting, IT or maintenance. Without a consolidated asset management system, these asset registers end up having conflicting and often contradictory information. A unified asset management system offers a more streamlined approach - one asset register - that provides customizable/user-defined dashboards that show each user and department the information and reporting options they need. It also helps reduce inconsistencies and wasted staff time that often causes businesses to run lean.

 

Such systems also allow for advanced forecasting and budgeting. Simply rolling over depreciation year-to-year is a blunt instrument and it can give management only a very rough summary of potential data with no allowance for other changes. When using an automated asset management system, financial directors can produce much more accurate forecasts that can take into account variables such as asset disposals, planned investments and the effects of specific actions on financials and future tax liabilities.

 

Another benefit of having an accurate asset register is the ability to quickly determine asset losses for insurance claims in the case of disaster, while also enabling the company to track and monitor the location and determine the condition of potentially affected items that need to be re-evaluated or disposed of. Incorrect or non-specific asset registers can result in painstakingly long hours

spent reconstructing and re-auditing asset bases at a time when the business' resources need to be focused on recovery. A study has revealed that on average, physical assessment reveals only 40% of assets are well described on the register and can be easily found; a further 40-50% probably exist but are so poorly described it is impossible to prove and the remaining 10-20% are well described but cannot be found, indicating they no longer exist.

 

This means that, on average, by basing insurance requests on the asset register, organizations could be over insuring by upwards of 20% - a significant cost that any financial director would be keen to reclaim. Financial managers often find themselves mired in a combination of spreadsheets and programs, but newer technologies have greatly improved asset management, providing not only proper compliance, but also instant reporting and analysis and automated depreciation calculations.

 

The most efficient practice for data validation is an independently conducted wall-to-wall physical inventory and reconciliation of all fixed assets. Schiavello Fixed Asset Management uses technology, such as the mapping of fixed assets through integration with RFID and CAD, enabling minimal disruption to your business.

 

This process is performed by scanning a bar code on a Fixed Asset ID Tag that has been affixed to the asset. A register of the assets will then be constructed in the form of a report. This report can be presented in many different forms depending on the client's requirements. The asset register is maintained to ensure the information is consistently up to date and valid. This comprehensive approach establishes the foundation baseline for business process improvements as well as the management of fixed assets on a life cycle basis.

 

The costs to undertake a full physical audit on assets are minimal compared to assets that could be worth millions. Combine this one off event with sound processes for keeping the register up to date and an organization can reduce its insurance premiums and ensure any claims are rapidly processed. Can organizations really afford not to take asset value seriously?

 

Due Diligence Reporting

 

Schiavello recognizes the complexities and pit falls of leasing office space in the Gulf region. Too often we find our clients have committed to office space without a transparent understanding of the suitability and the costs of the accommodation they have leased. As part of our commitment to our clients, prior to the signing of a lease, we work with our client and their chosen real estate vendors to carry out a pre-lease due diligence review of the premises on offer. This provides the client with the opportunity

to proceed with a full understanding of the commitment that they are about to undertake. It is through working as business partners with our clients that we are constantly looking to ensure that the company continues to operate effectively.

back