Many businesses are already aware of how important a fixed asset tracking solution is for the profitability and stability of their operations. When maintained properly, a fixed asset ledger can reduce many headaches across a company, such as improving budgeting and saving the company tens of thousands of dollars a year. But unfortunately, many of these same businesses don’t give enough attention to tracking and maintaining accurate fixed asset records, and this leads to a problem known as ghost assets.
Ghost assets are recorded as fixed assets in your business ledger, but in reality, can’t be accounted for since they no longer physically (or digitally) exist. This discrepancy happens because, over the years, you purchase items for your business such as machinery, furniture, and equipment, but these can often disappear or depreciate for various reasons. For example, an employee may steal a company computer which is still counted as fixed in your ledger, or a company car no one has used in a year might be sitting parked somewhere on your property.
Missing, stolen, or unaccounted for assets are a proven bane to companies across the world. In fact, Gartner, Inc. estimates that up to 30% of organizations don’t know what items they own, where they are, or who is using them. Additionally, around 70% of organizations have at least a 30% discrepancy between reported fixed inventory and what’s actually available to them. These statistics mean you could be over-paying taxes and insurance on items you don’t actually own, and they hold unfavorable implications about your company’s efficiency and long-term operations.
This paper will help you better understand the dangers of ghost assets to your business and what you risk when you don’t maintain and audit your fixed asset ledger. You’ll also learn how to:
- Implement best practices and standards in your fixed asset management solution
- Detect and avoid ghost assets
- Create the most accurate overview of your company’s records and finances as possible
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