The Right Way to Audit Your Fixed Asset Systems
Fixed asset systems audits happen on a regular basis to help you update your asset records and make sure your processes are working as expected and all your data is accurate.
Audits can either be internal or external. The ones we’re talking about today are internal audits. They aren’t as formal as external audits, which means hopefully they come with less stress. If the word audit makes you break out into a cold sweat, you can look at it instead as a regular system review to make sure everything is working as expected.
If you already have well-defined fixed asset procedures in place, then your audits will go much more smoothly.
Prepare For Your Audits Throughout The Year
Audits go most smoothly when you get information for them throughout the year. That means having procedures your team completes regularly. The more you record and track asset data as events happen, the easier it’ll be for your company’s auditor to review and act if necessary.
The best way to prepare for audits is to get everyone on board. Outline asset tracking procedures that everyone does, not just some people.
Another great way to almost automate your audit is to rely on fixed asset tracking software. Using asset management software means your company is tracking everything related to your fixed assets in real-time. As your database gets used, it stores records of asset usage, maintenance, and other important information about life cycle management.
During your audits, you can spot-check random asset records, or search by specific criteria. Assuming your team has properly filled out all of the information fields, your auditors will have an easy time finding what they need to do their jobs. With the right kind of system, they could even assign out auditing tasks to spread the workload around the organization.
Plan Your Approach Ahead of Time
Planning your audit before it happens will make audit day much easier to manage. Perhaps the most important aspect you need to determine before audit day is why you’re conducting it in the first place. Are you working to make sure your budget is being used in the best way possible? Are you looking for more places to streamline your company’s workflow? Are you trying to ensure you have up-to-date data on your assets? Whatever goal you hope to accomplish, define it ahead of time, and make it the focus of the audit.
Other important questions you need to define ahead of time are:
- Who will perform the audit?
- What information will they be reviewing?
- What steps will you take if you find that some information isn’t accurate?
- How will they access fixed asset information?
Involve the Financial Department
Trying to run an audit of your fixed assets without involving the financial department is asking for disaster. Your financial department is heavily involved when it comes to the money side of your assets. They’ll know exactly how much you’ve spent on each asset, how it depreciates, and how much longer you can expect it to last before you need to replace it.
Your financial department will likely be maintaining asset balance sheets. These balance sheets report on your assets, liabilities, and equity during specific periods of time. They’ll also track expected depreciation vs. actual depreciation amounts.
Putting all of these steps in place before you perform your fixed asset systems audit will ensure that audit day goes as smoothly as possible. Audits don’t have to cause your team huge amounts of stress anymore. When you know they’re coming on a regular basis, you can put practices into place to simplify the review when it happens.