An audit of fixed assets is something every organization must conduct on a routine basis. This exercise is part of demonstrating sound accounting practices. An audit of fixed assets takes a look at such items as IT equipment, tools and machinery, office space, furniture, company vehicles and more, records them and computes their respective values. Those values are then reporting for compliance purposes. Non-compliance can result in fines, loss of grant funds and other serious ramifications, so it behooves any organization not to resort to guesswork during an audit of fixed assets.
First, a review: What are fixed assets? They’re items that allow you to conduct your business and which aren’t easily converted into cash. Most of those assets will depreciate. Companies have to report that depreciation using either a straight-line or accelerated depreciation method. Straight-line depreciation calculates a fixed depreciation amount to the asset each year it’s in use, while accelerated depreciation requires the owner to incur the lion’s share of the depreciation during the early years of ownership; in other words, the owner assumes the brunt of the depreciation early in the item’s lifespan. During the auditing process, organizations must record such details as the initial purchase price of each fixed asset, along with taxes that were incurred and any fees paid to get the asset up and running.
If you don’t carefully log your asset data, you’ll end up with gaps, errors and other issues that throw off your recordkeeping, cost you valuable time and money, and potentially jeopardize your ability to acquire additional fixed assets. If you’re new to the world of fixed assets, you might assume that an audit of fixed assets is a complex process. It’s certainly a foreign language if you’ve never ventured there before. The bottom line is that you’re busy, as are your employees, and your fixed assets are just too important to subject to potential human error. For accuracy purposes and peace of mind, your best bet is to outsource the auditing function to technology. You’ll have the assurance that you’re paying as much as you should but no more than you should in taxes.
Additionally, you won’t find months down the line that you’ve been paying insurance on “ghost assets,” or assets that have long been lost and aren’t in your inventory anymore but weren’t reported as such due to lax recordkeeping. Ghost assets are akin to flushing your revenue down the toilet. A proper audit of fixed assets and a reliable and real-time asset tracking system can also help you get a handle on employee theft, which costs organizations thousands each year.
You want to make the most of the assets you have, maximizing their lifespan through regular and proper maintenance, accurate tracking and data reporting. With Asset Panda, you have an incredibly powerful, yet simple tool for conducting an audit of fixed assets from the palm of your hand. Its user-friendly interface is easy to navigate, and its features are completely customizable. Asset Panda’s free mobile apps sync with the cloud for real-time data delivery 24 hours a day. And you can add as many users as you want.
Get started with your free 14-day trial, curb waste and protect your bottom line. To learn more, go to www.assetpanda.com.