How to Perform Fixed Asset Verification
- 1. How to Perform Fixed Asset Verification? Changing circumstances and the sudden advancement in innovation, have led the world to a life full of comfort, which at any given point includes taking charge of all your assets with the click of a button. Asset Management Automated Software allows users to easily track, manage, verify, and pull reports on their assets, among other things. In this blog, we will define Fixed Asset Verification and how it benefits an organisation. So, let's get started. What do we mean by Fixed Assets? Fixed Assets are long-lived assets or property. We do not easily tend to sell them off as they are to be used for the long term. Fixed Assets are generally the ones which are used for manufacturing (the product), in a manufacturing industry. For example- The transportation used to deliver the final products in a manufacturing industry, if owned by them would be their Fixed Assets, that they bought to use for a long period of time. The depreciation that is induced to the Assets is to be noted in the Asset Management Software which helps to keep track of all the assets and then to manage them so that the organization can benefit from it. If one can identify all its Fixed Assets the next step that comes is to make a plan that deals with the management and tracking of all those assets. Which is possible with the help of Automated Asset Management Software like Asset Infinity.
- 2. Asset Verification Asset Verification is the process of verifying the assets. There are two methods for verifying the assets: ● Aided Audit: A third party can come and verify your assets to see if they are present or not. (As well as how they are). ● Self-Audit: A confirmation form is provided to the asset owner, who must fill it out and verify that he has the asset with him. This Fixed Asset Verification process also assists the organisation in removing all Ghost Assets from the system. It was not possible with Excel sheets and all of the rudimentary practices. Ghost Assets: Assets that, according to the books, the organisation owns but are not physically present. This is simply misinformation, as you do not know whether your Asset exists or not. This can be controlled with Asset Verification because you will know if the asset is present or not. Process of fixed asset verification A successful fixed asset verification is an important part of running any business. It ensures that all physical assets are precisely accounted for and up to date, allowing you to make educated choices about the future of your company. To begin, it is determined by the method of Fixed Asset Verification used by your organisation (self or aided verification). If the organisation selects Aided Verification, an advisor will visit the location where the assets are located. Updating the Fixed Asset Register The first step is to keep the Asset Register up to date by adding any assets that are missing from the data. The data must be based on a real-time report in order for the Assets to be matched against data that is true to its nature. Differentiate Verifiable/non-verifiable Assets: The advisor's next step will be to differentiate the assets based on their ability to be verified. Some assets, such as furniture and fixtures, can be verified, while others, such as goodwill, cannot. Physical Verification He then verifies all of the assets towards the data resent in the Asset Register or the one provided to him. The advisor would also conduct a physical examination of all assets to determine their current condition.
- 3. Finding the errors The next step is to identify any discrepancies, such as lost assets or assets that appear twice in the data, or any other issue. If there are any Ghost Assets, he is supposed to remove them all and make the data error-free. Reporting The person will suggest any necessary changes for repairs, as well as note any additional recommendations and maintenance plans, if any. While the Physical Validation Process for Fixed Assets may be a time-consuming activity for high asset-based companies for the first time, it may yield tremendous results in terms of controlled surroundings and efficient resource allocation. The Advantages of Fixed Asset Verification: Fixed asset verification entails an examination of related records as well as physical verification. Normally, the auditor should verify the records using documentary evidence and an evaluation of internal controls. Management is primarily responsible for the physical verification of fixed assets. ● Compliance and accuracy ● There is no fraud ● Financial Stability was put at risk. ● Appropriate use of funds Conclusion The use of Asset Management Software allows for physical asset verification. Asset Verification enables an organisation to obtain accurate information about all of its assets. Mobile applications can also be used for asset verification. Normally, the auditor should verify the records using documentary evidence and an evaluation of internal controls. Contacting Asset Infinity will assist you in quickly verifying all of your Fixed Assets and uncovering all of the positive possibilities that it can bring.