Has your company hit some hard times? Or maybe you’re just bracing for the worst. Either way, the time to look for hidden cost-savings is now. In an article for AccountingWeb.com, Marcus Scholes points to a silver lining in the clouds of the current economic unrest. Changes that help you more effectively track asset management can save your company thousands of dollars. Even better: These changes can also help make Accounting’s job a little easier in the long run.

The place you want to look is your company’s asset management. According to Scholes, the multiple asset registers kept by most companies are prone to letting errors seep into your books.

Among the most common problems: Finance often keeps only general aggregate numbers for depreciation purposes. But the detailed info and updates that department managers are more likely to keep is where the real gold is.

For instance, it’s not uncommon for up to 20% of the assets listed in the register to be “ghost assets” — that is, items that have been trashed, broken, put out of service, etc.

Not getting that info to Accounting can unnecessarily bloat asset registers — and lead your company to pay more in taxes, insurance and other ongoing costs. It’s also a good sign that your company isn’t squeezing as much efficiency out of its processes as it probably can.

The fix

For most companies, “the register” is basically just a compendium of all the different spreadsheets individual departments use to track assets. Getting your company to use one standardized asset manager system will need a two-prong approach:

1. First, review each department’s asset list to make sure it’s up to date. You’ll also want to find out exactly which pieces of info (serial numbers, date purchased, etc.) are vital to department managers.

2. Second, once you have the info updated, put together a single, dynamic asset register that can serve multiple functions. For instance, see if IT can customize the register so that all the info is in there, but various departments can access only the sections they need. That gives you the security you need (only certain people can access specific info) and it makes the register useful to everyone who needs it.

Alternate plan: If you don’t want to have department managers actually update the info, make sure you have a specific procedure or form for them to use when it’s time to for updates. The easier and more routine you make the process, the more likely they are to follow it. And the more likely you are to get all the nearly-near-time info you need.

Tags: Asset Management, General Ledger