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The Nightmare of Fixed Asset Management

Written by Cathy Hodgson, CFO of Datalogic Mobile, Inc. 

What keeps me up at night? Poorly managed or mis-managed fixed assets. As a financial executive, I have personally seen the impact it can have on an organization. Here are just a few examples of the issues that I’ve seen:

• Errors in depreciation
• Inaccurate gains and losses on fixed asset disposal
• Undervaluing or overvaluing of a company’s operations
• Inaccurate income tax returns
• Inaccurate property tax returns

It’s been my experience that developing a sound fixed assets policy and using a comprehensive fixed assets management system lessens many of these issues. It is essential that all of the company’s depreciation policies and procedures are documented, followed, and enforced consistently. Without proper internal controls, you cannot have accurate financial statements. In addition, you run the risk of a difficult and costly audit. Transparency is crucial and if it is hard for the auditors to verify the calculations, the audit will take longer and cost more. If a government agency audits you, it’s more difficult to refute assessments if you don’t have comprehensive and accurate records to defend your past practices. I can say from personal experience that you are much better off having an accurate asset tracking system, rather than going through an audit and wishing you had the system in place. Restating financial statements and filing amended tax returns can be an expensive and time-consuming task. Maintaining accurate and up-to-date fixed asset records also helps prepare your insurance portfolio. If there’s a claim, you can take advantage of the full coverage of your policy. Accurate records make all the difference in the payout of your claim. Poor fixed asset management causes a wide variety of errors. With all of these potential issues, the logical choice is a fixed asset management system to help you with minimize potential inaccuracies and risks. System ID has a recorded educational webinar on this subject: The Elements of Asset Tracking. You can watch it at any time. Datalogic Mobile is a world leader in the mobile computing industry. They offer a full range of rugged mobile computers ideal for warehousing, field mobility, and retail.