5 Ways Asset Labels Prevent Theft
Keeping track of assets can be somewhat of a challenge, particularly if you belong to a large corporation that has lots of them. They may be used by various departments, they can range from good to poor condition, and they can even have differing depreciation schedules. The important thing to realize is that utilizing asset labels is a fixed asset management method that works. The premise behind the labels is that they are easily attached to any asset and then recorded in a software program for as long as the company wants to keep the asset. From a financial accounting perspective, asset labels not only track fixed assets, they also prevent theft and provide valuable information for the company.
1. Identify Current Assets
When an organization experiences growth, there are frequently growing pains that accompany it. If a company is big enough, the executives and other managing bodies may not have a good or measurable way of determining exactly how much money they have sitting in fixed assets. It is the fiduciary responsibility of the executives and management teams to monitor and track these items so they can be used, repaired, and depreciated appropriately. In short, asset tags allow these managing groups to identify current assets easily and they prevent employees or vendors from taking off with them as well.
2. Identify if Needs to Purchase More Assets Exist
When a department submits a requisition to purchase more property, plant, or equipment items, a query can be made to determine how much like assets are already in the company’s possession. Rather than just allowing each department to make purchases that could reduce the working capital that the company has available, an asset management system would help in determining if needs really exist to purchase more assets. There may be similar equipment that has been assigned to a different department that is not being utilized. Asset management systems, including labels, enable financial accounting personnel to determine if the need to purchase more assets exists, or if one department can use the equipment that has been assigned to another department instead.
3. Helps You Assign a Physical Location to Store Assets
When a piece of property, plant or equipment is labeled with an asset tag, there is a lot of information that you or I could enter into a software program about that particular item: its description, its purchase price and date, its depreciation schedule, and yes, even its assigned storage location. Asset labels prevent theft because they help you assign each item a physical location. The company can adopt rules and regulations that mandate assets to be stored in certain locations within a department. If the items end up missing from the department that they have been assigned to, an investigation can begin at a departmental level. Theft can be deterred if each department keeps careful track of the assets that they utilize and store.
4. Advocates Departmental Responsibility
When companies start utilizing tags to manage their inventory of fixed assets, individual departments become responsible for maintaining it and keeping it secure. It’s not only a good way for management and executive personnel to know precisely how much cash the company has tied up in property, plant, and equipment, it also lets them know who is responsible for its use and storage. Asset tags advocate departmental responsibility because they are assigned with the task of storing and keeping track of the items they use.
5. Makes Spot Checks and Reporting Easy
From an asset management perspective, tagging property, plant, and equipment is a simple system that is as effective as it is easy to implement. Some organizations are required to participate in regulatory audits, and everything from accounts receivable items to fixed assets can fall under the auditor’s scrutiny. A system where asset tags are used improves the ease at which asset reports are generated. It helps everyone from departmental staff to outside auditors to identify where the assets are located so they can go find them and determine if they are being depreciated, used, and maintained properly. Spot checks and reporting is simplified when asset tags are used.
If you or I were to start an asset label program in our organization, we would first decide on what kind of sticker to use. Many come with a series of unique numbers so the item being affixed with the sticker is assigned a unique identifying tag and it can be tracked. In addition to a unique tracking number many asset tags also have barcodes on them, making them a good choice if you have handheld equipment to scan the items into your asset management software system. Once you’re up and running, asset management and theft prevention is a reality.
Asset Tags: A Popular Asset Management Approach
Asset tags may be the most popular approach to asset management, but it really shouldn’t be too surprising to see why. Organizations that are medium to large in size face a significant challenge to keep track of the condition, the location, the quantity, the maintenance needs, and the depreciation schedule of their fixed assets. Tags that contain a serial number simplify this important financial accounting process, and tags that have barcodes can make the process even better. The person managing the assets can conduct inventory by using a handheld device to scan all the fixed assets that are in his or her area of responsibility. Once scanning is complete, reports can be generated easily.
Managing the fixed assets that are owned by a corporation is a tall order. In order to simplify the seemingly challenging task, you or I might consider using asset tags. The can help the departments that use them, along with executive and management teams, to quickly and easily identify which items might be coming due for maintenance and repairs, what the depreciation schedule is looking like, and where exactly they should be stored when not in use. In addition to managing the assets more effectively, theft is also deterred when asset tags are used.