When is the last time your fixed asset list (FAL) was reconciled with the machinery and equipment on your production floor? How confident are you that your FAL is an accurate representation of the equipment under your roof? This simple oversight has a direct impact to your bottom line, because your property tax bill is based on that list.
So: it’s time to complete a fixed asset inventory. Where to start? Define the problem before deciding on the solution:
- Can you identify all your machinery and equipment, both on the floor and on your FAL? If not, who can?
- Are similar type fixed assets described in similar fashion on the FAL? (For example, a vibratory bowl and a hopper may refer to the same asset but were named differently by accounting and production.)
- When an asset’s disposition is changed, such as a disposal and transfer, how are its child assets given the same disposition?
- Will a review of the asset list with all knowledgeable personnel accomplish what you need done?
- How much time and effort do you (or can you) personally want to spend on this project?
Finally, the most important question: What do I want to accomplish with a fixed asset inventory?
Begin the process by locating two or three outside firms that provide asset inventory services, and request bids and referrals tailored to your specific industry and scope of work. Consider this cost against the time and effort your team will save conducting a potentially unfamiliar and daunting task – while still being responsible for their daily production.
Either way, you need to ensure you have one employee knowledgeable of your machinery and equipment committed specifically to this task, to work as a translator between the costs, dates, and descriptions on the FAL and what is actually present under your roof.
Whether you elect to complete the inventory with internal or third-party personnel, the project ought to be completed within one week. Any inventory project lasting over a week means one of two things: either not enough asset specialists were assigned to the project, or there was not enough time spent pre-planning the project.
Completing a successful inventory will take considerable time and effort, regardless of who is responsible. Plan ahead to be sure you and/or your staff can invest the necessary time, and you will accomplish precisely those goals you identified earlier.