While the periodic reconciliation of property records does allow the accounting staff to wear jeans to work for the day, the downside is the frustration of trying to match actual assets to their supporting property records. Here are a few hints for reducing the work:
- Increase the capitalization limit. A good option is to increase the cap limit, thereby excluding more purchases from being designated as fixed assets. In particular, try to set the cap limit above the price of desktop and (especially) laptop computers, which are exceptionally difficult to track.
- Don’t sweat the small stuff. Usually, 20% of the fixed assets comprise 80% of their total cost, so export the fixed asset register to an Excel spreadsheet, sort it by dollar value, and only count the most expensive items.
Please note that we haven’t begun to count anything, and yet the list of items to be counted is less than 10% of the original list! To continue…
- Assign responsibility for assets. When an asset is acquired, formally assign it to a department manager, and send each manager a quarterly notification of what assets are under their control. Even better, persuade the human resources manager to include “asset control” as a line item in the formal performance review.
- Conduct the audit. Conduct a reasonably detailed audit, and send a report to all department managers that lists all missing assets. Then wait for them to locate the assets for you