When discussing someones upcoming physical asset inventory with them… “Angie, we are just going to take our outside fixed asset listing of all our capitalized assets from [insert: CPA firm, outside agency, head department, etc.] and use that to FIND and TAG our assets. We don’t need to do a Baseline because we already have a list.”
Really? I don’t like to be frank and when I am, I am very diplomatic. But honestly… the whole reason people come to me (or my other associates at Paragon Systems) is because they DON’T have a CLEAN list – or one they just adopted one. The whole point is to gather data, reconcile back to accounting records and GET a clean fixed asset list. Why? To continue to keep it clean so they know what they have and what they don’t. There are many benefits to a clean and successful inventory. Ok, getting off my soap box. . .
May I please share with you the reasons why you SHOULD NOT conduct a Dynamic inventory of your fixed assets if you don’t have a GOOD list — or one that hasn’t been yours?
- List Integrity – the whole reason that someone takes over (brings in-house) their assets is because their ‘outsourced/other’ list isn’t correct. Right? Right.
- Timing – it’s going to take a LOT of time and man-power to look for every needle in your very large haystack.
- Individual timing: instead of taking an average of 3 – 5 minutes tagging and collecting data for one asset, it will take about 30 – 60 minutes.
- Overall project timing: months and months and months of tagging and data collection. Will you ever really finish?
- Reconciliation – it is always easier and more efficient to conduct your reconciliation off-line back at your desk than on the fly in the field. Once you’ve collected your data during a baseline inventory, you can always perform a comparison against your data in Excel. This assists you with filling two (2) buckets: matched assets and unmatched assets. You will be able to determine which assets you will need to investigate on (the not matched) much quicker AFTER collecting your data (via Baseline).
Dynamic – GREAT option for those of you with a fixed asset list. Upload your data into an automated hand-held bar code scanner (preferred method) and start your inventory. Update any / all descriptive fields of information while you are in the field. End result – validating your data in the field.
Baseline – You have no accurate list (or a list at all) or a highly imperfect one and you start tagging your assets to capture all the data about the asset. Although it might seem obvious, make sure that you pre-define what information you will be collecting on your assets before you go willy nilly. End result – building your list.
Bringing my point home. Why spend days, months or even years hunting for a needle that may not even exist at the end of the day? If you have a list you DON’T trust (or one at all), go Baseline! Who wants to start over?