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Fixed Asset Tracking

Fixed asset tracking can make the entire fixed asset process very easy and accurate, or if done wrong, very difficult and inaccurate. Tracking is the hardest part of the process, but if set up and maintained properly, can be accomplished without too much trouble.

All assets over a certain dollar value should be recorded and tracked. The dollar value will depend on your management, the size of your company, and the local taxing authority requirements.

To begin, a policy should be created to be used as a guideline for how to handle current and future fixed assets. Next, a tracking process needs to be established, implemented and followed.

In order to track assets and record all the information we may need in relation to the assets, we should record and track the following:

  • Asset description
  • Cost of the asset, which includes freight
  • Where and when the asset was purchased
  • An asset identifier number
  • A picture of the asset
  • Location where the asset is to be installed
  • When the asset will put into service
  • When the asset has been retired 
  • Depreciation method and years to depreciate
A notebook or electronic folder of information needs to be kept for fixed asset tracking. When a fixed asset is purchased, all the relevant information of the asset should be recorded. A very good thing to do is to take digital pictures of the equipment, so it can easily be identified. This is especially helpful if the equipment is more than one piece. Often, as the years go by, a part of one asset may become a part of another asset. A picture will help in keeping track of these changes.

The engineering or maintenance departments should help the fixed asset accounting group by providing information when assets are to be disposed of, retired, purchased or moved. Often in large manufacturing plants assets are very difficult to keep track of unless accounting gets help from the group that is responsible for asset moves,etc.

A fixed asset tag should be affixed to the asset when it is purchased. This identifier number should be recorded with the asset information. The tag will help identify the asset later, and the asset will be tracked by this number.

A periodic fixed asset inventory should be taken to determine if any assets have been moved, whether the status of an asset has changed, etc. Depending on the business location, fixed assets may be taxed as personal property and an accurate accounting is very desirable.




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