How to implement and maintain your
fixed assets and capitalized equipment inventory

Maintaining an accurate inventory of fixed assets and capitalized equipment is critical to organizations of all sizes. Organizations realize significant savings and benefits through accurate inventories. Facilities and IT departments benefit through increase control and accountability of assets, as well as savings in budgets from reallocating existing assets, and minimizing shrinkage. Finance departments benefit through tax and insurance savings, as well as compliance with grant and regulatory requirements.

The following are steps to assist your organization in maintaining its investment in fixed assets and capitalized equipment

1. Obtain executive commitment
The first step in asset inventory management is to identify two critical roles, a program sponsor and a program champion. Executive level commitment is essential for the ongoing success of an asset inventory management program. The project sponsor provides the executive level commitment to the program. For most organizations, the equivalent of a “C” level executive is appropriate. Often the CFO will be the project sponsor. The project champion is responsible for implementing and maintaining the program strategy.

Executive level support will be facilitated by presenting a good business case for the importance of asset management. Calculating the return on investment (ROI) for a program will support the business case. An ROI calculator may be found at http://www.AssetServices.com/ROI.asp

2. Develop strategy for maintaining inventory
The following is a list of items that should be considered in developing your strategy.

a. Physical inventory – How will the baseline inventory be established?

b. Process for updating the asset ledger – Who is responsible for reporting additions, moves, and liquidations to the inventory? How will the changes be communicated to the asset management team (a sample inventory change form may be found at http://www.AssetServices.com/resources.asp)?

c. Measuring – How will the inventory accuracy be measured and maintained. Periodic physical inventories are the best way to measure the accuracy of the inventory. Larger organizations (over 20,000 assets) may also benefit by performing periodic physical audits of assets.

d. Accountability and remediation – Who is responsible for, and what are the remediation strategies for not meeting appropriate inventory measurements.

3. Perform physical inventory

Very small organizations may be able to employ a “paper and pen” method for performing the physical inventory. The “Paper and Pen” method involves printing out a list of assets from the asset ledger, and searching for each asset on the list. The “Paper and Pen” method may be a cost effective approach for small organizations with a single one or two story building. However, multiple locations or floors limit the practicality and effectiveness of the “Paper and Pen” method.

A barcode approach to an inventory is recommended for larger organizations. Although the physical inventory may be performed using internal resources, consider evaluating a company that specializes in providing asset management solutions. Advantages of outsourcing your physical inventory include leveraging the expertise and knowledge of the specialists in companies that specialize in asset management solutions. Outsourcing also allows you to let your employees focus on their existing responsibilities.

4. Implement fixed asset inventory management solution!