The Complexity of Fixed Asset Inventory and Potential Problems

Fixed asset inventory is a task of reconciling ledgers and actual assets one asset at a time. This is a very important task to detect omissions of applications from each field department and to ensure asset preservation and correct accounting disclosures. However, many companies perform this task visually or with pen and paper, which causes the following problems due to the complexity of the manual process. 

High workload and reduced accuracy of actual inspections

In a pen-and-paper inventory, the process is as follows: print out an Excel file - inspect each item one by one with pen and paper - write the results in the Excel file and send it to .... This is the process. The high workload can make it difficult to obtain cooperation from the field, and mistakes are constantly made while visually inspecting asset numbers and names one by one.

Internal control issues associated with lower management level

The high workload makes it difficult to conduct frequent inventory inspections, and there have been cases where a single asset has not been physically inspected for more than a year. In addition, there are cases in which the actual inventory inspection is not conducted at the location far from the head office, especially in foreign countries. Since inventory inspections are conducted for the purpose of asset preservation and accurate accounting disclosure, leaving such a situation unchecked may result in problems being pointed out in terms of internal control.

Inventory using barcodes has been attracting attention in recent years

In recent years, the use of terminals such as handheld terminals to perform actual inventory inspections using barcodes has been attracting attention. The following is an introduction to the "merits" and "challenges" of this method of operation.

Advantages of Barcode-based Inventory

Inventory can be performed more efficiently because the information that "this asset exists" is recorded simply by mechanically reading the barcode. In addition, since errors that tend to occur in manual operations are prevented, communication costs for rework correction and back-checking can be reduced.

Challenges in Introducing Barcode Inventory

Handy terminals are often introduced for actual inventory inspections using barcodes, but these terminals are often expensive, sometimes costing 100,000 yen or more per unit.
For example, if 100 divisions are to be equipped with handy terminals, a simple calculation shows that the cost would be 100,000 yen or more x 100 divisions = 10 million yen or more, making it difficult to explain the return on investment.
Here are some ideas for those who cannot afford a budget as large as that of a handy terminal...but would like to eliminate manual labor and improve efficiency through barcode-based inventory.

Can be introduced at low cost! What are the advantages of smart devices?

We recommend the use of smart devices to read barcodes in inventory. Inventory using smart devices has the following advantages.

Cost is up to 1/10 of a handheld terminal

Smart devices are becoming increasingly inexpensive, and if an inexpensive, highly functional smart device costing around 10,000 yen is used, the cost can be reduced to a maximum of 1/10th of the original cost (10,000 yen x 100 departments = 1,000,000 yen). Furthermore, if company cell phones already distributed can be used, the initial investment can be further reduced.

Reduce the time and effort required to learn how to operate the system

Handy terminals are rarely used by the general public, and user training is often costly. On the other hand, smartphones and tablets can be used with the same ease of operation as the applications that are used daily, minimizing training time and costs.

Functions not available with a handheld terminal can be utilized.

With a smartphone, it is easy to save the date and time the barcode was scanned as a trail of the actual inspection, or to add a note about the condition of the asset. In addition, functions not available with handheld terminals, such as uploading the latest asset images, can be utilized for asset management.

As described above, asset inventory can be streamlined using smart devices to achieve barcode inventory at low cost.

Selecting a Product that Supports Barcode Inventory

Finally, for those who want to consider implementing a barcode-based inventory method, here are some product selection points and recommendations.

The most important factor in product selection is to choose asset management software that can also perform inventory. The inventory management function of HUE Asset, asset management software for large companies, supports actual inventory inspections using terminals such as handy terminals and smart devices as a standard function. Customers currently using HUE Asset can download the software from Google Play and use it at no additional charge.

For examples of how HUE Asset improves asset management operations, please click here, Fixed Asset Management Case Studies HUE Asset is also available in the Fixed Asset Management Case Studies section of our website. If you are interested, please download and check them out.

Cases

Fixed Assets Management Case Studies

We introduce examples of fixed asset business improvement at major companies. Recommended for those who want to get an idea of business improvement and want to know about case studies of system updates.

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