With finance departments and CEOs or CFOs being held personally accountable under the ever-stringent requirements of Sarbanes-Oxley (Sarbox) in particular, the need for an asset tracking system has never been greater for US companies or overseas operations that are subsidiaries of a US listed company.Penalties built into Sarbox are severe for non-compliance, false declarations and other violations.Failures in fixed asset accounting can easily contribute to potential violations of Sarbox, under/overestimating the value of fixed assets or the incorrect application of depreciation rules.
For many US accounting departments, inventory management software consists of the good ole’ spreadsheet.Many businesses large and small use spreadsheets to calculate balance sheets, profit and loss accounts and cash books.In all these tasks it’s true that the spreadsheet can be a very useful tool in simplifying the computation process and production of the results.At the level of accounting complexity required in today’s business environment however, spreadsheets can quickly become complex and difficult to verify.
These issues can be effectively addressed with a specialist fixed asset tracking system that ideally incorporates barcode or RFID technologies to speed up physical audits, leaving finance with more time to focus on other equally important tasks. It will also establish asset values and produce accurate depreciation and amortization calculations in accordance with relevant tax and accounting rules. Flexible though the spreadsheet might be, it can’t do all that! Organizations that don’t invest in inventory management software constantly struggle to address a variety of issues surrounding the accountability and traceability of their asset base as well as establishing asset values and produce accurate depreciation and amortization calculations in accordance with relevant tax and accounting rules.
A spreadsheet is also hardly the most up to date sarbox compliance software package available and aside from the essential task of keeping your CEO out of jail, having an accurate asset register can have multiple effects on the company’s finances through the very tangible cost savings involved in reducing insurance premiums, property taxes and tackling neglected depreciation. These areas cannot be effectively addressed without a specialist fixed asset tracking system that ideally incorporates barcode or RFID technologies to speed up your physical audits, leaving the finance team with more time to focus on other more important tasks.