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The importance of asset auditing to an organisation cannot be underestimated. It is a crucial process for ensuring the highest standards of accuracy and compliance in the management of a company’s valuable equipment or machinery, helping to bring about more streamlined work processes and more informed decisions.
Every organisation that depends on physical assets for its day-to-day operations needs to take seriously its long-term arrangements for auditing those assets. By ‘auditing’, we are referring to a process by which an organisation physically checks that the assets in its records exist and such key aspects of the assets as their location, status, condition and whether those items are still fit for purpose.
After all, your business or organisation won’t be able to function to the best of its ability if its physical assets cannot even be found and utilised. It is therefore crucial to conduct asset stocktake from time to time to make sure those assets are still physically available, and that the information you hold on those assets is accurate.
The different types of asset audit
There are two main types of audits that exist, internal audits and external audits – both of which can play key roles in maintaining transparency, accuracy and accountability in your organisation.
Internal audit
This type of audit examines how effective your organisation’s internal controls are. Having internal audits carried out periodically can greatly help optimise your firm’s asset management. It puts you in control. Knowing what assets you have where and what condition they’re in means you can also budget more effectively.
External audit
This type of audit is one that an external entity carries out – for example, to ensure your organisation is complying with important rules and regulations in its industry. Both businesses and governments therefore benefit from the insights into an organisation’s asset management that an external audit can provide.
What is the objective of asset auditing?
An asset audit, whether internal or external, is conducted with the objective of checking and assessing the adequacy and effectiveness of a given organisation’s asset management controls.
Any company should be vigilant about keeping its asset records accurate, not least because any failure in this regard will impact on how the business functions. Staff won’t want to have the situation of trying to track down an asset that it turns out no longer exists, and assets that have gone missing will cost money to replace – thereby impacting the firm’s bottom line.
Asset auditing, then, helps ensure you’re doing everything possible within your organisation to manage your assets responsibly, accurately, and transparently.
What happens in the asset audit process?
Presuming your organisation already has a recorded list of its assets, the audit process will involve those assets being physically cross-checked to ensure they exist, and that your asset record is therefore accurate.
You shouldn’t only be recording your assets’ existence, however, but also such aspects as the condition of each asset, its location, and even the stage of its lifecycle.
While asset audits have historically been conducted manually, this can be a very lengthy process for today’s time-pressed businesses.
Fortunately, today, asset auditing doesn’t have to take up so much of your employees’ time and energy. That’s because asset management software, such as the Vision platform of Assets & Compliance Managed Services UK, can remove much of the labour from the process by giving you quick and easy access to live data about each and every asset in your organisation’s possession.
What are the benefits of asset auditing?
Routinely auditing your assets can bring the following advantages to your organisation:
Depreciation management
It is inevitable that the value of a particular asset will go down over time, a process known as depreciation. After all, a piece of equipment that represented the very latest and highest standards of technology and sophistication when first purchased five years ago will not do so today.
Asset auditing will help your organisation keep track of the value of its assets over time, accounting for the fact that different assets have different rates of appreciation. This, in turn, will allow your staff to make informed decisions with regard to the maintenance of a given asset over time, and when it may be the most appropriate moment to replace the asset altogether.
Removing assets that are no longer available
Assets that are listed in asset registers but not physically available, are often referred to as ‘ghost assets’. You will not wish to have your employees making decisions about assets – including on maintenance, repair or replacement – when some of those assets may not even be there for your organisation to use.
A comprehensive asset audit from time to time will therefore greatly help ensure that any ‘ghost assets’ are removed from your records, which will be instrumental in keeping your list of assets accurate and up-to-date.
Regulatory compliance
If an external audit is carried out and it is discovered that your organisation’s assets breach relevant industry regulations – for example, if you have equipment or software that is not permitted for use in your sector – your company could be faced with heavy penalties.
Your organisation’s own internal auditing, then, can be critical to ensuring any such compliance issues are spotted and addressed before the business is placed at avoidable risk.
What features should asset management software include?
The most suitable asset management platform for making asset auditing easier is likely to incorporate a wide range of features. Such software should make it a straightforward process to create a fixed asset register in the first place, but should also enable you to create or replicate audit templates for any or all of your assets.
The asset management solutions that you consider, ought to be flexible and customisable, so that you can rapidly adapt to what may be changing requirements. Your chosen platform should also make it a simple process to record, track, trace and monitor your firm’s assets – at site level or remotely, and across multiple buildings if required.
With the right asset management platform, your personnel shouldn’t be left in any doubt that the assets in your register actually exist and should also be able to quickly check the current condition and status of your assets. Our Vision solution, for instance, uses radio-frequency identification (RFiD) technology for its Vision-tags, to ensure the stress-free tagging of physical assets. Finally, it’ll also help if the software you pick is cloud-based, given the high risk with paper or spreadsheet-based systems of asset records being lost or corrupted.
Finally, have all your information such as maintenance schedules, guides, service plans, photos, drawings, etc., uploaded to each individual asset is both efficient and extremely useful.
Contact us today for more information about the Vision software system from Assets & Compliance Managed Services UK. We’re confident that once you’ve sampled our platform for yourself, you won’t feel the need to seek out any alternative asset management software for the optimisation of your asset audits.