Information on the asset register

While IT is typically good at maintaining its own inventory register to determine system maintenance and support, such information rarely finds its way to the finance team. Indeed, even if IT does provide information on individual asset disposal, having consolidated these assets, finance has no way of recording the information in the fixed asset register.

The issue is even more complex in manufacturing environments where the highly complex production line is typically under continuous refurbishment. Even if finance is informed of changes, there is not enough information on the asset register to identify which items should be removed.

And, of course, most finance teams regard the issue as self-resolving: the majority of the assets no longer actually in use have already been depreciated down to zero, so there is no impact on corporate value. But this approach may actually increase business risk.

With poor, inconsistent asset information how can any company feel confident in its business continuity planning and investment – from insurance to disaster recovery? Any inconsistency in the asset register or inability to reconcile the asset value in finance with multiple inventory records will raise significant doubt for insurance companies, delaying payment at best. At worst an organization could lose any chance of insurance payment, even face charges of claiming for items that do not exist.

And while very, very few organizations opt to duplicate their entire operation in the event of a disaster, many have set up relationships with suppliers to re-supply previously purchased equipment to the hot site within a specific timescale. Yet with poor record keeping, how can any organization feel confident that the suppliers will provide the right equipment? They only know what they have sold; not which of the assets are still in use, and which have been replaced.

Failing to record actual assets in use can only result in organizations paying a premium for equipment that is simply not required in the event of a disaster.