Inaccurate registers of fixed assets can cost governments dearly in higher taxes and insurance premiums as well as slowing down processes, says an asset audit software company.
Melbourne company Hardcat, which also has UK, US and African subsidiaries, uses a fixed asset management software application and handheld mobile technology – like barcode scanners – combined with training and project planning, to make audits up to five times faster and much more accurate.
Hardcat Managing Director Dan Drum said most organisations carried a discrepancy of 15 to 20 per cent in their fixed asset registers and this was poor business sense.
“Every accountant will tell you that this is all important business intelligence that has a direct positive impact on any organisation’s bottom line,” Mr Drum said.
“It not only results in an immediate write off, thereby reducing income taxes, property taxes and insurance premiums, as well as increased valuation of the organisation, it also secures data against the risk of future database degradation through the establishment of efficient asset audit processes.”
Mr Drum said maintaining an accurate asset register helped organisations retire end-of-life assets, add new assets, halt the purchase of unnecessary assets and manage and track existing assets more efficiently.
Hardcat’s government clients include the NSW Government and Victoria Police and both organisations have achieved time and money savings using the company’s platform agnostic software, which can import existing data from any financial, ERP or asset management tools and export it for reconciliation after the audit is complete.
The NSW Government’s shared IT services provider saved more than $100,000 in the first year by building an accurate asset register of IT hardware and components across its four data centres. The audit found assets omitted from the registry while also identifying assets that were on the register but were no longer in use, producing significant savings in annual hardware costs.
A new bar-coded asset register reduced the time taken for mandatory audits by approximately 70 per cent and streamlined new and replacement planning contracts with hardware vendors.
Another beneficiary of Hardcat’s asset audit services was Victoria Police, who faced the Herculean task of tagging and registering over 80,000 armoury items. Barcode scanners reduced the issue and return process by 90 per cent and the time taken to produce equipment use reports and conduct future audits were both reduced by 80 per cent.
Mr Drum argues that audits usually paid for themselves because they located lost assets, removed assets no longer in use from the register and embedded straightforward processes to maintain the register’s accuracy in the future.
“A verified, accurate asset register will facilitate better asset accountability while ensuring that an organisation’s good governance and regulatory compliance objectives are met,” he said.
“Our audits will identify assets that have been lost, stolen or are no longer useable but still appearing on the asset register and others that do not appear but are active within the organisation.”
He said Hardcat’s audit services could discover assets which the organisation is incorrectly managing, either operationally or financially, as well as other assets that weren’t being used but were still being depreciated on the books.
“When there are literally millions of dollars at stake, organisations really shouldn’t go it alone when it comes to conducting asset audits,” Mr Drum said.