ACAS imposes control over £6 million of fixed assets with Asset4000 from Real Asset Management

With £6 million of fixed assets located across multiple offices and employee homes, strong asset management is critical for the Advisory, Conciliation and Arbitration Service (Acas). However, outdated spreadsheet-based processes led to questions over the accuracy of asset values and depreciation and created a significant administrative overhead, both at year-end and in updating asset information throughout the year.

The adoption of Asset4000 from Real Asset Management has enabled Acas to streamline asset management processes, driving down costs. Furthermore, it has enabled the organisation to achieve fixed asset compliance to Modified Historic Cost Accounting (MHCA), providing Acas with an accurate asset valuation for the National Audit Office.

Public Body

Founded in 1975, the Advisory, Conciliation and Arbitration Service (Acas) provides an independent and impartial service for organisations to prevent and resolve disputes and to build harmonious relationships at work through promoting good employment practice.

Acas is an NDPB, funded by the Department for Business, Enterprise and Regulatory Reform (BERR). It is governed by an independent Council, which enables the organisation to be impartial and confidential.

An independent study has revealed that Acas saves the UK economy £800 million through its combination of information, advice and training and by working with employers and employees to solve issues and improve performance.

The organisation has around 800 staff, based across 11 main regional centres with a head office in London. A number of staff operate from home. The combined values of the fixed assets within the asset register, including IT and telecoms equipment, is in excess of £6 million – by far the most significant part of the balance sheet.

Impose Control

However, Acas’ traditional spreadsheet-based asset recording was simply inadequate to cope with growing auditor demands for in depth information and accurate depreciation. Indeed, with 16,000 assets on the register, it was a time-consuming and cumbersome process to complete both year-end accounting and achieve the MHCA compliance required by central government organisations.

Under MHCA, certain fixed assets are reflected at current values. To achieve compliance, the organisation has to apply specific indices to each asset category as defined by the Office for National Statistics (ONS).

“Each year, Acas had to dedicate at least two staff for two days to manage reconciliation of the fixed asset base and apply the ONS indices,” David Regan, Acas Accountant ,explains: “Using a spreadsheet-based approach resulted in information inaccuracy, creating a lack of confidence in the asset valuation for the auditors – the National Audit Office.”

He continues, “Acas needed to allay the concerns of the auditors and impose greater control over the assets.”

MHCA Compliance

It was the requirement to address the issue of information accuracy and improved compliance with MHCA that made Acas decide to migrate from its spreadsheets to a fixed asset register. Having reviewed the market, the organisation opted for Asset4000 from Real Asset Management.

“Asset4000 met all of Acas’ requirements – from excellent calculations, including MHCA, to integration with the Sun Accounts General Ledger,” Regan says. “It was also the best value for money on the market.”

Real Asset Management oversaw the migration from spreadsheets to the Asset4000 database, including initial data preparation and data configuration, as well as ensuring efficient deployment to each of the regional offices.

“The adoption of a fixed asset register provided Acas with the opportunity to streamline processes and impose greater control throughout the asset lifecycle,” Regan comments. “It was therefore very important that the system was configured to support local data entry at each of the regional offices.”

RAM also provided training in Asset4000 to a number of Acas managers, which was then cascaded down to users across the regional offices.

Improved Information

With over 50 staff across Acas now regularly using Asset4000 to register new assets, the organisation is capturing a greater depth of information, including expanded asset description and location.

“The costings are far more accurate now,” says Regan. “Using Asset4000, Acas is able to apply the ONS indices to each individual asset, whereas before they were applied to categories. As a result, when an asset is disposed of, the organisation knows the exact carrying value of that specific asset, rather than a category-wide figure.”

This shift to individual asset depreciation has pleased the auditors, providing far greater confidence in the accuracy of the organisation’s overall fixed asset value.

In addition to recording furniture, IT and telecoms equipment, Acas also logs improvements to its leasehold buildings within Asset4000. Any projects costing in excess of £300,000, such as a major office reorganisation, are capitalised and entered into the system as a single asset – with relevant indices applied. “Capital projects can be accounted for in the same way, on the same system, as any other asset,” Regan confirms.

Asset Control Acas is also far more confident of its ability to keep track of assets across the organisation, from regional offices to home workers. “Asset4000 is so easy to use; when managers are issuing equipment to home workers, for example, they are now automatically logging that asset movement on the system,” he explains.

Local staff also have responsibility for purchasing all non IT equipment and, using Asset4000, have a cradle to grave view of the asset. When the asset is purchased, the staff automatically log it onto the fixed asset register – a move that has replaced the previous need to notify the central finance team each time a new asset was purchased. Similarly, the IT department now automatically updates the Asset4000 system with new acquisitions as part of the process.

“Enabling local data input of new asset information has achieved significant savings in time and resource,” Regan confirms.

In the near future, Acas plans to implement the link between Asset4000 and Sun Accounts to further streamline the asset management process. “By loading all fixed asset information directly into Sun from Asset4000, Acas will reduce processing time and reduce the administrative burden for regional offices.”

The organisation also undertakes a physical asset check each year to support the fixed asset audit. This includes verifying the location of each asset, using reports from Asset4000 on asset location to cross reference the physical check.

The reports are also used to reconcile purchases and disposals each month, and to support year-end accounting and deliver assurances to auditors on accurate asset value.

Clear benefits

Whilst Acas has achieved clear benefit from streamlining processes and delivering greater control and visibility through the asset life cycle, the main benefit derived from the implementation of Asset4000 has been the greater assurance on financial value for both auditors and the Acas central finance team.

“The time savings are also significant. One person can now handle MHCA compliance and year-end accounting within a couple of hours, which is a considerable benefit for a small finance team,” he says.

Regan concludes, “Fixed assets comprise a significant proportion of the Acas balance sheet, therefore good control is essential. The adoption of Asset4000 has provided us with far greater control over asset location and valuation. The general management of the whole fixed asset process is far better now than it was before.”

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