As the Marketing Manager at RAM, I have spoken with so many of our clients over recent months who made the decision to move away from spreadsheets in favour of a specialist asset register and time after time, many of the same business drivers for doing so have arisen.
I have shared below the top 10 reasons...
1. Government requirements – With increased scrutiny from the government, reacting to recent business reports and requests from investors, there are now higher standards of accountability, transparency and overall corporate behaviour. In addition to this, there is now a strict accounting requirement to comply with IFRS, Sarbanes-Oxley (SOX) and SORP for improved financial management and increased detailed reporting. Relying solely on spreadsheets, will achieve instable and poor results.
2. Inaccurate depreciation calculations – Manual entry onto spreadsheets will leave you prone to errors, as the information is entered by hand. Additionally, with more than one person managing and editing spreadsheet data, errors are even more likely. Finally, relying on one person’s knowledge solely brings its own risks; if they were to leave the knowledge would be lost.
3. Lack of Audit Trail and overall security – A specialist Fixed Asset Register will track and record every detail of every action made by any user, which is unachievable with spreadsheets. As there is a security username and password required, heads within the departments can ensure confidential information is only viewed by those who need to see it and safely hidden from those who don’t.
4. Inability to link ‘parent/child’ assets and conduct asset splits/batch disposals etc – The ability to link parent/child assets is crucial, so one can establish hierarchical relationships. For example, this association may be between a PC, being the ‘parent’ and software licence, the ‘child.’ The option to dispose of the ‘child’ asset will follow the transfer or disposal of the parent asset, keeping the relationship intact. Spreadsheets are unable to accommodate the parent/child asset relationships, making it difficult to track and manage these hierarchical dependencies.
5. Access to multi-currency, multi-lingual or multi-book capabilities – With many organisations operating in different countries multi-currency, multi-lingual and multi-book capabilities are most likely imperative to allow core asset information to be shared across any number of books, enabling compliance with local and group depreciation policies.
6. Historical reporting and forecasting requirements – Composing reports from spreadsheets can be a complicated and daunting process, as they have to be analysed individually and often using complex macros, which is time-wasting and often prone to errors. Using a specialist Asset Management system which incorporates standard and customised reporting and forecasting will ensure an intuitive method of extracting and analysing data quickly and accurately.
7. Lack of confidence in data integrity – You cannot control your data fully, when using a spreadsheet, as input error is inevitable. However, you can be 100% confident of the integrity of this data. A specialist system will have strict security features in place to automate the entire process, so much valuable time will be saved.
8. Communication and transparency – With growing pressure within organisations to do more with less, communication and transparency between departments is key to streamlining the business processes. Therefore sharing asset information across multiple departments can deliver increased efficiencies and direct financial savings.
9. Insurance Premiums – A tangible ROI realisation for businesses to implement such a system, results in the dramatic lowering of insurance premiums and more successful insurance claims. With less than 40% of assets on the register easily identified during a physical audit and an estimated 20% no longer in existence, organisations are not getting value for money from expensive insurance premiums. Furthermore, poor asset description typically results in claims being challenged by insurance assessors. Without detailed information from a specialist system, such as a serial number or barcode, and proof of location, an insurance company will be less likely to pay out, a risk that businesses cannot afford to take.
10. Software licensing – Using a dedicated asset management system can save significant sums through reducing the over-purchase of software licenses and help organisations avoid legal risks associated with under-purchasing . Many organisations still fail to recognise that poor software licensing policies within the IT department could result in a 10 year jail term so they cannot afford to rely on piecemeal policies and inadequate asset information.