Fixed Asset Inventory Solutions
Why is an inventory of a company’s fixed assets important? It is critical to have accurate financial records to comply with accounting, insurance and tax requirements to ensure you are receiving all available financial benefits. Our customized process will increase Income, Cash Flow and ROI.
However, experience shows the majority of companies do not have updated fixed asset records for accounting, insurance or tax reporting.
The Importance of Accurate Fixed Asset Records
An accurate accounting and valuation of fixed assets is critical because it can save your company money. Lots of money. Even if you perform a physical inventory of fixed assets every few years, it is still likely the fixed asset information is not sufficient to create, on a current basis, the financial benefits that are available. This results in money that can improve a company’s bottom line and cash flow.
For many reasons, including insufficient time and resources to search out all the details, fixed assets are often misidentified and misclassified, and sometimes remain on a company’s books when they no longer exist. Experience indicates that from 12% to 18% of assets on the books of most companies no longer exist, and another 10% to 15% are misidentified and misclassified for accounting, tax and insurance purposes. An overall error rate of 10% to 30% is not acceptable.
Corporate finance relies on the fixed asset ledger to report income. Tax Departments depend on the accuracy of the fixed asset ledger for reporting their assets on federal, state and property tax returns. Risk Management relies on the fixed asset ledger in negotiating a premium for a company’s insurable value. It has been our experience that of all the financial benefits created through our process, approximately 30% is attributable to assets that no longer exist, and 70% is related to classification issues, exempt assets and asset that a company may not need to insure.
How It Works
General Financial’s fixed asset inventory program provides more than an accurate accounting and classification of fixed assets. Our process tracks, reconciles and provides the information required to correct the cost, tax and insurable value as well as classifications of all fixed assets, whether purchased originally or the result of an acquisition. Some of our services are available on a stand-alone basis or in combination with two or more other services. These include:
- Physical fixed asset inventories
- Reconciliation of tax returns to the fixed asset ledger
- Replacement cost calculations for insurance purposes
- Assistance with Sarbanes-Oxley compliance (SAS-70, Type II Letter)
- Recommend changes in accounting policies and procedures
- Recommend changes in asset classification and capitalization procedures
GenFi is committed to working with our clients to find and qualify opportunities to increase cash flow, reduce taxes and insurance premiums, and implement efficiencies. However, we also work under your direction, listen to your needs, and communicate to make certain we understand your time frames and internal constraints. The recommendations we provide improve the accuracy of your records, decrease the time required to maintain fixed asset records and can be supported if ever reviewed by any government agency.
Benefits of General Financial’s Fixed Asset Inventory ProgramIn addition to an accurate and current fixed asset ledger, other benefits can be derived from a detailed fixed asset inventory by GenFi. These normally include:
- A reduction in current year federal, state and local income taxes
- A reduction of real and personal property taxes
- A reduction in insurance premiums paid on fixed assets
- A reduction in fixed asset management costs
- An increase in Cash Flow and ROI
GenFi can also assist in reconciling your fixed asset ledger in with your company’s maintenance processes so you can ensure your fixed asset ledger is continuously updated as maintenance is performed.