Greatest Benefit of Outsourcing Fixed Asset Services

Large businesses in Africa are waking up to the potential of outsourcing fixed asset accounting services to yield substantial savings in company tax and insurance premiums. In this article, we’ll look at the benefits of outsourcing Accounting services and how Outsourcing your physical inventory makes fixed asset tracking more manageable and accurate.

We all want to spend less time on inventory accounting tasks but we don’t want to take the plunge into the world of savings. After all a task you undertake with internal staff feels like a natural resource. But when it comes to data collection it’s all about time, and time is money.

Despite fixed asset tagging and reconciliation services becoming increasingly mainstream and acceptable in Africa, for many organizations it is still tempting to tackle asset inventory by themselves.

Of course, that’s not to say that the only companies that are embracing fixed asset accounting services are international companies. There are some fantastic success stories of local banks and utility companies in the region that have successfully carried out physical asset verification projects. Their success is down to the fact that they took steps to free themselves from the limitation of working with internal resources alone.

Most companies conduct a physical inventory once a year. It really doesn’t have to be said but I will say it anyway. Physical asset inventory is an expensive process that very few employees enjoy.

If you gave employees a choice between participating in the company’s annual physical inventory and going for a corporate cocktail party. Which one would they choose?

The thought of spending the better part of a weekend out of office in unbearable hot and dusty warehouse or traveling to remote sites, trying to count every piece of asset, finding materials that you can’t really identify, and searching for “ghost” assets is not what most employees would like to do.

If you ask any one who has ever taken part in a physical inventory count he’ll probably say, because the Finance Manager or the accountant required the figures.” They don’t see any advantage in doing a good job or being accurate. Most feel that the accountant is only going to use the numbers we give him on some reports that no one is going to look at.

Yes, management knows the fact. They know that large inaccuracies in fixed asset reporting may cause flaws in the overall accuracy of corporate financials, posing a threat to the management team as they are responsible for ensuring regulatory compliance and they also know clearly that sound fixed asset management can yield substantial savings in company tax and insurance premiums. But if the people counting don’t realize the importance of accurate inventory balances, the chances for obtaining errorless counts far fetched.

This is where physical inventory service outsourcing fits in. Asset tagging and reconciliation services offer a structured organization to a company's fixed assets, which provides an accurate record for the following accounting and administrative purposes

• Financial reporting
• Capital expenditure planning
• Insurance requirements
• Accountability and control
• Compliance with Audit requirements
• Accurate perpetuation of the system

I guess you are now thinking about physical inventory outsourcing option seriously? Why not? Here are some good reasons to consider outsourcing your next physical inventory.

If you don't have the dedicated staff available to get the job done accurately and you are required to take periodic physical inventories of your fixed assets, then consider outsourcing.

However, even if you do have the resources...outsourcing fixed asset accounting services allows you to let your employees focus on their existing responsibilities. At least one person will need to take the time to learn how you use your new fixed asset tracking system; however, everyone else is spared from the tedious physical inventory process. Most importantly you will work with a team that understands your accounting needs.

In most cases good physical inventory service providers make extensive investments in technology, methodologies, and people. They barcode inventories and reconcile all your fixed assets, provide fixed asset tracking software, supply asset labels and barcode scanners. When they are done, you'll have a customized system in place that will make all your future physical inventory of fixed assets simple and more accurate.

Why not leverage the expertise and knowledge of the professionals in companies that specialize in asset management solutions?

Solve Complex Asset Tracking Problems Using Simple Tools

Prosperity Agencies understands the need to achieve accurate Tracking of Assets. The primary purpose of physical inventory in asset management is

 "To establish a current, accurate baseline of existing capital assets, accurate insurance payments, depreciation schedules, tax, compliance reporting and a host of other financial considerations.”

In order to provide legal compliance, safety assurance and the effective management of fixed assets, every business must know “What assets they currently have, where those assets are located and how those assets are changing over time.”

The company celebrates the fact that its asset tracking services using RFID label tags and associated asset tracking technologies will serve Zambian Businesses millions of dollars a year and play a very critical role in addressing these asset management requirements.

Just look at the transport sector, with the cost of tyres exceeding millions of Kwachas, large fleets of buses and trucks in Zambia spend many millions of dollars on tyres alone. To most consumers, one tyre is virtually indistinguishable from another, save for the manufacturers name on the side wall as a result; expensive tyres easily get stolen or replaced with old ones when the vehicle is on a trip or even within the parking yard.

Inventory tracking is chaos, but today, technology has closed that gap, and industries from cattle ranching to asset tracking to fleet owners eager to track their fleet tyres have already put it into use-Radio Frequency Identification or RFID.

Through the use of simple asset tracking technologies available today fleets can dramatically solve even the most challenging inventory tracking tasks and decrease tyre-spending resulting in large cost reduction, increase vehicle and driver safety, slow down the depletion of natural resources and decrease pollution, all from a single effort - professional asset management.

RFID tags embedded in a tyre or a barcode tag affixed to the side wall can be a very powerful tyre tracking tool. It will deter theft and help minimize tyre substitution.

The era of hand writing on assets and using spreadsheets to control assets, is over for complex, asset intensive business units in Zambia. It is vital that companies begin using auto identification technology based on barcode and RFID technology to extract value, and to extend the useful and safe life of assets today, tomorrow and in future.

However, it’s believed that most companies in Zambia are at least many years away from deploying similar asset tracking systems in their asset management programs.

About Prosperity Agencies

Prosperity Agencies provides comprehensive Asset Tagging and Verification services, the objective of which is to help organizations create accurate and verified records of capital assets with significantly more details than the existing financial systems are able to provide. Since 2010, a major focus of the company’s development is the provision of asset tracking solutions based on Barcode and RFID technology supplying tags, on site tagging and data collection and asset management systems implementation. 

Prosperity Agencies is ready to actively cooperate for the development of the asset tracking market in Zambia and implementation of new and interesting asset tracking ideas, participate in joint asset management projects with Zambian asset management system integrators.

Small Business Inventory Management

If you are running a small Business or you intend to start a small Business, running small Business is a tough Business; in fact research shows that a number of new small Businesses which start up end up failing. And one of the main reasons for the failure of most small Businesses is Inventory management problems.

What is Inventory or what does the word Inventory mean to you? Inventory in very simple terms is the physical (tangible) aspect of doing business. Inventory refers to stock necessary to do business for example if you have a small manufacturing business, your inventory will be made up of the raw materials or components used to assemble your product, any unfinished goods and finished goods. If you run a small trading business such as a retail store then the merchandise stock which you buy to sell makes up your inventory.

In a literal sense, all business activities are centred on stock or Inventory. Therefore the success of your business depends on how well you manage your stocks through a good accounting system for your stock.

Poor Inventory management and accounting system can result in out-of-stocks and over stocks resulting in either loss of sales for your business or stock losses through theft and damages.

Here are the four ways in which you can effectively manage your stocks to grow your small business.

1. Maintain an assortment of the range of products- but not too many. If you run a small home retail shop for instance make sure you stock all necessary stocks to avoid loosing sales.

2. Keep your stocks low but not below the minimum. I earlier stated that stocks represent money in your business so the more stock you keep the more cash gets held up in your business and you may not be able to pay the people you owe promptly in addition, you may incur further costs such as storage costs if you keep too much of stock. However, in trying to keep your stocks low you should not keep them too low to a level where you run out- of -stock because that can mean loss of sales.

3. Make bulk purchases to obtain low prices if you can- but please don’t over buy. This is a very simple principle when you buy in bulk you are able to negotiate with the seller for lower prices through a discount, in turn you can fairly price your products beating the competition.

4. Devise ways and means to dispose of any obsolete and slow moving stocks so that cash is not held up in such stocks.

From the four listed points, you will note that Inventory management whether in a small business or a big business involves two closely related elements. Firstly know what to order and how much to order, when to order and what price to pay. Secondly making sure that the items, once bought into stock are used properly to produce profits and grow your small business.