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?
