One of the most common questions we hear from accountants and book keepers is will GoCodes calculate fixed-asset depreciation? While the answer is yes, our reporting module will provide a series of depreciation reports that provide everything you need, we think that many accountants are missing out on the bigger picture.
Running an annual, quarterly or monthly depreciation report may be crucial for accurately tracking your company’s financial position but there are often larger problems lurking within the fixed-asset accounting register. Because of this it’s our opinion that this periodic calculation should be the LAST step in a continual process that accurately records and maintains complete records for all your fixed assets.
So where do the most common data discrepancies occur? We will list some of the most common below:
Ghost assets. These are assets which exist in the asset register but which are no longer present. These ghost assets inflate the book value of fixed assets and need to be written off. They also result in over payment for maintenance, warranty and insurance coverage in many instances. The solution is to complete a physical inventory to positively verify that each fixed asset is physically present and is in good working order.
Invisible assets. These are the opposite of Ghost assets. They are fixed-assets your company owns which are not present on the asset register. These assets are usually handled incorrectly as expense items, perhaps purchased on a company credit card, trade-in or other means normally bypassing the company purchase process in some way. The impact of this is the lost opportunity to depreciate the asset over its useful life as well as ensuring it’s covered in the appropriate maintenance, warranty and insurance policies. As before, the best solution for addressing invisible assets in to complete a physical inventory and close any process gaps in the procurement process.
Incorrect reporting of asset status. Just because an asset is recorded in the asset register does not necessarily mean its operational status is known and reflected correctly. Broken assets or assets in need of maintenance may need to have their financial asset status updated accordingly, it may be time to write them down to ‘0’. Perhaps the useful life has been shortened or an asset have been retired due to needed repairs. If your organizations fixed asset system is purely focused on depreciation you may be missing the capability to accurately track and maintain the status of your assets
This is where GoCodes can help. By providing a complete solution that addresses all the asset tracking life-cycle requirements your whole team can effectively participate in tracking and updating the status of fixed assets in real-time.
In practice your employees and contractors can ensure that all fixed-assets are uniquely & permanently identified with GoCodes patented labels, their status and location is maintained. We also automate the tracking of complete warranty and service records. By doing this, you can be confident that when you run a depreciation report in GoCodes, that the data in accurate and complete.
Ready to learn more? Contact us today for a demo or free trial.