With US finance departments and corporate governance being held increasingly accountable under the ever-changing and stringent requirements of Sarbanes-Oxley (Sarbox) and IFRS in particular, the need for an asset tracking system has never been greater for US companies or their overseas operations.Organisations have to ensure they remain up-to-speed with the current compliance requirements for their sector. In particular, Sarbox requires CEOs and CFOs to personally certify that the company’s records do not contain untrue statements and fairly represent the company’s results.Penalties built into Sarbox can be severe for non-compliance, false declarations and numerous other violations.

For that reason alone therefore, it’s wise to invest in an asset management package that features full Sarbanes Oxley compliance software as potential violations of Sarbox can include under or overestimating the value of fixed assets or the incorrect application of depreciation rules. For many accounting departments, that inadvertent slip would be easy to make if they relied on the well established spreadsheet.   At the level of accounting complexity required in today’s legislative and business environment, spreadsheets can quickly become complex and difficult to verify.Integrating a spreadsheet with other enterprise systems and tracking asset changes or producing a clear audit trail can also be difficult.Physical assets can easily “disappear” from a spreadsheet and IT assets (where most of the value is in software) are even more difficult to track.

The problems caused by poor asset tracking software extend beyond possible Sarbox compliance issues.   What happens if your company has to make an insurance claim for example?If an insurance assessor sees a ten-year old PC on the asset register, alarm bells will start to ring. Since the likelihood of such an item still being in use is vanishingly low, the assessor will be extremely unlikely to pay out and far more inclined to challenge every other item on the register. Suddenly the fire, flood or theft that caused the initial claim becomes more life-threatening to the company, delaying getting back to normal activity, because of the inability to confirm an asset’s existence results in long term delays in receiving an insurance compensation payment.

The only sure way companies can speed up the claim process is to provide a highly accurate, highly verifiable asset register. Tracking assets during a physical audit and storing the information in an integrated asset register with a detailed description and location information is an important first step. With this single record in place, it is a simple process to ensure any changes, such as scrapping or relocating an asset, are updated within the system.  Using a reliable, centralized inventory management software package means the organization has an up-to-date record of complete asset value and location that will keep you compliant and smooth the progress of any insurance claim.