Physical verification Process is an auditing process in which the auditor inspects the actual assets of the company to make curtain that they match up with written records. Often the auditor verifies only a sampling of physical products.
Physical Verification of:
- Stock
- Fixed Assets
- IT
- Records
- Cash & Equivalent
Do’s for Physical Asset Verification:
- Estimate and gather what you need to track or tag,
- Understand the full project management life cycle,
- Select software which can help you with reporting and analytics functionality,
- Track assets as they get added in to the company,
- Use a simpler barcoding system for allocating the unique identification number,
- Choose who can provide best service for you,
- Understand the difference between asset tracking and inventory tracking,
- Conduct a critical equipment analysis,
Don’ts in Physical Asset Verification:
- Don’t forget to complete the entry for current and future value of the asset
- Don’t forget to check for consistency and categorization,
- Don’t forget to define a strategic objective for the exercise
- Don’t forget to create a comprehensive database
- Don’t forget to eliminate unused or ghost assets
- Don’t forget to track maintenance and repair schedules
Asset tracking and utilization can be a significant value addition in ensuring the profitability and growth of an enterprise. The more efficient the use of the asset, the better the final output and results for the company. Therefore, robust resources need to be deployed to track and ensure the compliance of these resources in terms of both financial and operational parameters.
In companies where multiple classes of assets exist, and are widely dispersed across departments, offices and even people, keeping track of all of them can be a daunting task. This has been one of the top most priorities for the Finance and Admin teams as they are the caretakers of resource management. Therefore, timely asset verification and records upkeep becomes critical.
It is mandatory for organizations to conduct an annual physical count of all the fixed assets to check for their depreciation, resale value, verifying the accuracy as there would be continuous addition and disposal of items regularly. Estimating the remaining utilization factor is something that is equally important to evaluate the life cycle of the particular product/ resource.
The process is relatively simple. During an inventory audit, each tagged asset will be given a unique identification number and a corresponding barcode or QR Code, which can be scanned, and physically verified and then it is added into one extensive database.
