What Is an Asset Register: Why Accuracy Is Important & How Best to Achieve It

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For businesses that rely on the profit-making capabilities of their assets, logging and deploying an asset register is an important step. But, delivering an asset register that guarantees accurate asset data for users is an even greater – and crucial – step. Hence the saying; “if you can count all your assets, you always show a profit”.

The ability to list and track fixed assets in real-time is now the norm, thanks to tracking technologies and Asset Management Software. Yet 81% of small and medium businesses do not have an accurate view of their assets – let alone access to an asset register. The lack of an asset register has pitfalls for businesses:

• Inaccurate financial records
• A build-up of costly ghost assets
• Lack of understanding of asset priority
• Job delays through lack of spare part visibility
• Limited visibility of asset lifecycle (particularly when it comes to acquisition and disposal)
• High asset maintenance costs & unplanned downtime

However, delivering an accurate asset register with the help of asset management tools can identify and eliminate these shortcomings.

What Is an Asset Register?

In its simplest form, an asset register is a detailed list compiled of all your business assets. Assets can be physical/fixed assets, IT assets, digital assets, or specific assets relating to operations such as schools or hotels. It includes details on assets such as location, condition, owner, and value.

The purpose of an asset register is to enable businesses to know the status, procurement date, location, price, depreciation, and current value of each asset.

An asset register is also the second most desired feature of a fixed asset management system, with 77% of Comparesoft users listing it in their requirements.

Although building and maintaining an asset register on a day-to-day basis may seem like a lot of admin work, it can have an overall positive impact on a business’s bottom line. So much so, that an accurate register can increase business revenue and cash flow by 5 – 18%.

Other benefits of maintaining an accurate asset register include:

• Providing complete transparency of all asset data
• Ensuring all assets remain compliant with regulatory standards
• Providing an accurate audit trail
• Helping to track and identify assets
• Preventing assets from being lost or stolen with accurate location data
• Allowing you to calculate depreciation
• Estimating maintenance and repair costs

What Should Be Included in an Asset Register?

No matter what type of register is required, each will require specific asset data such as:

• What is the asset
• The exact location of each asset
• Procurement details including purchase date and price
• Estimated life expectancy
• Depreciation value
• Insurance and compliance details
• Maintenance history including repairs and downtime

Keep in mind that, although error-prone and not ideal for scaling, spreadsheets can be useful where small businesses have less than 100 assets that are collectively worth less than £100,000.

What goes into an asset register is typically governed by a capitalisation policy. For example, if a business decides to record all assets that have a purchase value of £2,000, then its asset register will contain only assets that had a minimum purchase value of £2,000. I.e, a computer worth £1,200 would not feature in an asset register.

Capitalisation policies differ for each organization; some businesses have it as low as £250 and others can have a starting point of £5,000. A capitalisation policy regulates the minimum value of assets a business wants to track.

How to Create an Asset Register

Using Asset Management Software

The process of creating an asset register with Asset Management Software is similar in the initial stages. For instance, you’ll still need to add the correct fields that match your asset types. But the process is smoother, with many vendors offering simple drag-and-drop solutions.

Businesses can also add vast amounts of data for one asset and connect all that information in one dashboard.

What an asset register software solution also offers is cloud accessibility. This means data can be edited on desktops, tablets, and mobile devices at any time. It also gives one source of truthful data, whereas spreadsheets can easily be copied and provide false data sets.

It can also be linked to asset tracking devices that enable a system to automatically update asset information – such as location – without the need for manual data entry.

Using Spreadsheets

Using Microsoft Excel or Google Docs, you’ll need to either duplicate a free example asset register template or build your own. Once decided, you’ll need to make sure your asset register spreadsheet has the correct fields that match your requirements. These can include:

• Unique asset ID
• Location
• Description
• Serial number
• Purchase date
• Supplier information
• Purchase Cost
• Depreciation rate
• Owner/Assigned to

Each asset will be assigned its own row and information will be represented in columns. With multiple spreadsheets are often required for different asset types and to avoid set limits.

A spreadsheet fixed asset register can then be shared with the right user who can input and edit data. Keep in mind that a spreadsheet requires a lot of manual data entry and is prone to multiple human-errors as each asset is purchased, sold, or requires new information, it is to be entered by hand.

What Are the Different Types of Asset Registers?

The type of asset register that a company builds can depend entirely on the size of its operations. Not only can registers be in the form of paper, spreadsheets, or specialised asset register software, but they can also be specific to the type of asset.

Types of asset registers include:

• Fixed
• IT
• Digital
• Facility
• Information
• Hardware

Small businesses tend to have just one asset register that consists of the data of all assets. Typically, when businesses have only one register, it is called an asset register. But, depending on a business’ capitalisation policy, this can also include fixed assets that are movable too.

For example, if a register includes all assets worth more than £2,000, then company vehicles may also be counted in a fixed asset register.

Whereas larger companies, depending on the industry, are likely to have up to three different types of asset registers that include their IT and digital assets. In this instance, the asset data that is stored will vary depending on the register.

Data Found in an Asset Register

• Description of an asset
• Purchase date
• Purchase price
• Location of assets
• Owner of assets
• User of assets
• Barcode or Serial Number of assets
• Insurance coverage
• The current value of assets
• Depreciation method used
• The warranty information from the manufacturer
• Maintenance information
• The remaining life of an asset
• Estimated Resale Value (Salvage Value) of the asset

Data Found in an IT Asset Register

• Type of Asset – Hardware or Software Asset
• Location of the Asset – On-premise, Private, Public, or Hybrid Cloud
• Operating System
• licence Renewal Date
• licence Start Date
• User
• Cyber Insurance Coverage
• Depreciation Method Used

Data Found in a Digital Asset Register

• Description of the asset
• Location of the asset
• Asset Owned or Copyrighted
• Asset User
• Depreciation Method Used
• Digital Insurance Cover
• Asset Format
• Preservation Risk
• Type of Digital Asset
• Estimated Value of Digital Asset

How to Keep an Asset Register Consistently Accurate

When creating an asset register, it’s recommended that businesses export all assets as recorded in their accounting or Asset Management Software.

The next step is to carry out a physical audit. Physical audits can be easier if businesses have tagged their assets with tracking tags such as barcodes or RFID tags.

After the audit, they can compare the list of assets from their accounting or asset management system with the physically audited assets. Inevitably, businesses are likely to find a difference between the audited assets and their list of assets. Missing assets are technically termed ghost assets, which are typically written off.

Once a company has created a master fixed asset register, keeping it updated and accurate can be challenging. Particularly if assets are constantly moving across multiple locations. Most companies will tag their assets with tracking labels so that they can track movement in real time.

The Importance of an Asset Audit and Depreciation Methods

Whilst maintaining an accurate asset register digitally is vital, it can be complemented with physical audits that increase a register’s effectiveness.

Physical audits provide vital “What you see is what you get” information, which can be difficult to capture digitally. For example, environmental wear and tear are almost impossible to fully describe without a physical audit.

Another benefit of a physical audit is that it provides significant confidence in the accuracy of a business’s asset register. As a result, they’re better equipped to handle external audits and compliance-related situations.

The depreciation method is another factor that needs to be recorded to better manage fixed asset management strategies. Quite often tax authorities dictate the type of depreciation method to be applied to assets. The four most popular depreciation methods are:

1. Straight-Line
2. Double Declining Balance
3. Units of Production
4. Sum of Years digits

Why Accuracy Is Challenging with a Fixed Asset Register

Quite often, companies rely on spreadsheets to manage their assets. Whilst spreadsheets can be easy to use, they are not designed to maintain the accuracy of an asset register.

Most information related to an asset is dynamic. Such as location, user, depreciation value, warranty information, and maintenance history. Therefore, it is very difficult to maintain the accuracy of a spreadsheet when managing dynamic information. As well as, in most cases, multiple teams entering different information.

It is for this reason that reliable Asset Management Software is highly beneficial to maintain the accuracy of an asset register. Most modern asset register software is cloud-based, which means multiple teams from multiple locations can edit data at the same time.

Moving forward with IoT-based tracking, enabling equipment to transmit its location and status, maintaining an accurate register is likely to require fewer manual inputs. For example, a compressor would update its location and transmit that information to a software database. This means that there are no manual tasks required to update equipment data.

Frequently Asked Questions

What Is the Purpose of an Asset Register?

The purpose of an asset register is to improve the way a business manages and maintains its assets by displaying them all in one accessible system. It includes all relevant information regarding each asset including asset ID, location, purchase date, and more.

How Can Asset Managers Maintain the Accuracy of an Asset Register?

To successfully maintain the accuracy of an asset register, businesses should:

• Regularly update asset depreciation values
• Track assets in real-time with asset tagging solutions
• Update asset usage and condition ratings
• Remove assets that have been disposed of