Asset Tagging and Reconciliation
An organisation's physical assets are often viewed in different ways by functional departments. The most common functions involved are:
Business Accounts
For cost allocation, depreciation and payback calculation a business accounting function looks upon an asset as a basis for costs and will usually give an asset identification number based on the capital expenditure cost of that asset. The identification is primarily used for accounting and would not normally be used elsewhere within a business. The identification is used to compile a 'Fixed Asset Register'.
Engineering
For asset maintenance and work history collection / manipulation an engineering function identifies assets so that it can easily organise maintenance on those assets. The unique identification of assets allows collection of data on longevity of plant and the work completed on that plant. The code identifier is usually developed for a Planned Maintenance Asset Register.
The merging of identifications for both functions and the subsequent physical tagging of the asset with the agreed identification code, is Asset Tagging and Reconciliation.
The Case for Reconciliation and Tagging
Engineering costs can be one of the largest budget lines for organisations and it is important that there is easy access to information on past, current and future expenditure. The easiest and most effective way to organise such information is to relate spending to particular assets.
Thus accounting information such as:
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Original purchase cost
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Net Book Value (NBV) - taking account of depreciation
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Personnel spend
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Spares spend
Can be related to engineering information such as:
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Asset with greatest spend (e.g. which assets are consistently unreliable)
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Spares holding values for particular assets
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Repair versus Replace costs (i.e. justification for replacement).
To ensure that rational decisions can be taken and adequate information is available on such issues as:
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Overall costs of asset ownership (i.e. where to source new equipment)
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Overall value of assets
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Overall value of spares
To ensure communication and commonality of information it is important that there is a crossover between the two functions of business accountancy and engineering.
Therefore, the accounting 'Fixed Asset Register' must tally with the engineering Planned Maintenance Asset Register.
The physical tagging of assets means that there can be no current or future confusion as to which asset is which.
Asset Reconciliation and Strategic Maintenance Planning Ltd.
Strategic Maintenance Planning recognise the importance of this commonality of identification and have developed a structured and systematic methodology for ensuring it is achieved to the satisfaction of both the business accounting and engineering functions.
This process ensures:
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The production of an accurate Fixed Asset Register
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Assets on the Fixed Asset Register are physically tagged
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That when engineers and accountants refer to assets in general and in particular they can be sure that they are referring to the same thing
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Appropriate engineering spend can be assigned to particular assets to get a full 'Lifecycle Cost' for those assets
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This then allows future decisions on asset procurement to be made based on sound financial information.
This process ensures the engineering and financial functions of YOUR organisation can communicate and that business financial information is meaningful and useful.
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