“It’s time for the Annual Inventory.” At that announcement, your staff begins to look a little deflated – and there may have been some audible groans – and possibly eye rolls. You know the feeling, it’s like when you realize it’s tax season or that your wife committed you to yet another Trivia Night. You know you’ll survive – but there are literally hundreds of things that you’d rather do.
Most people go into these tasks with a “let’s just get this done and get on with our lives” type of attitude (after burning through every possible reason to delay, naturally). But what if you looked at doing your inventory from less of an accounting compliance perspective and more from the view of what this could mean for your department or organization?
Taking that notion a step further – what if you were to count all of your assets, not just the ones required for Financial Reporting? Accounting typically has a dollar value threshold that is used to define what assets are needed for reporting. But for the sake of discussion, what would it mean if you had a little more information about some of the other assets.
I know – that means making the annual inventory processes that much longer. What could possibly be the benefit of taking an already arduous task and making it bigger?
Hang in here with me for a minute. Let’s just suspend the reality of your current inventory processes and look at this idea of getting more information about your assets – regardless of the Accounting dollar threshold.
Just Because It’s Cheap Doesn’t Mean It Doesn’t Have Value
What Accounting needs to report doesn’t necessarily cover everything you need to run your department successfully. If you’re in IT, for example, you might need to keep an eye on certain items for upgrades, or keeping spares for when something is out for maintenance, or maybe some items just have a tendency to wander off, leaving your team to have to replace them. Some of these items may not meet the Accounting dollar threshold – but knowing where they are and what their status is may save you a lot of headaches.
Does it ever seem like you or your team is spending time trying to track down items whenever you need them? Or that it seems like you are replacing things more frequently than you think you should? Many firms will create a pool of spares or buy surplus items just to make sure they eliminate time wasted in a search. How much of your operating budget goes to ensuring that you have the tools you need – when you need them – to be successful. What would it mean for your department budget if you could streamline that amount – and maybe put the money into another initiative?
If It’s Easy – Why not?
The reason you get such an enthusiastic reaction from your staff when you mention INVENTORY is because it’s often a pain. It takes time, it takes them away from other tasks that have deadlines, and if the data is wrong, it gets repeated. So why would you want to expand the number of items to count below the dollar amount required?
But, if you used an automated solution that made the process easier/faster/accurate, of course, you would include other items. Why wouldn’t you?
We had a client that did just that. They introduced automation. Because of the ease of the process, they were able to expand the asset pool they tracked from a $5000 threshold to a $500 threshold – without increasing the inventory resources or activity timeframe. The result is a much larger and more accurate view of what they really have, where they have it and what state it’s in. As I said, that kind of information can have a pretty solid effect on your budgets and planning.
Tracking assets lower than Accounting’s dollar threshold can have a strong impact on your team. The key is finding a way to do it that is easy and has minimal impact on the department team. If you had that, why wouldn’t you track everything that has value to you, your team – and accounting?
I just so happen to know of a solution that could automate this process for you. Let’s talk.