The fixed asset list shows two hundred items, but no one has checked the physical reality of this list in the last five years. A decision to count is usually made with this kind of realization.
Asset counting proceeds differently from inventory counting. Quantities are not counted, identities are; each asset is verified individually.
In this article, we explained how to set up a count plan, field execution, variance analysis, and adjustment records.
Table of Contents
Difference from inventory count
In inventory counting, quantity is counted; which specific ten items they are usually does not matter. In asset counting, however, every single item is unique.
This difference completely changes the counting method. The person counting does not sum up quantities, they verify identities.
Assets are also scattered. While inventory stays in a single warehouse, fixed assets are spread across the entire building and employees.
The frequency of counting is also different. While fast-moving inventory is counted weekly, asset counts are usually performed annually or semi-annually.
We covered the method on the inventory side in the warehouse count article.
Preparing a count plan
A count that starts without a plan remains unfinished and loses credibility. The scope must be determined from the beginning.
Scope must be defined on a location basis. It should be clear which buildings and floors will be counted.
The calendar must be realistic. The duration should be calculated by estimating how many assets a person can count in a day.
Responsible parties must be designated. Assigning a counting supervisor for each location makes tracking easier.
Freezing asset movements during the counting period should also be considered; moving assets lead to duplicate or missing counts.
Preparation before the count
Reviewing the records in the system before the count significantly facilitates field work.
Records that have been scrapped but remain on the list must be cleaned up. These appear as unnecessary shortages during the count.
Records with blank location information should also be flagged. An asset whose location is unknown prolongs the count.
A plan must also be made for unlabeled assets. If labeling is to be done during the count, materials must be prepared in advance.
We explained the labeling structure in the asset labeling article.
Counting in the field
Field work should proceed on a location basis. One room should be completely finished before moving on to another.
Scanning labels with a mobile device is much faster and error-free compared to paper lists. Every scanned asset is marked instantly.
The physical condition of the asset should also be evaluated at this time. Devices in unusable condition must be noted.
A separate marker should be used for inaccessible assets. A device in a locked room means it could not be counted, not that it is lost.
At the end of the count, completion approval must be given for each location; partially finished locations should be clearly visible.
Analysis of missing assets
Assets that cannot be found during the count should not be immediately considered lost. The vast majority of shortages have explanations.
The first check is unrecorded transfers. The asset may have been found in another location and the transfer record was not made.
The second check is assigned assets. A laptop in the possession of an employee working from home cannot be found in the office.
The third check is devices at service. Assets under repair are not in the field, and this situation should be visible in the records.
Shortages remaining after these three checks are evaluated as actual losses and reported separately.
Surplus assets
A frequently overlooked outcome of counting is unrecorded assets. These are at least as important as shortages.
Unrecorded asset is usually a purchase that never entered the inventory. It indicates a disconnect between the purchasing process and inventory registration.
Sometimes these are devices acquired through donation or transfer. They also need to be recorded.
Surplus assets must be recorded and labeled immediately. Records left for later are usually never done.
Root causes must also be addressed; if the inventory registration step is not added to the purchasing workflow, the same situation will repeat.
Correction records
All corrections made as a result of the count must generate records. An inventory updated silently is not auditable.
For every correction, the reason, date, and the person performing the transaction must be specified. These three pieces of information are the basis for subsequent reviews.
An approval mechanism is required for assets closed as lost. This should not be done by a single person's decision.
Its reflection on the accounting side should also be evaluated; removing an item from the fixed asset list has financial consequences.
We discussed the importance of audit trails in the audit logs article.
Continuous counting system
A major annual count is both exhausting and catches discrepancies formed throughout the year too late.
The alternative is rotating counts. Every month a few locations are counted, and the entire inventory is covered within the year.
This method disrupts operations less and reveals discrepancies much earlier.
The frequency can be increased for high-value assets. Control frequency should be proportional to risk.
Records are kept in the inventory module and the counting history is stored.
Points to consider
Turning the count into a punitive tool is the fastest way to ruin results. Searching for someone to blame when a loss is found leads to hiding the truth in subsequent counts.
A more effective approach is to strengthen record discipline and address process gaps.
Sharing the count results is also beneficial; seeing improving locations increases participation.
Not doing the count at all is the worst option. An inventory of unknown accuracy produces no decisions.
A small-scale but regular count is always more valuable than a large count that is never done.
Frequently asked questions
How often should the count be performed?
An annual full count is common; a rotating monthly count is preferred because it catches discrepancies earlier.
How are assigned assets counted?
Verification is done on a per-person basis; the employee is asked to show the asset and the record is updated.
Should operations stop during the count?
When proceeding on a location basis, there is no need to stop; only asset movements are restricted.
Can count results be reported?
Variance reports can be generated by location and category; we plan this during setup according to your needs.
Asset counting is the only moment when inventory records meet reality. An unreviewed list inevitably drifts away from reality over time.
Clean up your records before starting the count; scrapped items generate unnecessary searches in the field.
Do not immediately count missing items as lost. Transit, assignment, and service checks explain the vast majority of discrepancies.
If possible, switch to a rotating count; small and regular counts are much more sustainable than a major count done once a year.
By consulting with the EQLEM team,you can plan your counting routine.