Posted: 1 June, 2025 Category: Learning Centre

By Stuart Jailler of Seareach

Many organisations rely on a wide range of physical assets – equipment, machinery, IT hardware, vehicles, and more. Yet surprisingly, a large number still lack a structured, up-to-date fixed asset register to track and manage these valuable resources.

A fixed asset register isn’t just an admin tool – it’s a business-critical system. Failing to maintain one can result in serious financial, operational, and legal consequences.

What Is a Fixed Asset Register?

A fixed asset register is a comprehensive record of an organisation’s long-term assets. It typically includes details such as:

  • Asset description and ID
  • Location and assigned user
  • Purchase date and cost
  • Depreciation rate and current value
  • Maintenance schedule or service history
  • Disposal or write-off information

Whether managed via spreadsheet, software, or integrated ERP system, a fixed asset register ensures an organisation knows what it owns, where it is, and what it’s worth.

The Risks of Not Having One

1. Inaccurate Financial Reporting

Without a fixed asset register, organisations risk overstating or understating asset values on their balance sheets. Depreciation may be applied inconsistently, or not at all, leading to compliance issues during audits or tax reporting.

2. Poor Asset Utilisation

When assets aren’t tracked, they’re often duplicated, underused, or misplaced. This can result in unnecessary purchases, higher operational costs, and inefficiency across departments.

3. Audit and Regulatory Failure

Most auditors require detailed asset information as part of compliance checks. Failure to provide accurate records may lead to audit failures, penalties, or reputational damage.

4. Increased Risk of Theft or Loss

Assets that aren’t recorded are easier to lose or steal. A fixed asset register helps deter internal theft and ensures that every item is accounted for.

5. No Basis for Maintenance or Insurance Claims

Without asset records, scheduling maintenance or validating insurance claims becomes difficult. In the event of damage, breakdown, or loss, claims may be delayed or denied due to insufficient documentation.

Real-World Example

A manufacturing company in the Midlands lost over £40,000 worth of tools and equipment in just two years- simply because they had no centralised register. Tools were booked out informally, moved between sites, or never returned. Once a register was introduced and asset tags applied, loss dropped by over 85% in the first year.

Key Benefits of Having a Fixed Asset Register

  • Ensures accurate financial reporting and tax compliance
  • Improves asset accountability and visibility
  • Supports strategic planning and procurement
  • Enables quicker audits and insurance processes
  • Helps reduce loss, duplication, and downtime

Getting Started

Setting up a fixed asset register doesn’t have to be complex. Start by:

  1. Listing all existing physical assets
  2. Assigning each a unique ID or barcode
  3. Capturing key details (location, cost, condition)
  4. Choosing a format – spreadsheet or asset management software
  5. Maintaining regular updates as assets are added, moved, or retired

For added control, many organisations pair their register with asset register tags or labels, making it easier to track items on-site.

Questions and Answers

Why is it important to tag fixed assets?

Tagging fixed assets provides a unique identifier for each item, allowing for accurate tracking, audits, and lifecycle management. Asset tags (such as barcodes or QR codes) link physical items to the asset register, improving visibility, control, and accountability across the organisation.

What are the implications of not having a fixed asset register?

Without a fixed asset register, organisations risk financial inaccuracies, audit failures, and operational inefficiencies. Assets may be lost, duplicated, or mismanaged, and there’s no reliable way to track ownership, value, or location—posing both compliance and cost risks.

What are the risks of an incomplete asset register?

An incomplete register can result in assets being missed, undervalued, or incorrectly recorded. This can lead to poor decision-making, difficulties during audits or insurance claims, and higher chances of untracked losses or theft.

Why is asset identification important?

Asset identification connects each physical item to its key data—such as purchase value, location, and maintenance history. It enables better control, accurate reporting, and faster resolution of issues, while also deterring theft or misuse.

What is the risk of not tagging assets?

Unlabelled assets are harder to track and verify, increasing the risk of misplacement or theft. Audits become more complex and less accurate, and financial records may not reflect the true inventory—leading to compliance failures and higher costs.

Final Thoughts

Not having a fixed asset register is more than an oversight – it’s a risk. From lost equipment to failed audits, the implications can be costly and far-reaching.

For businesses of any size, maintaining a reliable, accurate asset register is a simple but essential step towards better governance, accountability, and long-term cost savings.

References

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