Big Benefits of Using Barcode Technology
Barcoding is becoming the technology of choice for fixed asset physical inventories. It enables companies to capture and reconcile enormous amounts of information quickly, accurately, and cost effectively. In order to take advantage of barcoding's technological superiority, however, companies must plan implementation of such a system appropriately. Barcoding offers several important advantages over manual inventories because fixed asset physical inventories involve accumulating and manipulating large amounts of data.
Some of the benefits of barcoding are:
Improved efficiency. Our experience shows that barcode inventories are much more efficient than manual inventories. For example, a physical inventory of a medium-sized company might require the collection, manipulation, and reconciliation of 8,000 to 10,000 assets. Manually capturing this information is a very time-consuming process. Counters walk around company facilities, manually searching through an asset list to find the corresponding asset, and check off assets as they are found. Often, the asset is not found on the list, and the counter must manually record the information about the asset. Regardless of whether or not the asset is listed, information on the fixed asset system must be updated manually.
Speeds up the process significantly. Our experience and time studies indicate that a barcode inventory can be conducted two to three times faster than a manual inventory.
Improved quality of data. Manual inventories are not only time consuming but are prone to errors. Industry standards estimate that one out of every 300 characters recorded manually will be in error. A medium-sized company manually recording 10,000 assets requires the manipulation of approximately one million characters of data, resulting in a probability of 3,000 character errors. These errors greatly complicate the reconciliation process. Barcoding significantly reduces these errors because virtually all of the data is entered automatically.
Easier reconciliation. Fewer errors make the reconciliation process easier. And, if the fixed asset sub-ledger is downloaded into the barcode readers, the reconciliation will be almost complete by the end of the physical inventory. Only exceptions need to be reconciled.
Improved morale. Companies conducting physical inventories with barcoding enjoy yet another bonus: improved morale of the counters. When conducting manual inventories, counters quickly become bored and distracted. After just one full day of recording assets, they are tired, both mentally and physically, leading to additional errors. However, when they conduct barcode physicals, counters seem to enjoy the new technology, often making a game out of who can count the most in a day. Any company with more than 300 assets should seriously consider barcoding. For many companies, the alternative to barcoding is not performing the inventory at all, due to the enormity of the task. Obviously not performing a periodic physical inventory is undesirable due to the resulting insurance exposure, financial exposure, and loss of tax advantages. If you decide to implement a barcoding system, remember that proper planning and management are crucial. With proper planning, resolution of issues, development and software, you will probably find the inventory process so easy, you'll wish you had implemented barcoding technology long ago.
Most companies realize a 30% first year tax savings after implementation. This course manual will take you step-by-step through the entire process and it will immediately pay for itself by eliminating huge outsourcing fees, as well as the insurance and tax savings that you will capture.
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