A deep understanding of compliance, detailed tracking, and the ability to differentiate between various types of assets is required when dealing with fixed asset management in the GovCon sector. This presents unique challenges that go beyond typical accounting practices. So to understand and navigate this a little better, let’s start by exploring key concepts, best practices, and the importance of a comprehensive approach.
Understanding the Scope of Fixed Assets in GovCon
In the GovCon world, fixed assets are not just about company-owned property that depreciates over time. It’s critical to recognize the different types of assets and manage them appropriately. These assets can be categorized into three main groups.
Company-Owned Capital Assets
These are the traditional assets that companies purchase for their own use, such as equipment, vehicles, and buildings. These are the assets that depreciate.
Government Property Assets
This includes assets owned by the government but in the possession of the contractor, either through government-furnished equipment (GFE) or contractor-acquired property (CAP). These assets do not depreciate.
Company Expensed Assets
These are assets that are purchased by the company and expensed rather than depreciated. These can include items like cell phones, small tools, or even keys. These assets do not depreciate.
Integrating Asset Management with Purchasing
An asset management system isn’t just an isolated function; it needs to be integrated with your purchasing and accounts payable systems for smooth operations. Here’s how you can achieve this:
- Start with the Purchase Order: Ensure that the process begins with a clear and compliant purchase order that includes all relevant information about the asset being purchased.
- Track Through Receipt: Upon receiving the item, properly record it in your system, linking it back to the original purchase order. This integration ensures that all information regarding an asset can be traced from procurement to disposal.
- Convert Purchases to Assets: Software like JAMIS Prime ERP can convert purchases into fixed assets automatically, streamlining the process. When a purchase is designated as a fixed asset, the system can create an asset record from the purchase information, saving time and reducing errors.
- Accounts Payable Integration: By linking the asset to the AP invoice, you create a connection from the asset to the vendor and the payment, facilitating better tracking and easier reconciliation.
- Automated Processes: Use automation to reduce manual data entry, ensuring a more efficient, accurate, and auditable process. This can be done with specialized software such as JAMIS Prime ERP.
Key Components of Effective Asset Management
A comprehensive asset management system should include these key components:
- Detailed Asset Records: Maintain records with detailed information about each asset such as:
- Asset type, class and description
- Purchase date and cost
- Location and custodian
- Manufacturer, model and serial number
- Contract and government property information
- Depreciation Management: Use appropriate depreciation methods for company-owned assets. Systems like JAMIS Prime allow the creation of multiple depreciation schedules.
- Location Tracking: Track asset movement and location changes. Make sure to update the asset records every time an asset is moved or its custodian changes. This can be done through systems that track the location within the asset record.
- Transaction History: Maintain a complete history of transactions, including purchases, depreciation, transfers, and disposals.
- Compliance Checks: Ensure that all processes adhere to government regulations. Build-in compliance checks can be useful to help with this.
- Reporting: Generate reports to track asset acquisitions, disposals, balances, and depreciation. Make sure your asset management system can generate reports on government property and depreciation.
Best Practices for GovCon Asset Management
To ensure your asset management is effective and compliant, consider these best practices:
- Regular Audits and Inventories: Conduct regular physical inventories and audits to verify asset records. Make sure that all records are up to date with the latest information.
- Employee Training: Train employees on proper asset management procedures, particularly those who handle or manage government property.
- Use of Technology: Leverage ERP systems such as JAMIS Prime or Acumatica to automate and streamline asset management.
- Clear Policies and Procedures: Develop and document clear policies and procedures that are compliant with government standards.
- Internal Review Program: Establish an internal review program to verify and improve asset management processes.
- Data Accuracy: Ensure data integrity by cross-referencing different information sources and maintaining clear documentation.
The Importance of Software Solutions
JAMIS Prime ERP is specifically designed for government contractors, providing an integrated solution that goes beyond basic procurement to ensure accuracy and adherence to regulations like the FAR, and to help prepare for a CPSR. You can automate the entire procurement process, from purchase requests through payment and asset management. It organizes vendor quotes, issues purchase orders, manages receipts, and maintains detailed audit trails. Built-in compliance checks and reporting help maintain audit readiness and the system tracks company and government-owned property, including leases, rentals, and granted property.
Beyond compliance, JAMIS Prime enhances operational efficiency by automating purchase order conversions into fixed assets, reducing manual data entry. Real-time dashboards and analytics provide key performance indicators for data-driven decisions. As a cloud-based application built on the Acumatica platform, JAMIS Prime is accessible anywhere, from any device, ensuring teams stay connected and productive. JAMIS Prime is a perfect fit for government contractors seeking compliant, user-friendly software to manage their purchasing and asset operations.
To learn more about JAMIS Prime ERP, visit our website or contact us for a Personalized demonstration.
