As a business owner, it’s important to be aware of regulatory compliance and how you track your assets. This process may sound difficult, but with the right tools and knowledge, it can be much simpler. In this article, we’ll walk you through the basics of regulatory compliance and asset tracking so that you can rest easy knowing your business is up to code.
Why regulatory compliance is critical
Asset tracking is critical to any organization, but regulatory compliance adds an extra layer of importance. Organizations will track their assets to ensure they are meeting all relevant regulations.
Compliance regulations vary depending on the industry, but there are some general rules that all organizations should follow. First, accurate asset tracking ensures an organization is using its resources efficiently and effectively. Second, up-to-date records enable an organization to respond quickly to changes in regulations. Finally, complete and accurate asset data helps an organization avoid potential fines or other penalties.
Asset tracking software helps organizations meet compliance requirements, providing visibility into all organizational assets. Additionally, many asset tracking solutions offer features specifically designed to support regulatory compliance efforts. For example, some solutions include regulatory compliance reports or real-time alerts for changes in regulations.
Organizations should consult with their legal teams to ensure they are meeting relevant compliance regulations. However, following these general principles will help any organization track its assets more effectively and efficiently.
Companies required to track assets
A variety of different types of companies track assets for regulatory compliance purposes. These include public companies, private companies, and non-profit organizations. Each company has different asset tracking requirements, however all must maintain accurate records of their assets.
Public companies track their assets for financial reporting purposes. They must disclose their assets on their balance sheets and provide detailed information about them in their annual reports.
Private companies maintain accurate records but do not need to disclose their assets publicly.
Non-profit organizations track their assets for tax purposes only.
All companies must keep accurate records of their assets to comply with regulatory compliance. This includes maintaining a list of all assets, as well as their location, value, and any other pertinent information. Companies must also periodically update these records to ensure they remain accurate.
How does asset tracking software help?
There are many benefits to using asset tracking software when it comes to regulatory compliance. The most obvious benefit is asset tracking software ensures assets are correctly and safely utilized. In addition, monitor and report assets for regulatory compliance efforts.
You can also keep track of your inventory to create an inventory list to add or remove items from the inventory. This helps avoid penalties for not having accurate inventory records.
To maintain certain safety standards for your assets, asset tracking software can help with that too. You can use the software to track maintenance and repair records for your assets. In addition, create alerts for reminders for inspecting and servicing assets. This can help avoid fines for not properly maintaining your assets.
Asset tracking software includes the ability to audit your assets by selecting what to audit and when. Audit scheduling occurs monthly, quarterly, or even annually. Throughout the audit, updating assets to reflect the status and location of the assets ensures the most up to date information. Training all employees on how to conduct an audit and document this training helps maintain regulatory compliance.
Finally, asset tracking software makes it easy to do report on your regulatory compliance efforts. You can use the software to generate reports showing how well you’re complying with regulations. These reports can be helpful in showing regulators that you’re taking your compliance responsibilities seriously.
What happens if regulatory compliance is not met?
There can be severe consequences if a company does not comply with regulatory requirements. These can include heavy fines, suspension of business operations, and even imprisonment. Non-compliance can also lead to negative publicity, which can damage a company’s reputation and make it difficult to attract new customers. In the worst-case scenario, non-compliance can put a company out of business. Regulatory compliance is therefore essential for any company that wants to stay in operation and protect its employees, customers, and shareholders.
What is the Sarbanes Oxley Act?
Sarbanes Oxley or SOX compliance is a term to describe the measures a company takes to ensure it is in compliance with the Sarbanes Oxley Act. SOX is a set of US laws that regulate how public companies report their financial information.
The Sarbanes Oxley Act began in 2002 in response to a number of corporate scandals, such as the Enron scandal, that had rocked the US economy. The aim of the act is to improve corporate governance and financial reporting so that investors can have confidence in the integrity of companies’ financial statements. This includes information about your assets and how you track them.
SOX compliance requires companies to put in place internal controls to ensure that their financial information is accurate and complete, and to disclose any material weaknesses in these controls. Companies establish procedures for handling whistleblower complaints about potential violations of the act. Failure to comply with SOX can result in heavy fines and even jail time for company executives.
What is SOX Section 404?
Section 404 of the Sarbanes-Oxley Act or SOX requires that companies establish internal controls over their financial reporting and disclose any material weaknesses in these controls. This section applies to all publicly traded companies, whether they are based in the US or overseas.
One aspect is to ensure proper accounting of all assets. This means companies have procedures in place to track assets and ensure proper reporting occurs in the financial statements. For example, companies may need to put in place policies and procedures for recording inventory levels, or for tracking the movement of equipment or other physical assets in order to meet regulatory compliance.
In addition, companies must disclose any material weaknesses in their internal controls over asset tracking. When a company does not properly account for their assets, you must disclose it to investors. If a company fails to comply with Section 404, it may be subject to heavy fines and its executives may face jail time.
What is Fixed Asset Inventory?
Fixed asset inventory is the process of tracking and accounting a company’s assets. Fixed assets are physical items in a company’s business operations and have a useful life of more than one year. Accuracy in your fixed asset inventory ensures regulatory compliance.
Fixed assets can include items such as buildings, machinery, equipment, vehicles, and furniture. In order to properly account for fixed assets, companies must put in place procedures for tracking their acquisition, use, and disposal. Asset tracking software is a tool that assists with these procedures and helping with regulatory compliance.
The fixed asset inventory process typically includes periodic physical counts of assets, as well as ongoing recording and monitoring of asset data. The data generates financial reports providing insight into a company’s fixed asset management. An accurate inventory of fixed assets is the core of solid financial reporting of corporate assets and assists with regulatory compliance.
Why is Fixed Asset Inventory Important?
Fixed asset inventory is important because it helps companies to track and account for their fixed assets properly, ensuring regulatory compliance. Information helps prepare financial statements and provide insights into a companies financial health.
In addition, improve decision-making about the acquisition, use, and disposal of these assets with accurate inventory of fixed assets. For example, if a company knows its machinery is aging, it may decide to invest in new equipment.
Finally, fixed asset inventory helps to prevent theft and fraud by tracking the location and movement of assets. Additionally, it helps with regulatory compliance and asset tracking.
Fixed Asset Inventory Procedures
Several best practices ensuring accuracy and completeness for regulatory compliance include:
- Physical Counts: count assets on a regular basis, such as once per year, and address discrepancies.
- Data Recording: record fixed asset data accurately and promptly. This data can include a complete history and audit trail of the assets.
By having proper asset tracking software, you can ensure accurate fixed asset inventory and assist with regulatory compliance. To learn more about how Sitehound can help you with your regulatory compliance and asset tracking needs, click here.