Any organization that utilizes asset tagging to manage physical assets needs a clearly defined, efficient process for tagging assets as they’re acquired and monitoring assets throughout their usable life. Below is an overview of the essential steps in the asset tagging process flow.
- Identify the asset type and category.
- Assign a unique identification number.
- Determine the type of asset label required.
- Enter the asset and all associated information in your asset tracking system.
- Affix asset tag to the item.
- Implement data verification processes.
Identify the Asset Type and Category
If you’ve already implemented an asset tracking system, you likely have a classification system, or schema, for assets including asset categories and types. If you’re implementing an asset tracking system for the first time, creating this categorization system is an essential step to ensure consistent categorization over time. Assets may be grouped by department, cost, use, or any number of other variables.
You may want to choose a categorization method that aligns with the process used to categorize assets for accounting purposes. Even though your accounting system includes both tangible and intangible assets and your asset tagging process relates only to tangible assets, ensuring that your physical asset classification matches your accounting methodology allows for simpler integration and reporting.
Screenshot via Corporate Finance Institute
Here are a few examples of physical asset categories:
- IT equipment (computers, laptops)
- Audio-visual equipment
- Technical equipment (power supplies, air conditioning units)
Assign a Unique Identification Number
Beyond categorizing assets and classifying them by type, each asset should have a unique identification number for accurate tracking. This unique ID distinguishes individual assets from other assets of the same category and type, making it easier to manage processes such as reordering, maintenance, and accounting.
Unique identification numbers may contain coding that indicates an asset’s type or department of ownership. For example, assets controlled by the HR department may contain a prefix such as 013, while assets controlled by accounting have a prefix of 014. This method makes it easy to determine important information about an asset simply by looking at the tag, while more detailed information is a barcode scan away.
Determine the Type of Asset Label Required
Asset labels and tags are not a one-size-fits-all solution. There are a variety of asset labels and tags designed to suit specific applications, such as durable asset tags for assets that may be exposed to harsh conditions or security asset tags for high-value assets that may be subject to theft, unauthorized transfer, or tampering. Consider the asset’s category and type, as well as the environmental conditions the asset will be exposed to. Will the asset be cleaned using harsh cleaning solutions? Will it be exposed to chemicals or solvents? Will it be exposed to outdoor weather conditions? All of these factors should be weighed when determining the best asset label for each asset.
Enter the Asset and Associated Information into Your Asset Tracking System
Assets should be entered into the system immediately after they’re received. To streamline this process, it’s helpful to have written process documentation outlining when assets should be tagged, how they’re categorized, what types of asset labels to request for certain asset types, and procedures for data entry. For example, the University of Washington has a Tagging Procedure document that provides specific information on the process flow. Data entry requirements may vary by asset category and type. In general, data entered into an asset tracking system includes:
- Asset identification number
- Serial or model numbers
- Manufacturer or vendor information
- Date of acquisition
- Location or department of ownership
- Asset value
Affix the Asset Tag to the Item
Attachment methods vary based on the type of asset and label type. Some asset tags use pressure-sensitive adhesive, while others have mechanical attachments. Some asset tags offer both attachment methods. If you have the option of adhesive or mechanical attachments, choose the method most appropriate for the asset or the method required per company policy.
Implement Data Verification Processes
Verify assets from a minimum of two data points, such as the barcode and the item’s serial number. When disposing of assets, this step is crucial to ensure an “accurate and verifiable chain of custody,” which can help to mitigate data breaches (particularly for the disposal of IT assets) and also help to maintain compliance with regulations.
Implementing a consistent asset tagging process flow ensures that all assets received by your company are consistently classified and tracked, making it easy to locate assets throughout the company, implement regular maintenance schedules, and maintain accurate record-keeping for auditing and accounting purposes. Developing clear policies and procedures and training your team members on approved asset tagging procedures streamlines processes and can ultimately have a positive impact on your bottom line, allowing you to improve resource utilization, reduce unnecessary duplication of assets, and get more usable life out of your investments.