ERP (enterprise resource systems) are institutional systems that encompass Financials, HR/Pay, Budgeting, Reporting, Project Management, Asset Management, and other finance-related systems. Asset Management modules interface with payables and purchasing so that when a department makes a purchase, that transaction can be analyzed and flagged within certain expense codes to determine whether it should be capitalized and added as an asset.
Limitations of ERP in Detailed Asset Tracking
ERP Asset Management modules serve as the institution’s system of record, recording asset cost, calculating depreciation, and performing accounting transactions. ERPs play an essential role in capital asset programs in the following ways:
- System of record for assets
- Interfaces with Accounts Payable
- Depreciation calculations
- Chart filed information
- Funding sources
However, these modules have shortcomings related to maintaining asset physical information, location details, and recording verification data. Most ERPs do not have the ability to track which user last scanned an asset and the last inventory verification date. Institutions often have to customize ERP systems in order to track this information, which can lead to costly maintenance during upgrades and system implementations.
Tracking when an asset was last scanned is critical to fulfill compliance requirements such as the Uniform Guidance’s biennial inventory requirement, state statutes, and sponsored asset requirements. ERPs generally do not allow you to scan barcodes, RFID tags, take pictures or collect GPS coordinates like inventory systems can. The lack of ability to validate and maintain this information within the ERP system oftentimes leads to tracking of assets on various excel spreadsheets in a hodge podge manner. Because of these ERP limitations, it is common to see assets tracked in outdated legacy systems.
The Critical Role of Inventory Systems
Inventory systems that can interface with the most used ERPs will allow you to comply with all equipment compliance requirements, and house all asset data in a central repository system. Integration with financials, space management, and HR/Pay can provide valuable validation to maintain the integrity of asset data. Asset inventory software can streamline inventory processes by with these specific advantages:
- Inventory verification details
- Interfaces with Financials/ERP systems
- Ability to scan barcodes and RFID tags
- Ability to take pictures
- Ability to collect GPS coordinates
How ERP and Inventory Systems Work Together
Both ERP and inventory systems should be used in conjunction with one another to streamline processes, reduce errors, and optimize data for the institution.
By integrating ERP with specialized inventory systems, institutions can achieve a higher level of precision in asset tracking, enhance compliance with regulatory requirements, and simplify daily operations. This dual-system approach not only streamlines asset management but also ensures that every asset’s life cycle is meticulously documented and managed from acquisition to retirement.
Contact HCA Asset Management if you’re interested in elevating your institution’s asset management strategy.