5 silent losses companies discover only during audit, insurance claim, or theft
Introduction
Most companies believe their Fixed Asset Register (FAR) is accurate because it is updated in Excel or ERP.
But the truth is harsh:
✅ A FAR is not “correct” until it is physically verified.
And most errors remain hidden until something painful happens:
- Audit team raises a red flag
- Insurance claim gets delayed or rejected
- IT team reports missing assets
- A branch relocation happens and assets vanish
- Management asks: “How many laptops do we actually have?”
- Fixed Asset Register is Wrong in most companies until physical verification is done.
- Fixed Asset Register is Wrong when assets are shifted, scrapped, or replaced but the FAR is not updated.
That’s why we often say:
“Your FAR is wrong — you just haven’t found out yet.”
Fixed Asset Register is Wrong — Here’s What It Means
Why Fixed Asset Register is Wrong in Most Companies
1) Ghost Assets: “Books mein hai, ground pe nahi”
What it means
Assets appear in your FAR, but when your team tries to locate them physically — they don’t exist.
Real example
A company’s FAR showed 220 chairs on the 10th floor, but during physical verification only 198 were found.
The remaining 22 chairs were either scrapped, shifted, or never existed physically — but still depreciating in books.
✅ Result:
- Wrong depreciation
- Incorrect asset base
- Audit observations
- Possible fraud risk
This is not an Excel problem.
It is an evidence problem.
2) Missing Assets: “Ground pe hai, FAR mein nahi”
What it means
Assets exist physically, but they are not recorded in FAR properly (or recorded under wrong categories).
Relatable example
A finance team expects 60 routers & switches, but at site there are 75 installed.
Some were:
- replaced during maintenance
- procured under AMC/vendor supply
- temporarily installed but never captured in FAR
✅ Result:
- Incomplete capitalization
- Wrong asset ownership tracking
- IT audit issues
- Insurance coverage mismatch
3) Duplicate Assets: “Same asset counted twice”
What it means
Same asset is recorded multiple times due to:
- duplicate serial entry
- similar description
- same asset shifted location and re-entered
- vendor invoice mismatch
Example
Two entries:
- “Laptop Dell i5 8GB”
- “Dell Laptop i5”
Both entries refer to the same device, but appear as 2 separate assets.
✅ Result:
- inflated asset base
- wrong reconciliation
- audit mismatch
- higher insurance premium
4) Location mismatch: “Asset hai, but wrong floor/department”
This is one of the most common issues in corporate offices.
Real-life situation
During audit, finance says:
“Please show me this laptop assigned to HR Department.”
But the IT team says:
“This was shifted to Operations 3 months ago.”
And then admin says:
“It is currently with a new joinee.”
✅ Result:
- No one can prove the actual location
- Asset responsibility becomes unclear
- Audit evidence fails
This is where Option 2 hits hard:
✅ Audit is not the problem. Your evidence is.
Because audits don’t fail due to “asset tagging”.
Audits fail because proof is missing.
If your Fixed Asset Register is Wrong, audit evidence becomes weak and reconciliation fails.
Auditor asks:
- Photo proof?
- Tag scan history?
- Who verified it and when?
- Which location was captured?
- Can you show it on dashboard?
If your answer is only “Excel”, then it becomes a serious observation.
5) Condition mismatch: “Scrapped asset still running in FAR”
Many companies don’t update asset status properly:
- scrapped items remain in books
- broken items still recorded as active
- assets replaced but old ones still shown
Example
A printer was replaced last year, but old printer is still recorded and depreciating.
✅ Result:
- wrong book value
- wrong asset utilization reporting
- wrong financial decisions
🚨 The Most Painful One: Insurance Claim Rejected
This is where companies lose real money.
Scenario
An asset gets damaged in fire/water leakage or stolen.
Insurance team asks for proof:
✅ Asset tag number
✅ Purchase record
✅ Location evidence
✅ Asset photos
✅ Verification record
But the company only has:
- a generic Excel entry
- no photo
- no proof the asset existed at that location
And then the insurance team says:
“Claim is subject to verification & evidence.”
Sometimes it becomes:
❌ delay
❌ partial acceptance
❌ claim rejection
That’s why:
“Insurance is not rejected due to loss. It is rejected due to weak traceability.”
✅ Why “Customary Tagging” fails
Many companies do tagging like a formality:
- print stickers from Bartender
- paste tags
- scan with 2D scanner
- record in Excel
✅ Done.
But the missing part is the real value:
❌ No asset photo
❌ No geo location
❌ No condition capture
❌ No live status
❌ No reconciliation reports
❌ No audit trail
✅ What “Audit-Ready Asset Tagging” looks like
Audit-ready tagging means every asset has:
✅ Unique QR code ID
✅ Photographic evidence
✅ Serial/Make/Model validation
✅ Geo-tagging (optional as per environment)
✅ Floor/Department mapping
✅ Scan history
✅ Verification timestamp
✅ Exception list (pending, not found, inaccessible)
This is exactly what modern auditors and internal control teams want.
✅ How Tag My Assets solves this
With Tag My Assets, asset verification is not just pasting tags.
It is a complete digital control process:
✅ Tag printing from the system
✅ Scanning via mobile/web
✅ Capturing details in real time
✅ Photo and location evidence
✅ Floor-wise reconciliation dashboard
✅ Export to Excel / ERP integration
✅ Pending exceptions with reasons
So instead of saying:
❌ “Excel mein entry hai”
You can say:
✅ “Here is the scan + photo + verification proof + reconciliation report.”
✅ Who needs this most?
This solution is ideal for:
- Corporate offices & MNCs
- Manufacturing plants
- Hospitals & labs
- Warehouses & retail chains
- Facility management companies
- Internal audit / compliance teams
✅ Conclusion
If you haven’t physically verified your fixed assets recently,
then chances are your FAR is already wrong.
And the longer you wait, the higher the cost:
- audit observations
- insurance loss
- missing assets
- wrong depreciation
- compliance risk
✅ If you want audit-ready asset tagging with complete proof and reporting,
Tag My Assets can help you execute end-to-end verification smoothly.If your Fixed Asset Register is Wrong, the best solution is physical verification with QR tagging and audit-ready proof.
📩 Connect with us for a quick discussion / demo.
✅ FAQs
Q1. Why is Fixed Asset Register often incorrect?
Because most FARs are updated digitally but not verified physically, leading to ghost assets, missing assets and location mismatch.
Q2. What is ghost asset in fixed asset verification?
Ghost assets are those recorded in FAR but not physically found during verification.
Q3. Why Excel-based asset tagging is not audit-ready?
Because Excel cannot provide proof like photos, scan history, verification timestamp, condition, and reconciliation trail.
Q4. Can asset tagging help in insurance claims?
Yes. Proper tagging with traceable evidence (QR + photo + verification record) strengthens claim acceptance.
Q5. How often should a company do asset verification?
Ideally every year, and especially after relocation, expansions, mergers, or major purchases.
- Fixed Asset Tagging Services
✅ asset tagging services using QR codes
Link:https://tagmyassets.comcfixed-assets-tagging-sevices/ - Fixed Asset Management
✅ fixed asset lifecycle management
Link:https://tagmyassets.com/fixed-asset-management/ - Inventory Verification for Retail Chains (internal authority booster)
✅ inventory verification with reconciliation
Link:https://tagmyassets.com/inventory-verification-for-retail-chains/ - Contact Us (lead conversion)
✅ book a demo / connect with our team
Link:https://tagmyassets.com/contact-us/ - Blog page (helps crawl & engagement)
✅ read more asset verification insights
Link:https://tagmyassets.com/blog/ - Audit and Assurance Guidance
Link:https://www.icai.org/ - Insurance claim Documentation Requirements
Link:https://irdai.gov.in/ - Companies Act compliance Link:
https://www.mca.gov.in/
