In most organizations, the gap between what the records indicate and what actually exists is significant. Examples include laptops held by former employees, measuring equipment at a closed site, or furniture moved between branches without being logged. This discrepancy typically surfaces only once a year—during physical inventory or an external audit. Consequently, the effectiveness of an asset and custody management system is measured by two key factors: its ability to pinpoint the location of every asset and its ability to prevent an asset from leaving the organization without being returned.

Why use barcodes specifically?

Manual inventory often fails because it relies on matching items by name. A "Dell laptop," for instance, could refer to any one of seven identical units; which specific one is it? A barcode or QR code affixed to the asset transforms its identity from a generic description into a unique, unambiguous number.

The difference in figures is striking: a two-person team conducting a manual inventory might process around 150 assets per day with a high error rate. That same team, using a barcode scanner or a mobile app, can inventory over 600 assets daily with a near-zero error rate, as scanning captures the asset, location, time, and responsible party in a single instant.

Steps for conducting an annual barcode-based inventory

Asset numbering and tagging: Assign a unique number to each asset and affix a barcode label made of material durable enough to withstand the asset's operating environment; standard paper labels are unsuitable for operational sites.
Building the master asset register: Include details such as description, serial number, purchase date, cost, useful life, location, responsible party, and cost center.
Defining locations: Branch, floor, room, or field site. Inventorying without specific location data fails to yield actionable information.
Scheduling the Inventory: Conduct the inventory when asset movement is halted, and suspend transfer requests during the scanning period.
Field Scanning: The team proceeds location by location, scanning every asset. The application records the assets present and immediately highlights those yet to be scanned.
Handling Discrepancies: Assets missing from their recorded locations are individually investigated: Was it moved without being logged? Is it undergoing maintenance? Is it lost?
Record Reconciliation and Report Approval: Adjustments are logged with documented evidence, and the final inventory report—detailing discrepancies and their causes—is approved.
Fikrat Al-Barmajiyah’s Asset and Custody Management software facilitates these steps via a central registry that documents every handover, receipt, or transfer—along with relevant attachments. This streamlines the inventory process and ensures the resulting report is audit-ready.

Archiving Inventory Documents

Signed inventory reports, disposal records, purchase invoices, and warranty certificates—these are all documents auditors may request years later. Storing them in desktop folders risks their loss. Linking each document to the specific asset within an electronic archiving system makes retrieving any asset’s file a simple matter of a single search.

Recovering Custody Items Upon End of Service

This is the stage where assets are most frequently lost, as management focus shifts to financial clearance. The solution is simple: do not issue a clearance certificate until the custody balance is zeroed out. Step

Responsible Party

Output

End-of-service notification

Human Resources

Automatically generated list of employee-assigned assets

Inspection of returned assets

Asset Officer

Verification of condition via photo and barcode scanning

Assessment of lost or damaged items

Asset Officer

Proposed deduction amount

Posting the deduction to the final settlement

Payroll

Documented deduction in the payroll register

Issuance of clearance

Human Resources

Clearance issued upon clearing the asset balance

Linking this process to the HR system automates it: once the end of service is recorded, an alert displaying the employee's asset list appears, and the clearance request remains pending until all asset items are accounted for. This simple integration solves the problem of asset loss more effectively than any written policy.

Key Performance Indicators (KPIs)

Asset record accuracy: Number of matching assets ÷ Total assets. Target: >98%.
Rate of assets returned at end of service: Target: 100%.
Inventory time: Number of working days to complete a full inventory.
Annual loss value: And its trend over the years.
Conclusion

A successful asset and custody management program is not measured by the visual appeal of its interface, but by its ability to answer two questions in a split second: Where is this asset right now? And who is responsible for it? By linking clearance to the clearing of asset balances, asset management transforms from a painful annual inventory process into an accurate, year-round record.

Q: Can the inventory process be performed via mobile phone? Q: Yes, the system allows for barcode scanning via the mobile app and enables the on-site recording of location, custodian, and status without the need for a dedicated scanner.

Q: How can we prevent the issuance of a clearance (end-of-service release) before the return of assigned assets?

Q: By linking the service termination process to the asset records; the clearance request cannot be finalized until all asset items assigned to the employee have been closed out.

Q: Does the system calculate depreciation?

Q: Yes, it records the useful life and depreciation method for each asset and generates periodic depreciation entries.

Contact us via the "Contact Us" page to build a barcode-tracked asset registry for your organization and experience a full on-site inventory process.