By Robert Wilson – Manager IPWEA FLEET
How well do you know the assets that comprise your fleet? Generally, the first response is “we know our assets very well” – but is this really the case?
Inventory management is fundamental to the effective management of the fleet. You must know what you’ve got, where it is and who is responsible for it. Further, there is a base set of data that must be recorded describing the asset and associated attributes.
Finance Asset Register or Fleet Asset Register
Often management may consider that recording the plant item or vehicle in the financial asset register is sufficient. However, the financial asset register is primarily used for financial accounting and statutory reporting requirements. From a fleet management perspective, we need a management accounting approach. We need to understand the details of the individual assets in the fleet and be able to review and analyses associated cost drivers on an asset, group of assets, business unit, or total fleet basis.
What to record?
At a fundamental level the fleet asset register, or fleet inventory list, needs to record:
- Unique identifier, such as the fleet or asset number and the registration number for road registered assets
- Vehicle identification number (VIN)
- Description
- Category
- Make and model
- Custodian
- Usual or home location
- Capital cost
- Written down value
Having the asset register within a Fleet Management Information System enables a broad range of additional attributes to be associated with the asset, for example; year of manufacture, fuel type, warranty details and so on.
Keeping the asset register current
The asset register must be accurate and regarded as the single point of truth regarding the organisation’s fleet inventory. The application of audit processes over time provides confidence in the asset register’s accuracy. If the accuracy of an organisation’s asset register is dubious, then it is worth undertaking a physical audit to obtain the necessary data. These physical audits can be repeated periodically.
Once established, the asset register can also be checked as part of routine fleet management activities such as, re-registration or scheduled servicing.
As a further management tool, it is worth running a routine establishment report. This is not a review of the asset register as such, but rather a comparison of the organisation’s vehicle establishment (those vehicles that have been approved by the relevant authority for the organisation to acquire and hold) and the actual number of vehicles held. Differences in establishment and actual typically occur because vehicles have been retained after their replacement is delivered. This often occurs when a vehicle is held for a few months for a special project. However, if not actively managed the variance between approved and actual vehicles can fly under the radar and increase over time.
What do you call this?
One of the most common problems in fleet asset registers or inventory lists is the absence of a standardised naming convention, or nomenclature. So often we see utilities recorded variously as; utes, utilities, pick-up etc, or trucks recorded as med truck, medium truck, tipper, etc.
This lack of standardisation impedes reporting and analysis. Someone asks, “how many utes do we have?”. This should be a simple system generated report, however without a standardised description a lot of manual intervention is required – or worse, the wrong information is provided.
To help fleet operators address this issue, IPWEA FLEET has published a Fleet Asset Classification system. This is available to all IPWEA FLEET Subscribers.
The establishment and maintenance of a comprehensive and accurate fleet asset register is fundamental and critical to the management of an organisation’s fleet. It’s worth reviewing yours to see that it meets necessary standards.