It’s impossible to understate the importance of asset management compliance or the severity of the risks of non-compliance. Find out what you need to know.
Asset management compliance has become a critical priority for organisations. Failing to meet regulatory requirements, adhere to industry standards, or follow internal policies for effective asset management can lead to severe consequences such as costly penalties, brand reputation damage, and legal liabilities.
Learn more about the key regulatory requirements you need to consider for your organisation’s asset management practices.
The Importance of Asset Management Compliance
Asset management compliance is crucial as it ensures your organisation operates within the boundaries set by industry regulations and other relevant authorities. Compliance protects employees and your organisation’s operations, mitigates compliance risk, and safeguards against costly penalties and external monitoring processes such as audits for non-compliance.
A 2024 survey found that 68% of organisations in major UK industries are at risk of failing Health and Safety Executive (HSE) spot checks due to deficient asset management practices. 17% faced previous enforcement actions due to non-compliance. Of these, more than 10% received HSE fines.
Key Regulations and Standards
Asset management encompasses various areas of compliance, each critical to ensuring operational and financial integrity. These include operational compliance, which focuses on safety and efficiency in asset use, and financial compliance, which ensures accurate and transparent reporting. While the specific regulations and standards vary across industries and organisations, some of the most important include:
Operational Compliance:
- Compliance with Health and Safety Executive (HSE) requirements to ensure that assets are managed and maintained in ways that protect employees and the public.
- Adherence to industry-specific safety standards, which may include regular inspections, certifications, and preventive maintenance schedules.
Financial Compliance:
- Financial Reporting Standard 102 (FRS 102): This accounting standard is part of UK Generally Accepted Accounting Practice (UK GAAP) and governs the financial reporting of fixed assets, leases, and other financial instruments. Compliance with this standard is crucial for accurate and transparent financial reporting within the UK GAAP framework.
- International Financial Reporting Standards (IFRS): IFRS are a set of international accounting standards used for financial reporting. Organisations operating globally or listed on international stock exchanges must comply with IFRS.
Asset Management Compliance Challenges
Organisations face various challenges in meeting asset management compliance requirements. Among them are the interpreting of complex regulations, keeping track of changing standards, and managing large volumes of financial and other records. Handling manual compliance processes that can be affected by human error also poses a challenge.
Asset Management Solutions Help Ensure Compliance
Fixed asset management and accounting solutions from FMIS provide a comprehensive way of managing assets efficiently throughout their lifecycle. From inventory management to preventative maintenance, these tools can help your organisation streamline asset-related processes.
Incorporating features such as asset tracking, data security, flexible customisation, and a range of automated depreciation calculations, these robust solutions address compliance challenges by automating and standardising processes, reducing human errors, and providing real-time visibility into asset data. FMIS solutions can also help your organisation maintain compliance documentation standards and quickly adapt to regulatory changes.
By implementing these solutions, you can integrate compliance into your business processes, simplifying complex processes, reducing administrative tasks, providing detailed audit trails for all fixed asset transactions, and enhancing data accuracy.
Achieve Compliance with Powerful Solutions
Compliance is crucial for every organisation’s long-term success. Partner with trusted solutions provider FMIS to achieve compliance and optimise your asset management practices. With these powerful solutions in place, you can pave the way for operational excellence and sustainable growth.