Indeed, transparency is one of the most important points for the success and credibility of non-profit organizations. After all, these entities depend on financial support from companies and individuals to stay operational and will hardly receive support without clarifying the destination of the donations received. To achieve this, there are numerous instruments that ensure transparency, such as asset tracking in the third sector.

Continue reading and learn more about the topic.

After all, what is asset tracking in the third sector?

Just like in companies and public agencies, asset tracking is also a common and crucial activity in the third sector.

The tool aims to manage the entire heritage of an institution, which is vital both for those who have their own profits, and also for those who depend on tax money or receive donations from third parties. When we mention asset management, we point to tangible assets such as machinery, office materials, equipment, real estate, vehicles, and intangible assets such as brand value and non-physical properties.

In addition to being useful for promoting the internal organization of the institution, as it acts in the constant monitoring of all inflows and outflows of the entity, asset tracking is also essential to ensure that the institution is compliant with the legislation, since the balance sheet is a accounting requirement for non-profit entities. In other words, this tool also offers greater security in accountability.

Another great advantage of asset tracking in the third sector is related to transparency in the use of resources raised through funders such as public agencies, companies, and individuals.

In this context, accountability to supporters is not only desirable, but mandatory in some cases.

How asset tracking works

First of all, to carry out asset tracking, it is necessary to develop an inventory of all the assets that the entity has at the moment, including details such as the characteristics, values, and positions of each object, in addition to the date and format in which they arrived at the entity (whether they were purchased or acquired through donation).

Within the inventory, the entity's assets in the possession of third parties must also be included, as well as third-party assets in the possession of the institution (these must be recorded in a specific accounting account).

Fixed asset control is another relevant instrument, directly linked to the balance sheet, having a role in tracking fixed assets such as vehicles, real estate, and equipment used in the execution of the institution's projects.

To do this, the entity should evaluate and measure factors such as the useful life and depreciation of each asset to understand the real value of everything that makes up its heritage.

In this way, when the inventory of assets and fixed asset control are presented correctly, the balance sheet is demonstrated much more securely.

However, for the process to be carried out properly, it is essential that the entity establishes an internal culture of care regarding asset tracking. After all, it is common for organizations to have considerable movement of assets and the absence of proper control can result in negative impacts that hinder progress.

Technology as an ally in asset tracking

As mentioned earlier, asset tracking is an indispensable action that requires security and efficiency. To ensure that everything is carried out and made available in the best way, technology can be an excellent partner. ERP software, for example, is a great ally to ensure the institution's control over all its operations on a single platform.

This type of solution provides numerous conveniences that simplify asset tracking, such as registering assets in the inventory, automatic depreciation calculation, plus optimized and customized queries.

If you want to discover how ERP software can help optimize your institution's processes, click here and contact the team of specialists at Codebit. Our team is available to offer complete services for your organization.

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