Managing assets has been one of the biggest issues for organisations since it calls for managing a large volume of asset acquisition, management, transfer, and retirement. The complexity of daily operation, ongoing asset life extension efforts, and the need to move global assets across entities and organisations dictate the financial necessity of accurately capturing and reporting asset value. For small, medium, and bigger organisations, tracking the cost of an asset’s value over the course of the asset’s lifecycle within an ERP system has always been an issue. Financial reporting may be tedious, time-consuming, and difficult for asset managers.

This article’s goal is to give capabilities within ERP systems, particularly among the top ERP systems now on the market and used by several enterprises, namely Oracle, Microsoft, and SAP (S4). The voyage begins with the predetermined asset acquisition of an equipment with a unique serial number in the background. The asset is continuously monitored as it is placed under equipment for its performance, life expectancy till it reaches the residual life, and retirement plan. Most businesses will spend a substantial amount of money and time using the equipment refurbishing process to extend the life of their assets, adapt them to meet various needs, or move them within the business.

To add value, it is necessary to reevaluate the asset, and the system must be able to quickly and accurately capture the asset’s entire current value in order to increase organisational transparency and lower the cost of asset acquisition. Such a capability is provided by equipment and assets attached to serial numbers, which also lowers the need for manual tracking and time-consuming revaluation procedures.

This article describes how using built-in functions in ERP systems, the same result may be obtained with little effort.

current market

  • Tracking the life and value of assets, including the cost spent vs. depreciation, has typically been done manually in most ERP applications, particularly in older versions of the ERP system. The finance and asset management team spends a lot of unproductive time figuring out the transfer value of an asset when moving it between legal companies and for reporting on the financial value, and they are prone to making mistakes.

Modern ERP’s autonomous capabilities

Modern ERP systems allow for the coexistence of enterprise asset management and asset management, as well as their integration, to offer advanced procurement, track and trace capabilities from asset acquisition through performance and value addition to servicing. The capacity to track refurbishment orders and determine the anticipated and actual cost of repair, including labour, material, and time, is increased by tying the Asset to the Equipment. To calculate life expectancy, a history of asset performance and service hours can be recorded. To extend an asset’s life and lower its rate of depreciation, periodic maintenance can be arranged utilising inspection plans as advised by the OEM.

Assigning a serial number to an asset under equipment management enables the network to track many instances of the same item at different locations, such as those owned by the organisation, customers, subcontractors, vendors, etc.

By eliminating the need for Excel and other manual processes that are prone to error and supporting financial reporting, such robust integration automatically gives asset management the ability to track the asset’s life, cost of acquisition, depreciated value, and value-added portion of maintenance operations.

The aforementioned benefit is achievable in the majority of ERP systems and is relevant to all manufacturing, oil and field service, manufacturing, consumer packaged goods, and food and beverage industries. Leading companies in the F&B and CPG sectors have adopted this strategy and reaped the rewards in managing significant amounts of assets.

Solution Method:

Enterprise Asset Management equipment master records must be linked to the accounting for marketing, capital, project-related equipment, and tools. The necessary equipment master record ought to be generated automatically when these assets are created in Asset Management. For tracking and financial reporting, the asset and equipment records need to be connected one to one via serial number.
Costs associated with acquiring, overhauling, and other service charges must be taken into account when recalculating the asset value over time, taking into account the depreciation value as specified.
The capacity to automatically correlate landed costs, overhauling costs, and other costs with an asset through the use of a serial number and equipment gives users the ability to determine the current asset worth.
flowchart for a process

  1. Project System – to record and track spending
  2. Cost object: used to record the project’s work breakdown structure’s costs.
  3. Construction of a new asset is underway, and all associated costs are reported to the related AUC with reference to the WBS.
  4. AUC has been settled to a finished asset.
  5. Non-valuable asset material set up with a serial number and automatic machinery in the background.
  6. Asset Procurement – Started with the cost object and AUC and will record the procurement costs.
  7. Equipment cost: Is it captured using the supplier-negotiated purchase order price?
  8. Depreciation of assets is a time-based process that is based on Rule for asset depreciation
  9. Equipment overhaul is the practise of using maintenance to make necessary repairs or value additions.
  10. Asset value addition: When a maintenance order is settled, the repair costs associated with the equipment are recorded and added to the asset value.
  11. Asset transfer between entities is known as an intercompany transfer. Equipment with a serial number can be sent to the recipient organisation for full asset life cycle tracking.

Benefits to business:

Through the serial number and the connection between the asset and the equipment master, the entire end-to-end procedure is tracked.
Equipment and asset have a one-to-one relationship.

Trace and Follow
Possibility of giving an asset a serial number at the time of creation and connecting it to the equipment master record.
the capacity to settle AUC to an asset tied to a piece of equipment
Basic equipment characteristics can be specified for the equipment master record during asset creation.
The equipment master now has more qualities.

Financial disclosure
According to the requirements for financial reporting, any additional costs associated with upgrading the asset are recorded through a maintenance order, tracked by the serial number, and added to the asset value.
Depreciation can begin with the updated asset value once the asset has been transferred to the other legal entity.


This end-to-end procedure with the capacity to track and trace through the connection of equipment, assets, and serial numbers provides the ideal way to collect costs and pay the necessary expenses for the asset. The system has the accurate value for the intercompany transfer if the business decides to transfer the asset to another corporation. Additionally, it permits the receiving business to determine the accurate asset value, begin depreciation, and begin financial reporting.