Annual inventory in a company is an obligation resulting from current regulations. Thanks to the fixed asset register, the company can check the state of its assets for the needs related to accounting settlements. How will a professional RFID inventory system help in this? See for yourself that RFID systems in production and industry are the answer you have been waiting for a long time.
The recording of fixed assets and equipment involves the cyclical taking of an inventory of a company’s assets. Such a report, sometimes referred to as a physical inventory, is necessary for the accuracy of accounting documents and the correctness of settlements with the tax authorities.
Fixed asset records must be kept by all entrepreneurs, regardless of the form of accounting implemented.
In the case of simplified accounting, this obligation arises from the Decree of the Minister of Finance dated December 23, 2019 on keeping a tax book of income and expenses. According to §24 (1) of the Ordinance, taxpayers are required to prepare and enter in the book a physical inventory:
For businesses that keep books of account, the obligation to keep records of fixed assets arises from the provisions of the Accounting Law. According to Article 19 (1) of the Act, a list of assets and liabilities, confirmed by their inventory, shall be prepared by entities that have not previously kept books of account. With simplified accounting, a physical inventory is prepared regularly, as a rule, on January 1 of each fiscal year. The issue of inventory is different, the frequency of which varies from 1 year to as much as 4 years, depending on the scope and subject matter of the inventory. In the case of entities that keep books of account, the obligation will arise occasionally. Still, it must be carried out flawlessly, since the result of the inventory translates into the state of the accounting books and, at a later stage, the result of the financial statements.
“An inventory of fixed assets is necessary for a company to be able to control the state of its assets and keep reliable accounts.”
Manual preparation of a physical inventory is a cumbersome task with a high risk of error. Incorrectly conducted inventory carries penalties that will burden the manager of a given unit, since he is responsible for carrying out accounting duties. To avoid such situations, companies choose to use automated inventory using RFID technology. What is it actually?
RFID (Radio Frequency Identification) technology uses radio waves to transmit data. This enables fast and error-free identification of equipment items.
Unlike classic barcodes, RFID tags allow multiple data storage within a single token. This eliminates the risk associated with damage or wear and tear of the tag, and significantly extends its useful life.
Thanks to automation, it is possible to scan multiple (even dozens) tags simultaneously. This reduces to a minimum the time required to create fixed asset records.
However, it is worth remembering that the use of RFID inventory kit requires specialized knowledge, and its implementation in the company should be carried out by professionals. Only then will this technology work flawlessly.
In order to better understand the benefits of RFID technology, it is useful to learn about its principles and applications. Today, radio communicators are a standard in such industries as commerce, construction, manufacturing and industry. They allow identification of company assets, such as machinery and equipment, packaging, fixtures, materials and tools. This is a reliable way to verify and compare with each other the company’s assets at different periods.
The basis for the operation of RFID inventory systems are so-called tags. These are small tags made of durable material that store information about an asset. The latest generation ones are small enough to be hidden even in tape or packaging. Such a module is equipped with a memory bone and an antenna that receives the signal recorded by the reader, and sometimes also transmits it.
In order for a fast inventory to be possible, RFID tags must be selected and programmed with many external factors in mind. Specialists involved in the implementation of RFID technology in enterprises point out that geographic area, mounting area, weather conditions or tag reading range, among other things, matter.
“When mounting RFID tags on metal surfaces, special tags should be used to shield interference.”
In addition to properly programmed RFID tags, a radio inventory system needs two more components – a reader and software.
As for RFID readers, there are several types. The smallest are the so-called desktop readers. They can be used, for example, to confirm software access authorization or document identification. Their range generally does not exceed a few centimeters. For inventory of fixed assets, such as machinery or goods, mainly data collectors or industrial readers are used. They can capture tag data even from a distance of several meters.
It is worth remembering that RFID technology uses radio waves, so unlike mobile barcode scanners, there is no need to precisely aim the scanner at the tag. As a rule, wave propagation occurs without interference. However, they can occur, for example, when scanning metallic objects, which reflect the waves and cause interference. Data collectors resemble a cell phone with a handle. They are equipped with a liquid crystal screen that displays the information read, and a power cell that allows them to operate without being plugged in for many hours. The devices are based on specialized software, which then integrates with the company’s inventory software. The flow of information is very fast, so it takes a short time to record fixed assets using the RFID method. In order to coordinate the tagging of individual tags, all information must be entered into specialized software. Modern software usually works together with ERP software for enterprise asset management, which allows for a smooth flow of data from one register to another. The software allows, among other things:
Thanks to the exchange of information between the reader and the inventory program, the entrepreneur always has up-to-date information on the status of fixed assets.
An entrepreneur who decides to implement RFID technology in his company should plan his next steps well. This will allow him to smoothly implement new solutions without hampering internal processes. A good time is, for example, a time of reduced order volume, when the plant has more time for organizational work. Inventory of fixed assets using RFID technology consists of several stages.
The first is the labeling of individual assets by placing tags on them. These can be in the form of self-adhesive labels (labels) or encased tags equipped with a chip that records additional information about the object, among other things. An entrepreneur can print RFID self-adhesive labels himself, but a special printer is needed. Depending on the conditions under which the scanning will take place, you can opt for tags:
While in office work passive tags are completely sufficient, in a factory, where special care must be taken, it is worth investing in active tags. This will ensure that employees do not have to get close to working machinery.
“In places that are particularly exposed to moisture, dust, extreme temperatures or shocks, tags that are resistant to external factors should be used.”
The tags can be used both in the preparation of fixed asset records and during inventory taking, regardless of its type (full periodic, full continuous or random). In practice, most assets are tagged only once during their useful life, as RFID tags are very durable.
The second step is to create an inventory file. This is a document containing the most important information about the company’s assets. It used to be that directories were created in paper form. Today, the vast majority of companies are already using digital solutions. Many ERP programs allow you to create such a register. As a last resort, a simple spreadsheet will also work, which can later be imported into the program.
The next stage involves conducting a physical inventory using an inventory scanner. Unlike barcodes, tags do not need to be scanned very precisely. Simply position the scanner towards the tag so that the device collects the information stored in the tag’s memory. Once scanning is complete, the device generates a list of inventory differences. This makes it very easy to find out about shortages and their value. At the same time, the sheet contains the inventory numbers of the equipment, which will help determine its last location. The user also receives a list of assets after inventory, i.e. a list of all items recorded by the scanner.
After the inventory is completed, the data can be exported to an inventory program or an ERP/SAP system that works with it. In this way, all information about the entrepreneur’s status is always available “immediately”.
There is no shortage of inventory software on the market. Therefore, before implementing RFID technology, it is worth considering which software options are particularly important.
Ease of use is key. Intuitive software should have a clear interface with the possibility of its configuration. Thanks to this, using the software will not cause any difficulties for employees. It is also worth paying attention to the range of available options. They should cover all activities carried out as part of the inventory – from the possibility of integrating the software with ERP and mobile readers, through updating warehouse stocks, to generating summaries. The program should provide flexibility in terms of:
When choosing, it is worth making sure that the RFID inventory software works with mobile readers. This allows you to conduct a physical inventory using an inventory scanner without having to interrupt employees’ work or suspend production. The inventory is created during the continuous movement of the company. A useful convenience is the option of using the inventory program in a mobile version, on a smartphone or tablet. This is especially important when maintaining records of fixed assets in branches of the company, where there is no access to the central ERP.
For some entrepreneurs, the ability to choose between RFID tags and barcodes will also be important. This is especially true for companies that are gradually moving to radio inventory technology and do not want or cannot afford a one-time, large expense.
“Good inventory software is one that provides simple and trouble-free operation. You don’t always have to choose the most complicated solutions, it’s important that they are tailored to the needs of the company.”
The benefits of RFID inventory are hard to overestimate. Although the cost of implementing radio technology is higher than in the case of regular barcodes, the entrepreneur will very quickly notice an increase in productivity in the plant and a lower percentage of errors.
Comprehensive implementation of RFID technology in a company allows saving up to 90% of the time that was previously spent on inventory and creating records of fixed assets.
Using a scanner for inventory does not require precise aiming at the item or approaching it very closely. There is no need to scan each tag individually, as is the case with barcode labels. Labeling of components in a company is usually done once. RFID tags, even in the form of simple labels, are resistant to mechanical and chemical damage. They are successfully used in industry, agriculture and manufacturing plants. In a situation where the condition of a given asset changes, the data on the tag can be rewritten. This reduces the time and costs associated with ordering and programming another tag.
RFID technology virtually eliminates the risk of human error. Employees do not have to search for individual items, because multiple labels can be scanned simultaneously. The entire process is contactless, so it is possible to scan tags placed out of range, e.g. inside a package, outside a window or in a machine housing. Using the full potential of RFID requires optimizing business operations and connecting a number of links into one whole. However, once implemented, the system brings many tangible benefits to the entrepreneur.
