What Goes Wrong Without Governance
These are not hypothetical scenarios. They are the documented consequences of managing procurement and assets through spreadsheets, email approvals, and manual registers. Each one is preventable.
59% of Indian organisations faced financial or economic fraud in the past 24 months. Procurement fraud is the number one threat for 50% of Indian businesses. 70% of ERP implementations fail to meet their original objectives. These are not edge cases — they are the norm for organisations without structured governance.
Sources: PwC Global Economic Crime Survey 2024 (India), Gartner
Audit and Compliance Failures
Auditor Qualified the Report for Fixed Asset Discrepancies
Assets in the register don't match physical reality. No verification process, informal movements, undocumented disposals. The auditor qualifies under CARO 2020 Clause 3(i). Loan covenants, insurance claims, and tax depreciation are all affected.
Purchases Made Without Proper Approval
Internal or statutory auditor found purchases that bypassed the approval process. POs issued without PR approval, purchases made without any PO, or approval obtained after the fact. Reported as an internal control weakness.
Tax and GST Consequences
GST ITC Reversed Because of Vendor GSTIN Issues
Claimed Input Tax Credit on purchases from a vendor whose registration was cancelled or whose GSTIN was incorrect. GSTR-2B reconciliation flagged the mismatch. ITC must be reversed with interest.
TDS Short Deduction Notice from Income Tax Department
Wrong TDS section applied, thresholds not tracked, deduction calculated manually at payment stage. Section 201/201(1A) notice with interest accruing at 1-1.5% per month.
Financial Losses
Paid a Vendor for Goods Never Received
Invoice paid without confirming receipt. No GRN matching, no gate entry inspection, no three-way matching. Discovered weeks later during reconciliation. Recovery is difficult and embarrassing.
Duplicate Payments to Vendors
Same invoice paid twice, or two invoices paid for the same delivery. No system to cross-reference PO, GRN, and invoice before releasing payment. Discovered during bank reconciliation — if at all.
Paying for Repairs on Equipment Still Under Warranty
Equipment repaired at company expense while still covered. Or AMC expired without renewal, and a single repair costs more than the annual premium would have. Nobody tracked the dates.
Asset Register Problems
Assets Lost or Stolen With No Record
During audit or verification, assets worth lakhs are missing. Nobody knows when they disappeared or who had custody. Ghost assets inflate the balance sheet and consume depreciation charges.
Insurance Claim Denied for Inadequate Asset Records
Fire, flood, or theft. The insurer asks for serial numbers, purchase dates, locations, and conditions. The organisation cannot produce reliable records. The claim is reduced or denied.
Asset Register Is a Mess — Where Do You Even Start?
Some assets exist physically but not in the register. Some are registered but missing. Some have old barcodes, some have nothing. Three Excel files maintained by different people with overlapping serial numbers.
Recognise Any of These?
If any of these scenarios sound familiar — or if you want to ensure they never happen — share a brief overview of your current situation. We will assess which governance gaps apply and what a structured approach would involve.