What is asset management?
It’s basically a simple, centralized way for you to monitor and manage your businesses’ assets. Buildings, plant machinery and equipment tools. In fact, anything that is tangible or intangible, can be managed from one central point.
Here are the Top 10 reasons why managing company assets is necessary.
1.Track Assets
Fixed asset management enables tracking of all assets that a company possesses. It can state the location of the assets, how they are used, and when changes have been made to them. The data derived from asset management ensures better returns and helps integrate asset recovery.
2.Easy Handling
Implementing fixed asset management helps accurately and efficiently manage company assets from different locations. The company can create an inventory report based on the data from asset management and use it to showcase to insurers or lease financers if needed.
3.Amortization Rates
Fixed asset management can also be employed to ensure the accuracy of the amortization rates. It enables the understanding of daily investment reviews to ensure consistency of the firm’s financial statements.
4.Asset Recovery
The recovery of assets is automatically reflected within a fixed asset management report. Once the assets are discarded or sold, the said assets are excluded from the company’s records and accounts. Different assets like spare parts and consumables are written off or traded for free storage space.
5.Save Money
Implementing fixed asset management techniques help your company save a substantial amount of money on maintenance. A business faces multiple repair or maintenance issues during the operating process of the asset’s life cycle. Maintenance is a regularly occurring business expense that can hamper the company’s profits. Overspending on maintenance carries considerable costs that can affect the overall financial stability of a company. Whereas the under maintenance of assets can lead to reduced productivity and efficacy.
6.Realize Capabilities
Fixed asset management makes daily operations of business more productive. Not only does fixed asset management allows a company to consider and realize its resource capabilities, but also facilitates efficient functioning of the same capabilities.
7.Risk Mitigation
Implementation of fixed asset management allows the formulation of risk management plans for a company. It also involves the handling of associated risks by proper use and maintenance of the company’s assets. Accurate fixed asset management reports help identify the risks involved and discovers solutions to mitigate them.
8.Achieve Efficacy
Fixed asset management, if properly implemented, can help optimize business activities like planning, resource utilization and implementation of managerial systems.
9.Ghost Assets
Usually, assets that have been lost or stolen can be found in the records of the company inventory. These are known as ghost assets. More often than not, ghost assets are items that get misreported. Implementation of structured fixed asset management helps in the removal of ghost assets from your company inventory and records of warehouse.
10.Lower Thefts
The use of fixed asset management helps minimize theft incidents. Also, the proper accounting involved in the process of asset recovery ensures that the business maximizes its profits without losing any assets during the process.
Implementing a fixed asset management program is essential to a company. It is useful for tracking assets and laying down a plan for asset recovery.
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