As we know, fixed assets are long-term physical assets that used by a company in running their business. To run their business effectively and gain more profit, they need fixed asset management to maintain their assets well and ready to use. Most companies realize that managing assets is important, but they don’t really know how to manage it well. So, What is fixed asset management and how to improve it?
Read also: What Is a Fixed Asset?
What is Fixed Asset Management?
Fixed asset management refers to the systematic process of tracking, maintaining, and utilizing a company’s physical assets, such as buildings, equipment, and machinery.
This includes identifying and cataloging assets, determining their value, monitoring their use and condition, ensuring proper maintenance, and ultimately disposing of them when they reach the end of their useful life.
The goal of fixed asset management is to maximize the return on investment in these assets and ensure that they are being used efficiently and effectively.
What is Fixed Asset Tracking?
Asset tracking is a process that helps to monitor, manage and protect physical assets. It involves the use of specialized software and hardware to track fixed assets, such as computers, office furniture and other physical items.
This type of tracking ensures that all fixed assets are accounted for, so that they can be used efficiently. It also helps to identify potential risks associated with the ownership of these assets, such as theft or damage.
Asset tracking allows organizations to keep accurate records of their fixed assets and ensure they are properly utilized and protected. It also provides companies with valuable insights into the performance of their fixed asset investments.
What is Asset Maintenance?
Asset maintenance is the process of ensuring that a company’s fixed assets, such as buildings and machinery, remain in good working order. This type of maintenance is important because it helps to protect the company’s investments, reduce costs, and improve safety and productivity.
A good maintenance plan should include regular inspections to identify any potential problems, preventive maintenance to reduce the need for repairs, and corrective maintenance when needed.
Additionally, businesses should track the performance of their fixed assets so they can plan for replacement or upgrades when necessary. Overall, effective fixed asset maintenance is key to keeping a business running smoothly and efficiently.
What is Asset Utilizing?
Asset Utilizing is the process of leveraging fixed assets to generate income and increase productivity. This can be done through leasing, renting, or selling the fixed asset to another party with a contract that outlines how they are able to use it and any other stipulations.
Asset Utilizing also includes investing in new equipment or technology which can improve efficiency and reduce costs. Additionally, utilizing existing fixed assets can help reduce debt as these items typically have a longer lifespan than other types of investments.
By using the current resources available, businesses can maximize their profits and get better returns on their investments.
How To Manage Fixed Assets Effectively?
Here are some steps for managing fixed assets effectively:
- Identify and catalog assets: Create an accurate and up-to-date inventory of all fixed assets, including their descriptions, purchase dates, cost, and location.
- Determine asset value: Determine the value of each fixed asset, including depreciation and any other relevant costs.
- Monitor asset use and condition: Regularly inspect and assess the condition of fixed assets, keep track of their usage, and perform maintenance as needed.
- Assign responsibility: Assign specific individuals within the company to be responsible for fixed asset management and ensure that they have the necessary tools and resources to do their job effectively.
- Plan for replacement: Establish a schedule for replacing fixed assets as they reach the end of their useful life, and allocate the necessary budget and resources for this purpose.
- Implement controls and procedures: Establish procedures for recording changes in the status of fixed assets, such as transfers, disposals, and additions, to ensure that the asset inventory is accurate and up-to-date.
- Utilize technology: Implement a software system or app to assist with fixed asset management, such as tracking, reporting, and analyzing assets.
By following these steps, companies can effectively manage their fixed assets and ensure that they are being used efficiently and effectively to maximize their return on investment.
Why Is Fixed Asset Management Important?
Fixed asset management is one of the most important components of any business. It helps to track and manage assets in order to ensure that they are being used efficiently and effectively.
Simply, managing fixed assets is important for several reasons:
- Financial control: Fixed assets are often a significant part of a company’s total assets and can greatly impact its financial performance. Effective fixed asset management ensures that these assets are being used efficiently, reducing the risk of waste or misallocation of resources.
- Accurate financial reporting: Proper fixed asset management is essential for accurate financial reporting, including balance sheets and income statements. It helps companies accurately track the value of their assets over time and ensures that they are being reported correctly for tax and accounting purposes.
- Compliance with regulations: Fixed asset management helps companies comply with regulatory requirements, such as tax laws, which often have specific rules and regulations regarding the treatment of fixed assets.
- Improved asset utilization: Effective fixed asset management allows companies to monitor and optimize the use of their assets, ensuring that they are being used in the most efficient and cost-effective manner.
- Better decision-making: Accurate information about fixed assets is essential for informed decision-making. Effective fixed asset management provides the data and information needed to make informed decisions about the allocation of resources, replacement strategies, and other critical business decisions.
How to Improve Fixed Asset Management?
As we mentioned before, most companies realize that managing assets is important, but they don’t know the correct way to ensure their assets are maintained well. Here are some ways to improve it:
- Automate the process: Implement a fixed asset management software or app that can automate many of the manual processes involved in tracking and managing assets, such as tracking asset location, usage, and depreciation.
- Standardize processes: Establish standard operating procedures for fixed asset management to ensure consistency and accuracy in the tracking and reporting of assets.
- Regularly review and update asset records: Regularly review and update the inventory of fixed assets to ensure that it is accurate and up-to-date.
- Implement proper controls: Implement controls to ensure that assets are properly secured and accounted for, such as proper documentation, physical inventories, and access controls.
- Train personnel: Provide training to personnel responsible for fixed asset management to ensure that they understand the process and have the necessary skills to effectively manage assets.
- Collaborate with other departments: Collaborate with other departments, such as finance, accounting, and procurement, to ensure that everyone involved in the asset management process is working together effectively.
- Utilize technology: Utilize technology, such as barcode scanning, RFID, and GPS tracking, to improve the accuracy and efficiency of fixed asset management processes.
Fixed Asset Management software
Fixed asset management software is a type of software designed to help companies manage their fixed assets, such as buildings, equipment, and machinery. This software typically includes features such as:
- Asset tracking: Ability to track the location, status, and utilization of assets.
- Depreciation calculation: Automated calculation of depreciation for each asset, taking into account factors such as useful life, cost, and residual value.
- Financial reporting: Ability to generate financial reports, such as balance sheets and income statements, that accurately reflect the value of fixed assets.
- Maintenance management: Ability to schedule and track maintenance activities for assets, ensuring that they are properly maintained and functioning optimally.
- Mobile access: Ability for authorized personnel to access asset information using mobile devices, making it possible to manage assets from anywhere, at any time.
- Integration with other systems: Ability to integrate with other systems, such as financial and accounting systems, to streamline processes and improve efficiency.
TAG Samurai: Recommended Fixed Asset Management Software
TAG Samurai is a recommended fixed asset management with complete solution to manage your assets effectively. By using TAG Samurai, companies can improve the accuracy and efficiency of their fixed asset management processes, ensuring that their assets are being managed effectively and maximizing their return on investment.
TAG Samurai uses the latest technologies to simplify all of your asset management needs. TAG Samurai is equipped with QR Code and RFID technology to track your assets easily.
Furthermore, with the SaaS management console from TAG Samurai, you can manage all assets, calculate asset depreciation, and make a maintenance schedule from your PC or smartphone.
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