Asset management is usually defined as a process that develops, operates, maintains, and sells assets in a cost-effective manner. Every large business needs to keep track of its assets. They can play a central and significant role in how a firm operates.
By keeping track of assets or inventory, they can have accurate knowledge of what are the assets that are available and what can be utilised to provide the best returns. The weight of asset management for business operations should not be ignored.
It’s not just about counting
Many companies are understanding how much they can actually lose when it comes to productivity in case they do not update the way they track and manage assets. Asset management is much more than simply counting pieces of equipment and entering data into a spreadsheet.
Knowing more in-depth data about the value of an asset over its entire lifecycle helps businesses of all sizes save money spent per asset and can enable firms to get the most out of their assets.
By being aware of where exactly your assets are at all times, who actually has them and what their condition is, you can eliminate costly issues, as well as duplicate purchases or last-minute maintenance requirements. And having such data available to your employees at all times no matter where they are located is improving efficiency in how they are tracking valuable corporate assets.
Make sure you stay ahead of your competitors
Asset management is also helping a number of businesses stay ahead of their competitors. When you have implemented a truly powerful asset management system, you may focus your attention on other areas that can grow your production and business (like sales, customer service or marketing).
This knowledge can provide your firm with the upper hand, as well as a better outlook for the future. For firms that carry inventory to be sold, they can have real-time input of what items they have available, or when stock is getting low and it’s time to order more.
The last thing you want is your clients going to your competitors because you have run out of stock. Asset management can help ensure that this does not end up happening.
Enhance your productivity and workflow
Asset management has also been proven to help improve productivity and workflow, record losses in the case of a natural disaster, eliminate the occurrence of lost assets (known as ghost assets) and reduce employee theft. A good asset management enables more efficient planning within your firm and leaves workers more accountable and responsible. It’s a win for everyone.
If you are not yet convinced of the importance and impact of asset management, here are a few benefits that may sway you:
- Asset management will make it easier for companies of all sizes, across all verticals to keep track of assets. The members of your staff will know where the assets are, how they are being utilised, and whether there have been changes made to them. This is an enormous boost to the check in/check out process. Workers are held accountable whenever they use the asset, and the probability of them returning the asset on time and to the right place increases.
- Asset management helps identify risks that could arise from the use of certain assets. Maybe an asset is not performing as you expected, is not used at all, or is often breaking down and requiring repairs. Tracking assets over their lifecycle will help you make key financial decisions on in case an asset is a benefit or causing more financial harm to a business.
- Asset management eliminates those “ghost assets” in a firm’s inventory. There are many businesses that have instances where lost or stolen assets are still being recorded on their books. Asset management helps remove those non-existent assets and provides businesses and organizations with a real-time and precise view of what assets actually exist.
As discussed, keeping track of the assets of the firm is an essential task that can save businesses time and money. Asset management is a process that maximizes the assets of a firm to provide the best returns to stakeholders. It might involve asset recovery too.
Companies have a wide range of assets that can include fixed and liquid assets. It is key for a firm to be able to manage assets and ultimately use them to get the maximum possible returns. Summarising, here are the top reasons why asset management is crucial for businesses:
- It allows firms to keep track of all their assets. Asset management will allow the business or organization to keep track of all assets to the point where it can tell where the assets are located at all times, how they are being utilised, and when changes were made. The data from the asset management system will ensure that asset recovery will eventually lead to better returns.
- Manage assets from several locations in an accurate manner. The firm can easily create inventory reports that may be required by some lease financiers.
- Asset management can be utilized to ensure that the amortization rates are precise. Regular evaluations of assets will guarantee that the financial statements of the firm are accurate.
- Asset recovery is reflected in the asset management system. Once the assets are sold, these assets will automatically be removed from the records of the company. Related assets, such as spare parts, are sold to free storage space.
- It will save you money on maintenance. During the operational stage of the lifecycle of an asset, a firm can face over-maintenance issues. Maintenance is an expense that can cut into the profits of the business. Overdoing it can cause substantial costs. On the other hand, it can also cause under-maintenance and this can lead to reduced productivity.
- It generates more efficient operations. Asset management allows a business to understand the capabilities of assets, and how they can be operated in the most efficient manner.
- Allows the implementation of risk management plans. Asset management includes the management of risks connected with the usage of assets. A proper evaluation of the assets can help identify the involved risks, and come up with a solution to prevent them.
- Quality asset management will help optimize your operations such as planning, use of resources, and implementation of the management program.
- It can remove ghost assets from your inventory. There are times when items that have been lost are still in our inventory records. These are called ghost assets. Usually, ghost assets are items that have been mistakenly recorded.
- Using an asset management system, incidents of thefts are considerably lowered. Proper accounting of the asset recovery process will guarantee that the firm maximizes the returns with no items lost during this process.
As you can see, it is essential for a large company to deeply understand what is asset management and to implement a thorough asset management system. It can be very helpful in monitoring assets, and also in the asset recovery process.