What Is Asset Tracking? How It Works and Advantages

Effective asset tracking is essential for organizations aiming to maintain control over their resources and optimize operational efficiency. 

This article explores the mechanics of asset tracking and its numerous benefits. By understanding how asset tracking works, businesses can significantly improve their asset visibility, streamline processes, and ensure regulatory compliance. 

Dive into the world of asset tracking to discover how this powerful tool can transform your organization's asset management practices and lead to substantial time and cost savings.

Main Takeaways From This Article:

• Asset tracking involves using technologies like RFID tags, and barcode scanning to monitor and manage an organization's physical assets, provide updates, and improve operational efficiency.
• Fixed assets are tangible items like machinery and vehicles, requiring regular maintenance and depreciation accounting. Intangible assets like patents and trademarks lack physical presence but need legal protection and amortization.
• Asset tracking enhances operational efficiency, reduces costs, updates records for tax calculations, locates assets, and automates tracking, ultimately maximizing ROI and ensuring compliance.
• Asset tracking benefits various sectors, including government, education, construction, healthcare, manufacturing, retail, warehousing, logistics, and hospitality, improving resource management and operational efficiency.
• RedBeam provides the perfect asset management system for enhanced tracking, data insights, and streamlined operations. 

What Is Asset Tracking?

Asset tracking is the process of monitoring and managing an organization's physical assets using asset-tracking devices and technologies like RFID tags, and barcodes. It enables accurate location and status updates of equipment, vehicles, and fixed inventory assets. This system helps prevent loss, optimize usage, and improve operational efficiency. 

Fixed vs. Intangible Assets

When discussing asset tracking, it's essential to distinguish between fixed and intangible assets. Understanding these differences can help businesses implement more effective tracking and management strategies.

Fixed Assets

These are tangible items that a company owns and uses in its operations to generate income. They have a physical presence and are typically long-term assets.

• Examples: Fixed assets include machinery, vehicles, buildings, and equipment. These items are essential for a business's day-to-day operations.
• Depreciation: Fixed assets lose value over time due to wear and tear. This depreciation is accounted for in financial statements and affects the overall value of the company's assets.
• Maintenance: Regular maintenance is required to keep fixed assets in good working condition, ensuring their longevity and optimal performance.
• Tracking Methods: Fixed assets are often tracked using asset tags, and barcodes. These methods provide accurate location and status updates, aiding in efficient management and utilization.

Intangible Assets

Unlike fixed assets, intangible assets do not have a physical presence. They represent non-physical resources that a company owns and uses to generate value.

• Examples: Intangible assets include patents, trademarks, copyrights, and goodwill. These assets are critical for a company's intellectual property and brand value.
• Valuation: Intangible assets can be challenging to value accurately. Their worth often depends on factors like market conditions and the company's future prospects.
• Amortization: Similar to depreciation for fixed assets, intangible assets undergo amortization. This process allocates the cost of the asset over its useful life.
• Protection: Intangible assets require legal protection to prevent unauthorized use or infringement. This includes registering patents and trademarks and enforcing copyrights.

10 Key Benefits of Asset Tracking

When implemented effectively, an asset-tracking solution can be highly beneficial for organizations. It helps improve a company's bottom line and minimize losses. Below, we will explore the myriad benefits of asset tracking and how it can help your business. 

1. Boosts Operational Efficiency

Implementing asset tracking enhances operational efficiency by streamlining inventory management and reducing manual processes. Accurate data allows for quick decision-making, minimizing downtime and increasing productivity. It ensures that assets are optimally utilized, preventing bottlenecks and improving overall workflow. This system also aids in scheduling maintenance, thereby prolonging asset life and reducing unexpected breakdowns. 

2. Reduces Costs

Asset tracking significantly reduces costs by providing detailed insights into asset utilization and maintenance needs. It helps avoid unnecessary purchases by efficiently managing existing assets. Monitoring prevents loss and theft, reducing replacement expenses. Maintenance logs lower repair costs and extend asset lifespan. Additionally, accurate tracking helps with better budgeting and forecasting and optimizes resource allocation. 

3. Updates Records for Tax and Cost Calculations

Keeping accurate records is crucial for tax reporting and cost calculations. Asset tracking systems automatically update records, ensuring precision in financial reporting. This helps in claiming accurate depreciation, leading to potential tax savings. Additionally, having up-to-date asset information simplifies auditing processes and improves compliance with regulatory requirements. 

4. Locates Assets Anytime, Anywhere

Asset tracking technology allows businesses to locate their assets within specified locations or buildings at any time. This visibility ensures quick retrieval and efficient use of equipment and resources. By logging the precise location of assets within your facilities, RedBeam reduces the time spent searching for assets. This capability is particularly beneficial for large-scale operations or businesses with multiple locations, ensuring that assets are always accounted for and easily accessible.

5. Automates Tracking With a Central System

Automating tracking with a central system simplifies asset management by providing a unified platform for monitoring all assets. This system reduces manual entry errors, saves time, and enhances data accuracy. Automation ensures timely updates and alerts for maintenance, renewals, and asset movements.

6. Minimizes Asset Loss and Improves Use

Asset tracking minimizes loss and enhances utilization by providing data on asset location and status. This visibility deters theft and unauthorized use, ensuring assets are used only by authorized personnel. Regular monitoring helps identify underutilized or idle assets, enabling better allocation and maximizing use. 

7. Scales With Company's Growth

As your company grows, so does the complexity of managing assets. Asset tracking systems are designed to scale with your business, accommodating an increasing number of assets without compromising efficiency. These systems can integrate with other business software, ensuring seamless operations. 

8. Enhances Customer Service

Asset tracking enhances customer service by ensuring timely and accurate delivery of products and services. Accurate data allows businesses to track the status and location of assets, improving scheduling and reducing delays. This reliability builds customer trust and satisfaction. Additionally, it helps promptly address customer inquiries and resolve issues, enhancing overall service quality. 

9. Ensures Accountability, Accuracy, and Compliance

Asset tracking ensures accountability, accuracy, and compliance by maintaining precise asset movements and usage records. This transparency holds employees accountable, reducing misuse and loss. Accurate data supports financial reporting and auditing processes, ensuring compliance with regulatory requirements.

10. Provides Accurate Asset Position Reporting

Accurate asset position reporting is crucial for effective asset management. Asset tracking systems provide data on the location of assets, ensuring position reporting. This information supports better decision-making, resource allocation, and operational planning. It helps quickly locate assets, reduce downtime, and improve efficiency.

11. Maximizes ROI

Asset tracking maximizes return on investment (ROI) by ensuring optimal utilization and maintenance of assets. Monitoring prevents loss, theft, and misuse, reducing replacement and repair costs. Efficient management extends asset lifespan, lowering capital expenditure on new assets. Accurate data supports better financial planning and resource allocation, enhancing overall operational efficiency.

Who Needs an Asset Tracking System?

Asset tracking is essential for any organization with fixed assets. Even companies with relatively few fixed assets can benefit from asset-tracking systems. 

Everything a company owns can be tracked, including:

• Machinery and equipment
• Furniture and fixtures
• Vehicles
• Office equipment
• Art and collectibles
• Library collections
• Medical equipment

List of organizations that benefit from asset-tracking systems:

Government

Government agencies use asset tracking to maintain accountability of public assets, ensuring they are used effectively and transparently. In emergency situations, asset tracking helps in the quick deployment and management of critical resources like vehicles, medical supplies, and equipment.

Public sector organizations can manage their budgets more efficiently by optimizing asset utilization and reducing losses, ensuring taxpayer money is well-spent.

Education

Schools and universities use asset tracking to manage resources like computers, laboratory equipment, and library books, ensuring they are available for students and staff. By optimizing the use of assets and preventing loss or theft, educational institutions can reduce replacement costs and allocate funds more effectively.

Asset tracking helps schedule regular maintenance of campus facilities and equipment, ensuring a safe and functional environment for learning.

Construction

Construction firms use asset tracking to monitor the location and usage of tools and heavy equipment, ensuring they are available at the right site. Regular construction equipment maintenance can be logged, reducing the risk of breakdowns and project delays.

Tracking of assets helps in better planning and execution of construction projects, ensuring resources are utilized efficiently.

Healthcare

Hospitals and clinics use asset tracking to manage medical equipment, ensuring critical devices are available for patient care when needed. Tracking systems help maintain compliance with healthcare regulations by ensuring equipment is regularly maintained and calibrated.

Asset tracking helps manage safety and security systems, as well as specialized equipment, preventing shortages and ensuring timely replenishment.

Manufacturing

Asset tracking helps monitor the location and status of machinery, tools, and raw materials, ensuring they are available when needed and thus minimizing production delays. Maintenance schedules can be logged, allowing you to track and review them, preventing unexpected breakdowns and ensuring equipment operates at peak efficiency.

Hospitality Industry

Hotels and resorts use asset tracking to manage inventory, such as linens, kitchen equipment, and furniture, ensuring availability and reducing losses. Regular maintenance of facilities and equipment can be tracked and logged, ensuring guest comfort and satisfaction.

By tracking asset usage and location, hospitality businesses can streamline operations, improve service delivery, and reduce costs.

Asset-tracking systems are invaluable across these varied sectors. They enhance operational efficiency, reduce costs, and improve overall asset management.

While some smaller businesses may attempt to manage without an asset tracking system, knowing the location of your tangible assets provides significant benefits for all companies. Mismanaging assets or relying on outdated information can severely impact any business's bottom line.

Methods for Tracking Assets

Tracking assets is essential for efficient management and optimization. This section will explore two primary methods, barcodes and RFID tags used to provide monitoring and control, enhancing asset utilization, security, and overall operational efficiency.

RFID Asset Tracking

RFID asset tracking uses Radio Frequency Identification technology to monitor and manage assets efficiently. Assets are attached to RFID tags, which contain electronically stored information. These tags communicate with RFID readers, providing asset location and status data. 

This method is particularly useful in large warehouses, healthcare facilities, and manufacturing plants, where managing numerous assets is critical. Benefits include reduced manual labor, improved inventory accuracy, enhanced security, and the ability to track assets, significantly boosting operational efficiency.

Barcode Asset Tracking

Barcode asset tracking is a cost-effective and straightforward method for managing assets. It involves attaching barcode labels to items and using barcode scanners to capture data. Each barcode contains unique information about the asset, such as its identification number, location, and status. Scanning these barcodes provides updates and streamlines inventory management. 

This method reduces human errors, improves accuracy, and speeds up the tracking process. Barcode asset tracking is widely used in various industries, including retail, healthcare, manufacturing, and logistics. It offers an efficient way to monitor and control assets, ensuring optimal utilization and security.

How Does Asset Tracking Software Help?

Asset tracking software is a comprehensive database for all asset information, such as item type, asset tag or barcode, age, condition, and current location. You can look up specific assets from a computer or mobile device, search asset records, or create new ones.

This software typically integrates with various types of asset tags. For example, if you use barcodes, scanners linked to the software can read or edit the asset record of the scanned item.

Choose an asset-tracking tool that tracks the specific data you need and is compatible with your other technology. Web-based tools provide access to data from anywhere and ensure you have the latest features.

Businesses must also consider the software's user-friendliness for employees. An intuitive interface on mobile devices or computers encourages consistent use by your team.

Your asset management software should integrate with your other tools for maximum efficiency. For example, RedBeam offers REST APIs for easy connectivity with other tools, custom fields, and time—and user-stamped history for updates. RedBeam also supports asset tracking across multiple locations.

Boost Asset Tracking Efficiency With RedBeam

Asset tracking is a vital component for any organization that seeks to maintain control over its valuable assets and improve overall operational efficiency. By implementing a robust asset tracking system, businesses can enjoy enhanced asset visibility, streamlined audit processes, and better compliance with regulatory standards.

RedBeam offers a comprehensive solution tailored to meet these needs. With its intuitive user interface and powerful features, RedBeam simplifies the process of tracking and managing your fixed assets. From fixed physical inventory and asset tagging to detailed history tracking and role-based access, RedBeam ensures you have complete visibility and control over your assets.

Don't let inefficient asset management hold your organization back. Experience the benefits of a unified, scalable platform designed to save you time and money. Try RedBeam today and see how easy asset tracking can be.

Try it now, or schedule a demo and take a decisive step towards smarter asset management.