Fixed Asset Management 101: Best Practices for Success
The success of your organization depends on the people who make up that team. But to keep up with day-to-day operations, those people depend on a variety of assets like vehicles, computers, furniture, and machinery. Fixed asset management is your go-to process for keeping track of these essential assets, ensuring they're in tip-top shape and ready for your employees when they need them.
By implementing an asset management system, you can effortlessly track and monitor your fixed assets, oversee equipment and machinery in various locations, reduce maintenance costs, and boost operational efficiency. Plus, you'll have a record of retired, sold, stolen or lost assets at your fingertips.
Join us as we dig into the nitty-gritty of fixed asset management, revealing how your organization can optimize the monitoring of equipment and vehicles, evaluate their condition, and extend their lifetime value.
Say goodbye to lost inventory, equipment failures, and downtime, and hello to a more efficient, well-oiled machine.
What is a fixed asset?
In the world of business, there are two primary categories of assets: current and fixed (also known as non-current) assets. Fixed assets are the items a company acquires with the intent to generate revenue over an extended period, typically at least a year.
This sets them apart from current assets like accounts receivable and inventory, which are expected to be turned into funds within a year or less. By the way, cash is also considered a current asset.
Some common examples of tangible fixed assets are real estate, heavy machinery, computers, and vehicles. On the other hand, intangible fixed assets include things like copyrights, trademarks, patents, and other intellectual capital.
You'll often find tangible fixed assets listed as "Property, Plant, and Equipment" (PPE) on a company's balance sheet. Now that you've got a grasp on fixed assets, you can better understand how they play a role in a company's long-term success.
What is fixed asset management?
Fixed asset management is like being the guardian of your business's prized possessions - think of computers, vehicles, and other physical objects you consider valuable.
It's all about keeping an eye on these assets, monitoring their location, understanding their condition, and planning maintenance or repairs as needed.
Plus, you'll want to ensure that the cost of maintaining them isn't getting out of hand. Fixed asset management helps to increase operational efficiency and minimize unexpected costs while keeping a close watch on your assets, making sure nothing goes missing.
Some of the key tasks involved in fixed asset management include:
- Tracking your fixed assets
- Keeping tabs on their locations
- Reducing maintenance costs
- Boosting operational activities
- Recording assets to be aware of theft or losses
To make the process smooth and efficient, companies often use tools like computerized maintenance management systems (CMMS). This handy software solution automates fixed asset management, freeing up time for you to pay attention to other essential tasks.
Why is fixed asset management a critical business process?
Fixed asset management is super important for your business because it helps you make the most of your big-ticket investments, like servers, trucks, and elevators. You know, the stuff that can make up a big chunk of your total investment!
Managing these assets well means you can get the best value and highest return on investment.
Without it, you could face unplanned downtime, equipment failures, lost inventory, and even fines. Yikes! And don't forget that poor equipment can also affect the quality of your products or services, which can hurt customer satisfaction and your reputation.
It improves company safety
By keeping your machinery in tip-top shape, you're not only ensuring smooth operations but also reducing the risk of noncompliance with safety regulations. Who wants to deal with fines and lawsuits or potential damage to your company's reputation, right?
Now, imagine a well-maintained workspace where machinery hums along efficiently, and everyone can focus on their tasks with confidence.
This all becomes possible through regular maintenance, inspection, and tracking of your fixed assets. The result? A safer and more reliable environment that fosters productivity and employee satisfaction.
It drives business profitability
When it comes to boosting your bottom line, managing your fixed assets is crucial. Consider things like your buildings, equipment, and vehicles. They can be expensive, but they're vital for your business operations.
Now, imagine reducing the ongoing costs of maintaining these assets while also maximizing the income they generate. By effectively managing your fixed assets, you're on track to enjoy higher operating margins. This is especially true if your company has a large asset base.
To achieve this, keep an eye on things like maintenance schedules, depreciation, and even the eventual disposal of assets. By doing so, you can ensure they remain in tip-top shape and continue to bring in revenue.
It reduces equipment downtime
You know that feeling when your equipment breaks down unexpectedly, causing delays and increasing your expenses? Well, with proper fixed asset management, those moments can be a thing of the past.
By tracking and following maintenance schedules, you're taking a proactive approach to the care of your equipment. Staying on top of this can help you dodge unplanned downtime and keep those costly repairs at bay.
Helps you meet compliance regulations
Fixed asset management software ensures that you have accurate and up-to-date records of your assets, which is vital for tax and regulatory purposes. With it, you can efficiently calculate depreciation, avoid penalties, and optimize tax deductions.
This not only keeps the taxman happy but also leaves you feeling confident and in control.
Moreover, when you manage your assets effectively, you'll be able to comply with various financial reporting standards like GAAP, IFRS, or any other local accounting rules.
By staying in sync with these regulations, you'll safeguard your company's reputation and avoid any unforeseen issues.
Reduces loss and theft
When you've got a clear record of what you own and where it's located, it's much harder for things to go missing or get stolen.
Imagine this: You've implemented a smart fixed asset management system. Now, your assets are tagged with unique identifiers, and their locations are updated in real-time. This means you'll always know where everything is and who's responsible for it.
And guess what? Thieves and fraudsters are far less likely to target your organization when they know you've got your eye on the ball.
Plus, regular asset audits and inventory checks will help you spot any discrepancies early on, making it easier to investigate and address issues before they become costly problems.
How does fixed asset management software assist?
At its core, fixed asset management software is designed to help you monitor, track, and manage your physical assets. It provides a centralized database that stores all vital information about your fixed assets, from acquisition to disposal.
This ensures you always have up-to-date and accurate information at your fingertips.
Now, let's dive into the benefits! First and foremost, this software can save you time and effort by automating many tasks, such as calculating depreciation and generating reports. This means less manual work for you and more time to concentrate on what truly matters.
Moreover, fixed asset management software helps reduce errors that can occur when managing assets manually. With a centralized system in place, the risk of misplacing or misreporting data is significantly diminished.
Lastly, this software can improve your decision-making process by providing detailed analytics and insights. Armed with this information, you'll be better equipped to make strategic decisions about your assets, optimize their usage, and ensure compliance with financial regulations.
Provides a centralized location for asset tracking
We know that fixed assets have been in use for several years, and during that time, it's all too easy for crucial documents to go missing or become misplaced. But with a fixed asset management system, you can say goodbye to those headaches.
All your documents are kept safe and sound in one convenient place.
The benefits don't end there, though. When the time comes for an IRS audit, you'll want to be prepared. That means finding information about your fixed assets quickly and efficiently.
And with a well-organized fixed asset management solution in place, you can do just that. No more frantic searching or stress – just smooth sailing and a thumbs-up from the auditors.
Enables faster and stronger decision-making
You can simply track your assets, know their cost, and comprehend where they are in their life cycles with the help of effective fixed asset management. You can cut costs by avoiding pointless purchases.
Additionally, you have the choice of when to sell an asset, which might free up funds for fresh investments.
You can use this knowledge to swiftly and confidently make better-informed decisions.
Additionally, fixed asset management enables you to track the location of your assets so you can maximize their use.
By using this information, you can ensure that your future acquisition decisions are well-informed and in line with your company's objectives.
Saves time through process automation
When it comes to handling your fixed assets, you know it can be a hassle. Tracking their depreciation, accounting for leases, and making sure everything is accounted for can take up a lot of your time.
But supposing there was a way to automate these processes and save you time? Well, that's where fixed asset management software comes in.
By using this type of software, you can automate many of the time-consuming and error-prone procedures that come with managing your assets. The software takes care of depreciation calculations and lease accounting, so you don't have to spend hours crunching numbers.
Not only does this save you time, but it also increases accuracy. With the software doing the calculations, there's less room for user error, and you can have more confidence in the numbers you're reporting.
You may stay in compliance with accounting standards, health and safety laws, and other legal and regulatory obligations by keeping correct records of your fixed assets and making sure that they are appropriately maintained, repaired, and replaced.
By avoiding fines and penalties, you ultimately save time and money.
You may identify possible risks and hazards with the use of effective fixed asset management and then take the necessary precautions before they worsen.
For instance, performing routine equipment inspections can assist you in finding any problems that could endanger the safety of your workers.
Eliminates ghost assets
Ghost assets are those assets that you no longer hold or that have become unusable, yet they still appear in your company records. This means you might be paying taxes or insurance for assets that you don't even own!
Fortunately, there is a way to eliminate ghost assets from your records and prevent this unnecessary expense.
Fixed asset management is the solution you need. By using software that automatically records each step in an asset's life cycle, you can ensure that all assets are accounted for and that their status is always up-to-date.
Fixed asset management refers to the process of tracking and managing a company's physical assets, such as equipment, buildings, and vehicles, throughout their entire lifecycle.
It involves recording asset details, tracking their location and condition, and managing repairs and maintenance.
Fixed asset management has many advantages. Companies can guarantee that their assets are being utilized and not sitting idle, which helps cut expenses by accurately tracking their assets.
Additionally, it aids with audit trails and compliance, both of which are essential for fulfilling regulatory obligations. By providing information on which assets are the most valuable and which ones need to be upgraded or replaced, it can also help with decision-making.
RedBeam takes great pride in its collaboration with top-tier manufacturers and technology resellers in the asset tracking industry, including Zebra Technologies. Zebra's innovative technologies are integral to our asset tracking technology package, fully synchronized with RedBeam software. With Zebra's warranty, customers can rest assured that their hardware investment is safeguarded, while its advanced features dramatically enhance the speed and efficiency of asset tracking activities. As we specialize in Zebra products, we can offer customized hardware recommendations that match your specific business needs and budget.
Effective fixed asset management can also boost output and effectiveness, which eventually results in higher profits.
Ready to take control of your fixed assets and simplify your inventory tracking?
Schedule a free RedBeam demo today to see firsthand how asset tags can benefit your business. With our easy-to-use system, you'll always know when assets were purchased, how much they cost, and where they're located.
Don't miss out on the benefits of asset tracking - book your demo now!