A Definition of Asset Management
Asset management is a process for tracking and monitoring a company’s fixed and/or moveable assets for financial accounting, preventive maintenance, and theft deterrence purposes. Asset management is important for compliance and managing the bottom line, but it becomes especially complex for organizations with multiple locations, fleets, field service workers, or other complex asset situations. Effective asset tracking solutions are critical for efficient location monitoring, inventory counts, and oversight of maintenance, asset condition, and depreciation for high-value and business-critical assets.
Organizations may adopt asset management practices such as asset management software solutions, automated tracking methods with fixed scanners and bar codes, or asset tags with portable bar code readers that produce reports to help them manage their assets. Implementing effective asset management solutions while a company is small fosters seamless growth, particularly with the comprehensive, scalable solutions available today.
Challenges of Asset Management
Small companies and new organizations may overlook the need for comprehensive asset management solutions and delay implementation. In many such cases, these same organizations may find that they become overwhelmed with manual documentation and asset tracking processes as the company grows and accumulates a greater volume and variety of assets.
In some industries such as healthcare and government, regulations mandate that certain assets be carefully monitored and managed. Understanding industry regulations is essential for developing effective asset management programs that ensure ongoing regulatory compliance and selecting industry-specific asset tracking solutions that meet regulatory specifications.
In other industries such as utilities, regulations do not always dictate how assets should be tracked or managed. In these industries, however, it’s common that best practices recommend the use of comprehensive asset management programs to optimize performance, maintain consistent service levels, and manage overhead costs.
Beyond regulatory compliance, many organizations need to depreciate high-value assets, monitor the performance of equipment and machinery, be able to quickly locate parts and determine the last date of maintenance, among a multitude of other scenarios that make effective asset management a necessity for modern companies. Keeping track of various statuses and operational documentation across several different systems, documents, or applications makes it challenging to consolidate data for reporting.
In addition, failing to integrate data systems leaves missed opportunities for uncovering ways to optimize performance, enhance productivity, and boost the company’s bottom line. A centralized, comprehensive asset management program solves these challenges and offers a competitive advantage for today’s organizations through greater visibility and the ability to identify performance improvement and cost-cutting opportunities.
Benefits of Asset Management
When asset management is handled correctly, organizations reap the benefits. For example, organizations that correctly handle asset management realize the savings and see an increase in efficiency and productivity. Specifically, accurate asset management often yields substantial tax savings in depreciation deductions. Organizations that utilize asset management best practice also have an easier time complying with GASB 34 and GASB 35 standards.
Not only does proper asset management help companies to better control their finances and productivity and enable greater efficiency and profitability, but it also improves asset tracking and inventory procedures. For example, comprehensive asset management software systems collect information on fixed asset performance and integrate with company databases so inventory managers and asset managers can track assets and inventory separately yet compare procedures in warehouses. When asset and inventory barcodes work together, operations become smoother and accountability improves.
Asset Management Best Practices
There are quite a few things that organizations can do to better manage their assets. A few of the most important asset management best practices include…
- Using the best tools for the job – Top-notch asset management includes utilizing software to ensure the accuracy of your asset management and a streamlined process. Be sure that your asset management system is scalable so it can grow with your company.
- Relying on bar code labels that last for the life of the asset – To manage asset data accurately, it is important to use custom designed bar code labels and identification marks, along with tailored software and hardware solutions, to create an asset management program. Included in that program should be durable asset tags and bar code labels such as Camcode’s Rigid Metalphoto®Aluminum Asset Tags, which are high performing and remain readable for up to 20 years, even in harsh conditions. Camcode’s Rigid Metalphoto® Aluminum Asset Tags and other application-specific asset tags and barcode labels ensure efficiency, as they allow organizations to perform data acquisition more quickly and easily and result in increased productivity and reduced labor costs. Camcode’s bar code labels and asset tags are compatible for easy integration with leading asset management systems.
- Automating asset management processes – Adopting an asset management program, complete with durable bar code labels and asset tags and asset management tools including barcode scanners and software, facilitates a seamless, automated asset management process. The labels and tags include accurate information, and the readers and software virtually eliminate errors caused by manual data entry and collection.
- Eliminating ghost assets – Ghost assets are those that have been lost, stolen, or listed as unusable, yet they still are listed as an active fixed asset in the system. Companies with a high percentage of ghost assets often overpay taxes and insurance on those assets by up to 30%. Ghost assets don’t just hurt an organization’s bottom line, though. They also risk cause flaws in the accuracy of corporate financials and pose a threat to executives who are responsible for ensuring compliance with regulations. Finally, ghost assets result in lost productivity because missing and unusable assets are not available when they are needed.
Asset management enables greater visibility, accuracy, and reporting. Capturing accurate data with asset management systems as part of asset management programs helps organizations to streamline operations, improve finances, save on taxes, and improve their overall bottom line and productivity.
Image via Flickr by Gwan Kho
Recommended Reading on Asset Management
For more information on asset management, visit the following articles:
- Asset Management is the Foundation of LDAR Programs
- What are Asset Tags?
- Top Asset Tracking and Asset Management Conferences 2016: 50 Events to Learn the Latest Trends, Techniques in Asset Management
- Top Asset Tracking Software: The 52 Best Tools and Software Solutions to Track Your Company’s Vital Physical Assets