What is Asset Identification? Methods, Asset ID Best Practices and Benefits

Posted by Mike Woods

Fixed Asset Market Manager

in Inventory Management

Updated June 26th, 2024

Table of Contents

• What is Asset Identification?
• Methods of Asset Identification
• Asset Identification Best Practices
• Benefits of Asset Identification
• A Final Word on Asset Identification

Asset identification is a critical process for organizations managing diverse physical assets, serving as the foundation for effective asset tracking and management systems. This essential practice involves assigning unique identifiers to both fixed and movable assets, enabling businesses to efficiently monitor, maintain, and account for their valuable resources.

In today’s fast-paced business environment, proper asset identification is crucial for several reasons. It helps companies maintain accurate inventory records, streamline maintenance schedules, ensure compliance with regulations, and prevent asset loss or theft.

By implementing robust asset identification methods, organizations can gain full visibility into their asset portfolio, leading to improved operational efficiency and cost-effectiveness

What is Asset Identification?

Asset identification is a critical process for any business because knowing which equipment you have is essential to being able to track it. If your assets are labeled incorrectly, or if you have duplicate labels, you risk facing compliance issues, falling behind with preventive maintenance, and putting your assets at risk of being stolen or lost.

Utilizing asset identification best practices with fixed and movable physical assets is the foundation of efficient asset tracking for your business.

Methods of Asset Identification

 The most common method of asset identification is asset tags. Also known as asset labels, asset tags can be used to identify a range of physical assets, including equipment, tools, racks, and machines.

These asset tags include serial numbers that serve as unique identification numbers. Asset tags may be made of foil, aluminum, premium polyester, or vinyl.

You can use asset tags to identify your assets. Barcodes also are assigned a unique identification number, which can be scanned into an asset tracking software solution with handheld scanners or mobile devices.

All of the asset data is contained within the program, empowering users to locate a specific asset quickly and easily. Some programs also include maintenance schedules, warranty information, and maintenance history for assets.

Radio Frequency Identification (RFID) asset tags also are an option for asset identification. Unlike barcode tags, RFID tags do not have to be directly in the line of sight of scanners to be detected because RFID readers send out radio waves detected by the antenna within the tag.

One disadvantage of RFID asset tags is their cost. Not only do RFID labels cost more than barcode labels, but RFID readers are more expensive than barcode scanners.

Asset Identification Best Practices

To maximize your fixed asset identification efforts, implement best practices across your organization. To be cost-effective, prioritize identifying high-value assets including those that depreciate. You also should identify moveable assets and those requiring regular maintenance, repairs, or replacement parts like equipment and machinery.

Thus, you should label IT hardware like computers and servers, audio-visual equipment like projectors, fixed assets, critical equipment like machines and tools, and furniture like desks and filing cabinets.

Another asset identification best practice is implementing an asset tracking solution. No matter which type of asset identification your company chooses to use, you will benefit from eliminating manual data entry that can be rife with error. Scanning automates processes and makes asset identification and tracking much more reliable and efficient.

Benefits of Asset Identification

Proper asset identification methods give your company full visibility into your assets when paired with an asset tracking solution. You will know where your assets are located, even if they are used outside your business. You also will have records of asset usage and movement.

With asset tags and an asset tracking solution, companies can note the condition of fixed assets to assist in scheduling maintenance, making purchases at appropriate times, and determining the value of your business more accurately.

Identifying and tracking your assets also makes it easier to report their depreciation. It makes more financial sense for you to depreciate the expense of fixed assets to account for their declining value than to report the entire cost of the asset in one year. When you track each fixed asset’s depreciation status, you file more accurate business tax returns.

A Final Word on Asset Identification

Asset identification is your first line of defense against stolen and lost assets. It also is the foundation of asset management and tracking efforts. That’s why it is so important for you to choose the right durable labels for your assets, from Foil Asset Labels for metal, plastic, textured, and contoured surfaces, to Rigid Metalphoto® Aluminum Asset Tags that can withstand harsh environments.