Fixed assets account for a significant portion of a company’s investment, and every company want to maximize their return on investment(ROI). Buildings, computer equipment, computer software, furniture and fixtures, machinery, office equipment, and vehicles are examples of fixed assets, whereas patents, licenses, copyrights, land, leasehold goods, etc., are examples of intangible assets.
Asset management is crucial for increasing corporate efficiency and lowering procurement costs. Fixed assets are also crucial from an accounting standpoint, as they assist firms in claiming tax benefits by being recorded in the account book.
Asset Depreciation Greatly Affect Profits
Measuring fixed asset depreciation is critical for businesses to cut costs associated with managing assets like machinery, equipment, and cars. Depreciation is a method of calculating the diminishing worth of assets and assisting businesses in balancing their costs and revenues.
It is also beneficial in reducing tax liabilities. Depreciation costs cut into the organization's revenue, and less revenue means less tax paid. Business owners can determine whether to buy new assets or replace old ones by tracking asset depreciation.
Manual Fixed Asset Management Decreases Efficiency
High volume of data: Fixed asset management entails a great deal of documentation, and as the company grows, so does the volume of data. Managing a high volume of data is a difficult task for any business.
Lack of accountability: Moving assets to different locations or disposing of them is sometimes part of the asset management process. Any errors in registering this information can prevent the organization from effectively utilizing its assets.
Unplanned maintenance: The key to extending the life of assets is to stick to a regular maintenance schedule. Maintaining consistency with maintenance activities, on the other hand, is a big complication in asset management. Maintenance expenditures are typically significant for organizations that do not plan ahead.
More auditing time: Organizations that utilize spreadsheets for asset management are prone to making mistakes, which are simple to overlook. Auditor work can be complicated by higher error rates and inconsistencies in the asset management process.
The Benefit with Fixed Asset Management Software
Fixed asset management software automates the process of tracking assets through the various stages in the asset lifecycle, from acquisition through disposal. And saving employee time when it comes to inventory management, maintenance planning, project management, and accounting.
With the right asset management software, a business can improve efficiency and financial strength by maintaining its existing assets, while avoiding unnecessary equipment purchases and upgrades.
Extend the lifetime of equipment: Fixed asset management software lowers the asset’s depreciation rate and extends its life. Companies can plan and schedule maintenance and calibrations using asset management software.
Location tracking: A great fixed asset management software has location-tracking tools that allows businesses to keep track of where their assets are physically. It means that businesses can lower the danger of misplacing equipment and theft while also promptly locating the asset.
Detailed spend analysis: Companies are able to see how much money is spent on each asset. They can do a thorough study of the real costs incurred by the company in preserving its assets. They can also forecast future costs associated with asset maintenance, such as part replacement or refurbishment.
Cutting unnecessary costs: The best fixed asset management software can assist businesses in making new purchasing decisions. It gives them all of the information they need to prioritize their purchases and reduce unnecessary costs.
Centralized data: Having a centralized data collection for assets might be very useful when performing asset audits. The best fixed asset software simplifies and adds value to the auditing process. Furthermore, it can keep all of the data from the time of purchase to the present state of the asset.
Facilitate in calculating depreciation: For calculating depreciation rate, it is necessary to have the records of all the bills and invoices. The fixed asset management system allows users to maintain all the details of the financial documents.
Minimize human errors: by automating the asset management process, the business owner can reduce the risks of human errors and reduce labor costs.
Identification of “ghost” assets: Items that have been lost, stolen, or withdrawn from operation might stay on a company’s books if inventory and equipment are not properly monitored, severely impacting its tax status. The use of fixed asset management software reduces and eliminates these mistakes, allowing records to be kept in order.
Keeping track of your fixed asset can be very tiresome and difficult, and can cost a fortune for your company, if not done right. With the right fixed asset management software, you can improve efficiency and financial strength. Check out the super effective asset trackingsolution we offer and feel free to contact us for more information.