The term ‘asset’ has several implications for every organization. It could refer to employees, hardware equipment, fixed assets, monetary assets, software tools, and more. In simple words, an asset is every single unit of equipment, machinery, property, or building that you own and use for business operations.
The quantity and type of assets you own don’t matter, what matters is that you need to take care of them on behalf of clients. According to PwC’s Asset Management, 2020 - A Brave New World, the volume of investable assets is expected to increase to $102 trillion by 2020 from about $64 trillion at present. This is a compound growth rate of approximately 6%. Such numbers and statistics further highlight the importance of fixed asset management for business growth.
With significant advancement in technology, you can effortlessly monitor and manage your assets. Fixed asset management software offers a variety of services which lead to the growth and sustainability of your business enterprise.
The more information you have about your assets, the more you will be able to control your operations. You will be able to make informed decisions that contribute to business growth. Here are 5 ways how asset management software can change your business:
1. Monitors the Physical Location of your Assets
Businesses still use age-old methods to manage check-in and check-out of their shared assets (laptops, vehicles, and mobile computers). Some organizations track off-site assets by placing a sign-out sheet on a clipboard. However, these practices are not full proof and a lot of times assets are not where they are supposed to be.
The two most common reasons for the loss of assets are theft and error. When fixed asset management best practices are put to use, both these factors are eliminated. You have a tracking system in place that monitors who checked out an asset, the date and time when it was checked out, where was it taken, and when is it expected to return.
2. Eliminates the Scope of Error
While physical tracking is one aspect, paperwork errors can also lead to significant problems. Even the most expert auditors and accountants can make mistakes. The research concludes that up to 90% of all spreadsheets have errors that impact their results and have caused large-scale losses to companies like Barclays bank, TransAlta, and JP Morgan. One wrong decimal or incorrectly hidden columns can result in inaccurate calculations and poor decision making.
Management software ensures that every asset - tangible or intangible, has a digital record with all the necessary information that cannot be hampered. Using spreadsheets for easy calculation and data recording is a thing of the past and you must now ditch it for a specialist fixed asset system.
3. Estimates Depreciation Correctly
The value of an asset begins to reduce over time until it has reached the end of its useful life. By estimating depreciation appropriately, you know when it is the right time to buy a new one.
Just like how business intelligence (BI) solutions for your company help you to manage and analyze data, a proper asset management system enables you to record all the required information for the accurate calculation of asset depreciation. The system also sends notifications informing you when your asset has reached the end of its useful life and when there is a need for routine maintenance.
4. Allows for Mobile and Cloud Computing
A majority of people are working on their mobile devices. The dependency on smartphones has increased tremendously, so much so that small businesses admit they would be lost without wireless technology.
Software used for asset management can also be accessed via mobile devices. Information is scanned and instantly synced with the centralized asset database providing on-the-go management. This is extremely beneficial for organizations as it allows them to save time and remove any errors that come with the use of a traditional computer.
The use of pen and paper for auditing fixed assets is time-consuming. Your records can become out of date before you can write or type them. Cloud computing ensures instantaneous updates, enabling managers and employees to feed, sync, and collaborate on the go.
5. Maintains continuity
There are two aspects of continuity. When you manage inventory manually, it takes a considerable amount of time. The count of items can even change by the time you finish the process of audit. In this aspect, asset management software helps to maintain continuity of inventory lists and audits.
The second consideration is continuity across personnel. In case personnel responsible for fixed asset inventory leaves for vacation or is shifted to another position, confusion will prevail as the new employee steps in.
A Side Effect of Conducting Business without Asset Management Software
If you don’t focus on your fixed asset management project, you will have a general ledger bogged down by ghost assets. Ghost assets refer to fixed assets that become unusable or go missing before they have been used optimally. While ghost assets cannot readily be identified, their absence can cumulatively add to devastate the company’s bottom line.