Both tangible and intangible assets are the backbone of your business. And you need to have an effective asset management program in place to get the best return on investment. That said, asset management can be quite challenging, especially when you have a big firm. It is super easy to lose track of your assets and run at a loss in the long run. Poor asset management may affect not only your client’s satisfaction but also have your business run into substantial operational costs.
You are going to learn useful asset management tips to help you run your business smoothly. But first things first, what is asset management?
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Definition of asset management.
Asset management is the process of keeping a track record of business assets in their various asset cycle stages to get the best ROI. The control starts when you buy the assets up until when you dispose of them.
Asset management focuses on both tangible and intangible assets. The physical assets are the properties you can see and touch. Examples of these assets are land, buildings, office equipment, e.t.c. Intangible assets are the properties you can not feel like intellectual property, financial assets, trademarks, and patents.
An asset manager is a person tasked with overseeing the management of assets. It can be a firm or an individual. The different types of asset management include public asset management, fixed asset management, financial asset management, IT asset management, infrastructure asset management, enterprise asset management, and digital asset management.
Why asset management is crucial to a business.
You want to save more time and money. Effective asset management is vital to your business survival. Below are some of the reasons why you need to invest in your asset management.
- Asset management can help you understand your asset’s different cycles and how they are used. This enables you to know how to utilize the assets in your day-to-day operations.
- It helps you keep a clean track of your financial statements.
- Proper asset management can help you cut down on costs and save more time.
- Additionally, active asset management can help you determine accurate depreciation values. Correct values make it easy when you want to sell your assets and get good returns on investment.
- Asset theft cases lower when you have a proper asset management strategy in place. This is because every asset is tracked, and its location and user(s) are in the records. The person in charge is responsible should anything happen to the asset.
- Talk of great efficiency. Asset management increases efficiency in business operations and saves more time. An asset management program helps you understand how to use the assets effectively.
- Effective asset management can also help you weed out ghost assets in your inventory. Ghost assets are those assets that are no longer in use but listed in the inventory documents.
5 Effective asset management tips.
1. Appoint a skilled person or a team to be in charge of your assets.
One of the most important factors to consider for any asset management is to get a skilled person on board. You need someone who understands asset management and has experience doing the same. If you have a small business, one or two people can help you manage your assets effectively. However, if you run a big company, having an expert team to handle asset management can help you. The skilled asset manager will be responsible for managing your assets and making sure that asset management best practices are put in place.
Additionally, to maximize your asset management success, you can invest in training your asset management team. The training can be once a year to acquaint your team with the current asset management trends and technology.
2. Write down your assets’ life cycle.
When you procure new assets, it is essential to record their life cycles. The asset life cycle helps you understand how to use them for the best ROI and when to sell/dispose of them off. Documenting the asset’s life cycle also can help you make better asset procurement decisions in the future. You will want to buy long-lasting assets than assets that have a short life cycle.
3. Identify your business’ needs.
Another excellent asset management tip is to identify your business’s needs before buying assets. Analyzing your company’s needs will help you get the needed assets and get the best returns. On the other hand, if you don’t have an apparent reason why you need certain assets, you will end up buying assets that will increase your operational costs and time.
4. Keep a track record of your assets.
Well, for effective asset management, there should be a consistent track record. Track each one of your assets and understand how they are used in different departments. You can track your assets routinely to identify missing assets and also assets that need replacement. Some of the things to put in your item’s track record include; item description, date of purchase, and cost of the asset, salvage value, and depreciation.
5. Always calculate your assets depreciation value.
Asset depreciation value comes in hand when you want to sell your assets or dispose of them. It is essential to calculate your assets depreciation value to help you in the final valuation process.
6. Use asset tracking software.
Using asset tracking software is also another excellent way to manage your assets effectively. There are both free and paid tools to help you with your asset management needs. Some of the free software include Zoho, Samsara, and asset panda. Using a tracking tool is efficient and cuts costs and saves you more time. Instead of you moving from one department to another hand-counting huge asset, use tracking software to locate your items.
Effective asset management for your business.
Having an effective asset management program in your business can save you more time and money. Understand how your assets perform and get rid of old assets.
Some of your assets might be working but slow down your employees’ productivity and performance. To optimize your business results, consider getting needed and essential items for your team.
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