Asset tracking saves money, but only once the asset data has been collected and the asset register has been created. Then there is the challenge faced by asset managers of maintaining an accurate register. A company’s asset register is the foundation on which asset management procedures and controls are built. Initial procurement through to final disposal and everything in-between, many businesses struggle to keep their asset register up-to-date.
An asset register is important to many people in your organisation and is used for many purposes. Your asset tracking software can save you money, but only if there is a clear consensus between departments using the asset management data. If not, there is a risk that your asset register won’t meet your reporting requirements.
Benefits of an accurate and useful asset register
- Compliance – requirements of financial, safety, environmental and other regulators
- Preventing fraud – easily identify assets that have been lost or stolen
- Operational performance – assists with the identification and implementation of actions to improve cost reduction
- The correct value of assets – allows for the computation of depreciation and for tax and insurance purposes
- Maintenance – a business expense that can cut into the profits of the company. Overdoing it can bring significant costs. On the other hand, under-maintenance can lead to reduced productivity.
Define your ongoing goals
Understanding which business processes are important to you will lead to clearly defined goals, and these goals should be the structure of your asset register moving forward. And planning for some tangible metrics will help in evaluating success and lead to a return on investment if your asset register is in line with your important business processes.
Include an Asset Maintenance Plan
The basic premise of fixed asset management (other than location tracking and ownership) is to intervene at strategic points in an asset’s life-cycle to extend the expected service life, and thereby maintain asset performance.
An asset management plan assists businesses in managing their assets to an agreed standard of service. The plan should outline what needs to be invested in each of the asset classes in order to meet these defined service standards.
Inaccurate and incomplete asset data can have a devastating effect on asset decision-making.
Without accurate asset data, root cause analysis cannot be effectively triggered and prioritised. Incorrect asset condition data results in an inaccurate risk profile and poor replacement decisions being based on assumptions.
Keep it simple
Unnecessarily complex or impractical asset data structures can be the single biggest frustration in maintaining an asset register and extracting information for reporting. Effective asset management can only take place when an appropriate system is used to distinguish each asset as a separate item within the asset register.
Keep data up-to-date
When new assets are acquired, modifications are implemented or old assets are decommissioned, a fail-safe process needs to be in place to ensure that the asset register is updated. Conducting an annual asset verification exercise (audit) is critical to ensure that the asset register stays up to date. Asset auditing involves revisiting the assets to confirm the recorded asset data and update where required. This is where your asset tracking software saves you money.
Single source of truth
Multiple fixed asset registers and systems within your business and non-finance asset databases create inflexibility, merging data for reporting can be horrendous, especially if your systems do not integrate. Investing in ONE asset register accessed across departments and locations is the simplest solution.
By forsaking multiple systems the benefits are obvious
- Correct calculation of depreciation
- Forecasting profits and cash flow regarding asset maintenance, upgrades and replacements
- Integrated maintenance management and stock/inventory control
- Grow your business; financiers will generally require an up-to-date assets register
- Used as a tool to stay on top of and try to prevent theft of assets
- Succession/business exit planning and determining your business true value
- Accurate reporting; maximising deductions as far as obsolete or scrapped assets and maximising business valuation
- Enhanced customer service experience lowers your administrative time/costs
- Better asset utilisation through knowing where your assets are located
Success, preparation and planning is something we take very seriously
Our process for asset tracking software saves you money and has been developed through over 32 years of working on critical projects with organisations ranging from small business to a range of industries that have the highest requirement for governance and reliability. See our asset management services.