10 Reasons Your Organization Needs An Asset Management Systems
An asset management systems is a platform that helps your company monitor your assets such as investments, equipment, properties, and even vehicles. Contrary to common misconceptions, this kind of strategy not only works for companies that mainly rely on assets such as those in the real estate and transport sectors. Companies from a lot of industries, even small businesses, can benefit from this particular upgrade.
Whether you’re new to the world of asset management systems, or already have one in place, it never hurts to identify and understand the benefits of implementing this monitoring structure. To help improve your organization and streamline your processes, here are ten reasons why you need an asset management system:
1. Keep track of your assets with an asset management systems
As the main purpose of an asset management systems, having one in place lets you see where they are located. Furthermore, you can also check at a glance the status of these assets. Depending on the system you have, you can check whether these particular assets are currently in use or not, or if they have been updated or modified recently. This is particularly important for manufacturing companies that need to regularly monitor whether their machines all run the required product or if they’ve all been updated with the necessary firmware.
Not only does it protect your assets and give you a handle on their condition, but some systems available allow you to monitor their respective performances. Some asset management solutions allow you to integrate features for collecting data and your target market’s opinion, through metrics such as engagement or even conversion rates.
2. Align your financial records
Proper asset management keeps you updated on the payment status of each–such as amortization rates and schedule for each vehicle, machine, or any other asset you’re still paying– and keeps your financial records accurate. Furthermore, being regularly updated on this front means you don’t miss any of your payments, saving your company from fines and penalties from late or missed amortizations.
3. Streamlines operation
Eliminate the repetitive and tedious task of monitoring and inspecting your vehicles or other properties, especially if they’re located elsewhere. With asset tracking software, you can assign people, even the end-users themselves, to update the conditions of the assets in their care. It reduces the time it takes to assess the assets and the automated forms make it easier for the employees in various levels to see and appreciate the conditions of the equipment or material they’re working with. It ultimately reduces your lead time and lets your people focus on more important work.
4. Eliminate ghost assets
Regardless of what industry your company is in, ghost asset is a logistical nightmare whose effects can slow or even hinder your growth for years to come. These are simply defined as any asset listed in a general ledger, yet can no longer be accounted for.
Whether it’s physically unavailable (missing, misplaced, stolen, or entrusted to an employee no longer with the company) or simply no longer usable, ghost assets usually stem from misreported or unrecorded items. With an asset management system, you can easily monitor where it was last located or who last used it.
5. Helps your asset recovery efforts
5. Helps your asset recovery effortsWhen an asset reaches its end of life, companies usually have no choice but to let go of them. Asset recovery is an effort to make the most out of these materials, either by scrapping, selling, or other forms of divestment. With an asset management system, assets that are at their end-of-life are easily identified and once disposed of, can be easily updated.
This allows you to remove them from your books. It also helps you identify consumables and spare parts that were used for or together with the disposed asset–helping you free up storage, plan disposal procedures ahead of time, and prevent the creation of ghost assets.
6. Save on maintenance costs
It’s general knowledge that regular preventive maintenance programs are relatively cheaper than responsive repair efforts. Not only does it prevent otherwise avoidable downtime, which translates to lost revenue, but it also lets you save on parts by planning ahead of time.
If you can see which of your vehicles or machines are due for a parts replacement or even a routine checkup, you can plan ahead and skip additional fees that come with emergency repair works. More importantly, it lets you plan proper maintenance, avoiding the excess costs by overdoing it and the stress on the asset brought about by not doing it enough.
7. Supports risk management plan design and implementation
Risk management in businesses usually covers the evaluation of existing financial risks, forecasting, and projecting future financial plans. More importantly, it lets your organization plan ahead of an upcoming financial challenge. In terms of asset management, you can prevent being blindsided by assets suddenly breaking down due to wear or old age.
As your properties depreciate, you can take the necessary steps to make sure they won’t negatively affect your company. Whether it’s investing for a replacement or stockpiling repair kits, you can have a clearer, more detailed risk management plan with the risks in your assets clearly identified.
8. Reduce incidents of theft and fraud
Proper asset accounting, aided by an asset management platform, can help reduce incidents of theft and fraud. Being able to keep track of your assets’ movements minimizes the risks of items being stolen or lost at any time under your care.
A popular example of these solutions is one that’s being used in some trucking companies. They have integrated features that prevent malicious activities such as opening the trailer in locations other than the destination, tracking fuel consumption with respect to mileage, and even RFID-activated entry and exit. Not only does this prevent wrongful activities from their employees, but also alerts law-enforcement agencies in the event something untoward happens to their drivers and their trucks on the road.
9. Make insurance or lease financing easier
If you have assets located in different locations, it’s usually challenging to keep track of them individually. Even more challenging is the generation of inventory reports that are necessary if you’re filing or renewing your insurance plans. The same goes if you’re looking for financiers and an updated report on your organization’s assets is necessary.
Having asset management programs in your company makes it easier to comply with these requirements. More often than not, you only have to pull up a summarized report plus the individual reports as attachments–a feature included in some online systems today.
10. Helps in developing a budget
As it helps you track the condition and the payment status of each asset in your inventory, you can easily draft a budget. This is especially helpful for small businesses and startups, as the following months are crucial and every dollar you will be earning must be properly budgeted. If you know that your assets can be expected to work or run well for the foreseeable future, then you can start investing in other things. Otherwise, assets nearing their end of life will tell you when to divest and start looking for alternatives in advance.
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