Why and How Should You Track Fixed Assets?
Why and How Should You Track Fixed Assets?
Sustainable growth is at the heart of any good business strategy. However, it is common for business owners to focus purely on increasing revenues. However, after a period of rapid growth, many look up to see that profit margins aren’t what they used to be! This happens more often than you might imagine. One contributing factor to a decreased margin is a lack of control over a growing network of assets. After all, for smaller businesses, tracking fixed assets is reasonably straightforward. As you achieve your goals it is important to be constantly looking for new ways to protect what you have built.
What Are Fixed Assets?
The generally accepted definition of a fixed asset is any item of value that business expects to own for more than a year. Top of the list are higher value items, like property, plant and equipment (PP&E). Assets including land, buildings, machinery, IT infrastructure and the like.
However, lower value items can also fall under the definition. The longevity of an item is what defines a fixed asset, not its value. For example, if a company buys some clothing rails and also stocks up on a popular line of dresses, the clothing rails are fixed assets, even though they are likely lower value. So, consumables and inventory do not count as fixed assets.
Why Should You Track Fixed Assets?
As businesses have become more reliant on technology, particularly the ‘Internet of Things’, tracking assets has become both more complicated and more crucial. This network of items forms the backbone of many modern organisations. However, over time, the integrity of this backbone can start to fail.
Effective asset tracking lets you:
- Keep track of what you own.
- Monitor who is in charge of equipment.
- Gain visibility of where your assets are at any given time.
- Create a database of maintenance points and other key information.
- Create a fixed asset register.
This visibility gives you the insight and control you need to make the decisions at the right time. Namely, the decisions that reduce the impact of depreciation as well as purchasing costs. Also, it is easy for items to get damaged or go missing without being able to track when and how.
How to Track Fixed Assets?
Asset management is an activity that has grown in sophistication over the last few years. Having said that, there are still a lot of companies relying on spreadsheets and other traditional methods of tracking. The biggest downfall of this method is that it is not scalable. It requires a lot of manual input and any automation is likely to break as the business grows. The big appeal of this approach is that it is often viewed as low cost. After all, all you need is access to a spreadsheet tool and a little know-how. For a business just starting out, investing in an expensive software and onboarding is an unappealing prospect.
This is totally understandable. However, this is often a false economy. Spreadsheets must grow in size, number and complexity as the company grows. This leaves more room for error and means you have to rely on certain employees to become experts on how they work. Additionally, it is not possible for spreadsheets to give you the real time insight into your equipment that you need to manage assets optimally.
Appropriate software is no longer as prohibitively expensive as it once was. Providers have long recognised the need to scale with you. Also, cloud computing has made access to tools more affordable and easier to manage as it is not necessary to upgrade in-house storage or run regular updates. Let’s take a more in depth look at how a fit-for-purpose SaaS solution tracks fixed assets.
This is at the core of any asset management strategy. Knowing where your equipment is at any given time lets you respond to issues as they happen. Not to mention that accurate tracking can be an invaluable means of optimising productivity and providing a better service to your end-user. It works by adding a tracking device to your assets which sends data back to you in real-time.
Although QR tags require a manual input, they are a simple and effective way of keeping track of assets. This is particularly effective for lower value assets which might not warrant a dedicated GPS device. This type of tracking facilitates an important element of a fixed asset management strategy. Namely, checking assets in and out. This makes it simple to spot if equipment goes missing.
This is a particularly effective way of updating your asset management database. Object recognition can recognise key information about an asset and automatically add it to your database with a photo. This can drastically reduce the amount of time required to gain true control over your fixed assets.
There are a range of other features that you can access through access management software. Every organisation is different, so it is important to work with a provider that can provide features that work for you.
How Can itemit Help With Asset Tracking
itemit is a cloud based, user friendly software that has been designed to be onboarded with minimal disruption. A simple to understand user-interface is what sets itemit apart. With itemit, you can leverage unrivalled, in depth insight with an intuitive interface. Gain total control of your fixed assets quickly and with minimum fuss. Just reach out to an asset management expert at firstname.lastname@example.org and find out how asset management can help secure the future of your business. Or, if you are ready to test the value of asset management software yourself, you can sign up for a no obligation 14 day trial.
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