What is an asset management system?
Assets are resources owned by organizations with the expectation of cash inflows. A few common types of assets include current, non-current, physical and intangible. The key to business progress is to correctly identify and classify its tools into one of these categories. Following from this, asset management refers to a system which closely monitors business valuables that are defined by a specific set of rules. In order to do this, companies often outline strategies to develop, operate, upgrade and dispose of assets in the most cost-effective manner possible. The ultimate goal behind this is to maximize the rate of return on investment and raise the overall level of productivity.
What does an asset management system entail?
An asset management system allows you to carry out a variety of operations. It helps you to boost the performance of your capital resources. Depending on the frequency of use, you can devise a suitable organizational plan for all your tools. Once you decide the nature of your workflows, it becomes easier to set up and assign assets for service.
Here are a few features that companies can benefit from through a robust tracking system:
1. Ability to tag assets with labels
The first step towards asset management is to devise a system that can label all your tools in a precise manner. Contingent upon the nature of your assets, you can choose specific types of tags. You can easily do this when you opt for a robust asset management system to track and record daily resource utilization. Generally, most companies use unique identification numbers to denote different tools. A label designer lets you create tags of various sizes, shapes, and formats. This is how you can make your barcodes comprehensive for easy retrieval.
Having your labels tagged allows you to closely monitor consumption through regularly updated usage records. By using the barcodes stamped on the back of your assets, you enable your employees to simply scan them to get information from the database. Detailed tags are extremely helpful when it comes to warehouse management. Users simply have to refer to their database to figure out where a certain item is stored. In such a way, barcode tagging enables you to an extra layer of security to keep your tools safe.
2. Check-in and checkout system
Once you label all your assets, you can easily set up a check-in and checkout system. This mainly requires employees to scan tags into a system before they take an item out for use. By carrying out this practice, you can record the time and location of the tools being borrowed. This practice lets you control loss through misplacement and theft. It helps you minimize costs involved with stolen items. In cases of misuse, you can always track the person responsible through documented checkout history.
Accurate data on usage gives you the opportunity to effectively manage assets. This is done with changing ownership by recording custodian location. Doing this also allows you to associate transactions and track progress on various projects. Being a simple process, the check-in and checkout system lets you verify current assets in use. You can also find out the status of all your tools. This makes it easier to reserve assets for future events as needed.
3. Maintenance and repairs
To achieve successful execution of daily work operations, you need to keep your assets in good shape. This is important if you want to avoid unexpected downtime. Untimely malfunctions can lead to delays and excessive repair costs if not dealt with in the correct manner. For this reason, a streamlined asset management system lets you design regular service sessions for your equipment. By using this program, you can set up tools for maintenance as soon as you purchase them. Once that’s done, you can send out notifications and alert employees so that alternate arrangements can be made.
Here are a few benefits of implementing a preventive maintenance program:
- Lower lost production time: If your tools are set up for recurring services, this means they are being checked for potential breakdowns on a frequent basis. This reduces chances of loss in productivity.
- Improved safety: Organizations which exercise predictive maintenance tend to address problems before they actually occur. This makes it safer for employees to work with equipment.
- Increased revenue: Equipment less prone to downtime is able to perform at optimal levels thereby increasing the overall rate of investment.
4. Procurement and depreciation reports
The key to optimized asset utilization lies in effective stock management. This means a well thought out procurement plan is required to replenish inventory when needed. First of all, you need to gather the usage trends of your organization. Then, lay down minimum threshold levels after which purchase orders will be generated. Automation in procedures ensures that companies don’t face scenarios like understock or overstock.
Did you know? The number of firms not looking at supply chain automation dropped from 40% to just 17% in 2018.
Another important factor to consider in asset management is depreciation. Your chosen system makes this easier for you and allows you to run devaluation reports. Doing this gives you a fair estimate of the useful life of an asset and lets you set up procurement orders as well. Accounting for wear and tear is critical when it comes to financial records and helps firms adjust costs.
5. Running reports
A smart business move would be to analyze the progress made so far. This can be applied in the case of capital investments including different types of assets as well. A substantial part of robust asset management system relies on precise reporting. With the help of barcode scanning and rigorous check-ins and checkouts, companies can register all asset movements under a single database. By using this information, organizations can then prepare factual reports. This data can also be used to provide valuable insights into asset utilization.
What are some tips to get the most out of this system?
– Know how to tag assets: The first thing you need to do before you start labeling your assets is to decide how to go about it? There are numerous various types of tools deployed in your inventory and each of them requires a special kind of a label. After referring to the concerned departments, you shortlist the list of assets you want to tag. These are mostly the ones at high risk of misplacement – used most frequently across locations. Next, you need to decide what you put on your asset tags. Traditionally, firms use a serial number, GPS location, and IP address to mark specific items.
Assets are oftentimes designated for particular work tasks. For this very reason, firms tend to choose the appropriate label to put on their tools. Barcode, QR codes, and RFID tags are a few options to select from. Each label serves a different purpose as well. Tamper-evident labels are highly recommended for valuable assets, whereas two-part asset labels are durable and are suggested for mobile goods. The last step revolves around adding customization to your tags to make them more comprehensive and reliable. You can even color code asset labels to simplify things. The aim should be to create tags which increase efficiency and can last the entire business year.
Learn more: Asset tagging best practices
– Create customized maintenance plans and follow through: Companies commonly adopt maintenance guidelines laid down by the American National Standards Institute to help achieve higher ROI’s. These types of programs are highly beneficial for firms working with complex equipment. In addition to this, workflows which are time-sensitive need access to fully functioning tools at all times. In order to implement a robust preventive maintenance schedule, it is critical that you create a customized checklist which entails the following:
- Process oriented: Catering to individual tool requirements means that you need to define suitable strategies which must be followed through at all times. This can be done by laying down yearly maintenance programs for various equipment types.
- Frequently updated: Following an excellent maintenance routine is useless if you don’t document it anywhere. As soon as you check-in your assets for repair session, you should record the cause of failures so that it can be dealt with successfully.
- Know your purpose: There can be no end without an aim to achieve. Same goes for businesses trying to devise maintenance timetables. The first thing you need to decide is which machines are required to have a certain level of uptime during the first year. After that’s done, you can design your checklists to attain that level.
Maintenance checklists usually deal with interiors, exteriors, HVAC, and safety equipment. The best way to optimize these resources is to follow through with clearly defined service checklists.
Did you know? The average time spent on scheduled maintenance is 19 hours per week according to Plan Engineering 2017 Maintenance Study.
Learn more: Preventive maintenance checklists
– Know the value of assets and know when to retire them: Firms practice fixed asset accounting to maintain accurate financial records on different types of tools. Carrying out this practice allows your company to closely monitor procurement, disposal, and depreciation. In order to do this, organizations need to lay down a few rules on how to value and devalue their assets. The majority of companies list assets under cash flow statements (or investments). Since assets are subject to constant use in daily work tasks, their value tends to decline along the years. When it comes to recording fixed assets in your ledgers, it can be done in the following three ways:
- Periodic depreciation (applied to tangible assets)
- Amortization (applied to intangible assets)
Keeping your records organized is as important as is how to maintain them. An asset management system allows you to set thresholds for capitalization. This makes it easier to distinguish between expense and cash inflow items. Needless to say, automated programs have a higher chance to increase efficiency and let you record error-free asset data.
When it comes to disposal, you need to opt for the most appropriate depreciation method. Lack of vigilance can cause organizations to end up with incorrect financial records. To avoid such unwanted situations, it is essential that you classify assets as per their usage, durability and expected life.
Learn more: Best practices for fixed asset accounting
– Optimize stock management with inventory control modules: It is quite common for organizations to overlook the negative consequences of poor stock management. Running low on assets is a cause for concern which can pull down your overall production. A sophisticated asset management system can help companies categorize inventory according to its usage by creating customized templates. This makes it easier for employees to retrieve inventory items from the warehouse.
Oftentimes, asset management systems endorse different technologies to speed up the checkout processes. For instance, you can opt for RFID tracking to scan multiple inventory items at once. Such practices come in extremely handy especially dealing with large incoming shipments. A smart way to control inventory procurement is to review usage history. You can do this by generating reports on tool utilization to forecast future demand. Doing this allows you to deal with the fluctuations in market trends.
Learn more: Inventory control with asset management software
– Choose a cloud-based program to achieve higher efficiency levels: Selecting an asset management system is very straightforward if you have clearly defined your business goals and objectives. Most of the times, firms tend to opt for a cloud-based program. This mainly happens because of the increased flexibility and security a company can enjoy while having its data stored online. By using this feature, firms can easily scale up in times of expansion without the need to move from one database to another. Cloud security keeps your information safe, provides backup and protection against unauthorized usage.
Learn more: What to look for in an asset management software
Built-in tracking features in an asset management system enable organizations to monitor their tools at all times. With the added facility of barcode and RFID, firms can update locations instantly and oversee usage frequency as well. If all this data is stored securely in the cloud, it gives you the chance to improve your business performance.
By closely analyzing asset reports, companies can come up with targets for the next business year. The detailed information regarding tool utilization allows you to investigate missed goals and devise strategies to achieve higher revenues in the future.
Learn more about EZOfficeInventory!
EZOfficeInventory is a cloud-based asset tracking software that helps thousands of companies track assets and manage equipment, conduct maintenance events, cut costs and streamline processes all over the world. We offer a free 15-day trial – no credit card required!