Regardless of the size of the company, managing business assets is a time-consuming chore. But, it doesn’t have to be. With the right processes and tools in place, asset management can be much easier than you may think. Here are six ways to streamline managing business assets.
1. Conduct a baseline catalog of assets
This is the most time intensive part of the process. However, it is essential. There must be an accurate inventory of all the business assets. This inventory must include the type of asset and the location of the asset. Without a baseline catalog that accounts for all of the business assets, every other step in the process will always be inaccurate.
Important to the streamlining process is the elimination of ghost assets. These are assets that are lost, stolen, or unusable but are still believed to be an active asset. In addition to causing the company to pay more in taxes and insurance on assets the company no longer owns, ghost assets can lead to productivity loss because they are not available when needed.
Because business assets, such as fleet vehicles, computers, office furniture, and fixtures are listed on the company’s balance sheet, most can be written off and either depreciated or expensed according to the tax code. This is why it is also essential that the value of the asset is accurately recorded when the catalog is taken.
2. Determine who is responsible for each asset
The baseline catalog must also include a notation of who is responsible for the asset. No matter how many assets are in the catalog someone either uses the asset or has control over the asset in some way. The fleet manager has control of the vehicles. The facilities manager has control over certain equipment. Someone has the responsibility, and the name of that person should be in the catalog.
It may be tempting to skip this part of the process, but it pays dividends as time goes by. For instance, when someone is looking for a business asset and it’s not in the location where it is supposed to be, how do you find it? The first step should be asking the person responsible for it. If you don’t know who is responsible for it, then where do you begin your search?
3. Use asset management software
The best way to streamline the management of business assets is to use the right software. It’s a mistake to use spreadsheets to manage assets. Spreadsheets are prone to human error. And, once errors are made, it can be impossible to find them. This could result in an incorrect inventory and valuation of the assets. It’s important to select a software platform that is capable of fully integrating with the company’s general ledger, so asset-related data can be easily updated and shared.
The selected management software should also be able to track the location of each asset, record maintenance schedules, calculate depreciation, and provide customizable reports. It should also be scalable, so it can grow as the company’s inventory of assets grows.
Additionally, the software should store data in the cloud. This provides a secure place to store asset-related data. And, it allows the data to be managed from any computer or mobile device.
4. Use asset management hardware (ID tags or Barcodes)
Another way to streamline business asset management is to use hardware. This hardware includes some form of barcodes or ID tags. Barcodes, not the serial number of the item, helps quickly identify the item by sight. ID tags are particularly useful when a company has a large amount of assets to keep track of. The barcode can be scanned quickly and automatically uploaded to the asset management software.
5. Track assets as they come into the company
Identifying every asset that must be tracked can be a challenge. That’s why it is important to start tracking assets as soon as possible after an asset is acquired by the company. Starting at day one, add the new asset to the tracking system before it is used. This helps make sure that the asset doesn’t disappear before its presence is recorded.
6. Create customized reports
The selected asset management software will undoubtedly come with canned reports. Each of those reports should be reviewed to make sure they fit the company’s needs. Often, the canned reports don’t fit the company’s needs. This goes back to selecting the right software. It helps to know in advance whether the software allows for customized reporting.
Helpful customized reports include depreciation reports, transfer and disposal reports, management reports, and tax reports and forms. Depreciation reports provide a clear picture of the current book value of each asset along with the percentage of depreciation taken up to the date of the report.
Transfer and disposal reports list assets that have been disposed of and any related gains or losses. These reports also track the origin and destination of transferred assets. Management reports provide a summary of account balance activity and show how the asset is tied into accumulated depreciation on the balance sheet. Tax reports produce tax forms for annual filings. Among other things, they include a detailing of depreciation expenses, records of the sale of property, and investment tax credit recapture.
Asset management, knowing where an asset is and the value of that asset, is an essential task for every business. Without the right tools and process in place, it can be an ongoing headache. And, when a task is a headache, it may never get done. Fortunately, there are ways to streamline the process so that managing business assets gets done—and gets done efficiently.