As we descend into an increasingly crippling financial crisis, private and public sector organizations alike are having to be more intelligent with their budgets to avoid getting into trouble. Something that's not often considered is holes in the way your business does its accounts which can lead to asset leakage. If you ensure that you have a grasp on what's happening with your fixed assets, chances are you'll be able to make significant savings and boost your profits for relatively little effort.
What are fixed assets?
For starters, let us define the meaning of fixed assets. All organizations have two distinct forms of assets in their possession. Fixed assets, also known as tangible assets, include things like land, buildings, machinery, equipment and computers. Essentially they are physical objects that have value. The assets you can't touch are called, unsurprisingly, intangible assets - such as trademarks or patents. What we're talking about here is the former type of asset.
Why should I care about tangible assets?
You need to know about them, fundamentally, because its illegal not to - it needs to be part of your tax return. Failure to keep a record of them could land you in hot water. More importantly, if you have more information about them, you are able to make bigger cost savings. That means knowing where they are, how much they're worth, and how much their value is depreciating. In a sense asset tracking is a way for a business faced with financial hardship to pull cost savings 'out of thin air'.
So exactly how are you supposed to manage your fixed assets?
The first step is doing an audit of all your assets and keeping a record of them. Now this part is probably something you've taken care of already, seeing as it's a legal requirement and all. Most commonly this is recorded on a humble spreadsheet, but increasingly savvy organisations are using more sophisticated asset management software. The reason is that you really need to go much further than just recording assets - you need to be able to keep track of them as your organization grows and develops. By tracking I mean keeping a constant record of its location, movements, state of repair, value, etc.If you're a one man or woman show that doesn't mean much more than looking around the room and noting down the model of your computer and desk lamp.With bigger businesses and organizations, this job becomes a lot more tricky. And this is where dedicated asset management software really comes into its own. It takes the brain-ache out of the process by bringing everything together - from accounting through tracking and maintance. And most importantly, if you go with a decent system it will tell you exactly where your business can save big bucks. For my money, as an investment, it's a no-brainer.
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