Organizations make significant investment in assets in order to effectively run their operations. Assets of every shape and size play a role in determining the value of the business, both from a tax perspective as well as a company valuation standpoint.
What are fixed assets?
Fixed assets are included in a balance sheet. Companies use this type of assets for operational purposes. They are not items that the company resells to generate revenue (that’s inventory). Items such as buildings, equipment, and more are considered fixed assets.
For organizations with many assets and/or multiple locations, it can be difficult to even know where an organization’s assets may be located, let alone ascertain the current condition, maintenance history, or value of each asset. Don’t forget, asset value needs to be accounted for on the balance sheet as well, factoring in depreciation.
So how do you manage and track all of this data? Spreadsheets and manual data tracking can only take you so far.
What is a fixed asset management system?
Fixed asset management systems are software solutions that take those spreadsheets and manual processes and automate the tracking, collection, and management of asset data. Depending on the level of sophistication of the system, things like barcode scanning, real-time asset tracking, and integration with other processes like work order management may be included as well.
The main purpose of an asset management system is to help organizations improve their visibility of a wide variety of asset data, understand where investment may be need in future capex planning, and automate manual processes to increase staff productivity.
What are the key functions of an asset management system?
1. Asset Data Management
Each asset in an organization has a wealth of data that could be associated with it. But if you are relying on manual tracking, it can become an overwhelming task. Let alone when you have hundreds or even thousands of assets. Without an asset management system, it would be extremely onerous to determine the full visibility into an organization’s asset picture.
Software can help you track the status, condition, location, and performance of each asset – plus information like purchase price, contract terms, date of purchase, maintenance history, depreciation value, and more. In fact, some asset management systems will automatically calculate the asset depreciation, streamlining tax reporting. Asset management systems will also highlight assets that are no longer productive or used, facilitating a more timely, tracked disposal. A major benefit of these systems is the full overview of the asset lifecycle.
2. Maintenance Data
It’s a fact that any fixed asset is going to require maintenance in order to keep it running. Some assets may even require a strict schedule of maintenance in order to keep warranties active. If you are using pen and paper, it can be very difficult to track dates of service performed, what service was performed, who performed the service, and what parts were used. Let alone schedule reminders, plan for outages, and create the appropriate work orders.
Software enables full visibility into an asset’s upcoming maintenance as well as historical data. This helps spot trends in the asset’s viability, costs associated, warranty work, and downtime. This type of data can be very valuable when determining the asset’s total cost of ownership and can even guide capex planning.
3. Reporting and Analytics
Logging and tracking the data is a critical first step, but real value is wrung from analyzing the data to guide operational decisions. A critical element for any asset management system is the ability to generate reports that provide actionable insights. At a minimum, reports should provide data on asset performance, downtime, repair history and frequency, and the lifespan of each asset. The reporting functionality should also provide data that is easily sharable among the entire organization.
It goes without saying that asset data is critical to your operations and it is imperative that the system that you select contains robust safety and security protocols. Role-based access controls allow you to ensure that only the appropriate people have visibility to the data and restrict unauthorized users. Encryption, regular security updates and patches, disaster recovery, regularly scheduled backups, and other cybersecurity measures are important to protect the integrity of your data and confidence in your system.
5. Integration and Customization
The best asset management systems allow for integration with mobile devices as the majority of the work is performed in the field. Similarly, each organization has specific needs to capture regarding their asset data, work orders, and other documentation. A system needs to be flexible to handle the customization that is required in order for your asset management program to be most effective.
AMCS Field Services solution is a highly-configurable, easy-to-use asset management solution that enables customers to efficiently collect data in the field, manage assets, increase visibility into operations, and improve decision-making and reporting.
Learn more about AMCS Field Services or contact our team for a demonstration.
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