What is asset management?
A process of ensuring that all (tangible and intangible) assets of a business organization or company are well maintained, tracked and performing well for the positive growth of business is usually recognized as asset management.
It is one of the most important aspects that every business or company must be cautious about in order to maximize the revenues as well as to provide the best possible ROI to the stakeholders etc.
Reduced business costs, improved operational efficiencies, boosted investor confidence and business nimbleness are the most common benefits of asset management.
However, this article is loaded with numerous reasons why asset management is important for business or company.
Benefits of Asset management for business
Boost efficiency and profitability
Asset management is a process that enables the business administration to merge several business processes at a place such as financial, preventive maintenance and inventory functions not only to support the life cycle of assets but to make the decision making easier for the higher authorities as well.
Different departments of the company such as production department & maintenance department can independently be able to collaborate in decision making processes to boost the efficiency and profitability of the org anization.
Asset recovery is one of the common benefits of asset management system as it makes easy to remove an asset from the books or accounts of business when sold or marked as scrap.
By doing so, a business organization or company can free up storage space for other business inventories by writing off the spare parts or scrap.
You can save money on maintenance
By using a CMMS software or system, a company can save a lot of business money in the term of reduced maintenance cost or repairing expenses as preventive maintenance plan helps the company or business organization to keep its assets in tip-top condition.
Through this way, a business can enjoy the improved maintenance results when using its basic asset management system.
Automating asset discovery & tracking
According to the experts, almost all new asset management systems are functional with asset discovery features that continuously scan the network for any new tool, equipment or device of the company.
Effective asset discovery and tracking can also be done via preventive maintenance plan as CMMS software always creates automatic reminders for equipment preventive maintenance that helps you find out which asset of the company is working on which site or location.
Effective asset management also helps the business detect of any spiteful or rogue tools on the network that could cause an abnormal hazard to the whole workplace or business infrastructure.
Accurate amortization rates
With help of an asset management system, a company or business can make sure that amortization rates charged for all business assets are exact.
When amortization rates are charged accurately, chances of slip-ups in business financial statements are reduced as well.
Removal of ghost assets
Yes, these are the business assets that have been lost or stolen but still on the record in business books. Asset management assists a business or company to remove the ghost assets from its lists in order to prevent any misunderstanding and mistakes in business accounts and financial statements at the end.
Financial statements’ accuracy
Effective asset management means an organization or business has all essential details regarding its all assets and these are included in the financial statements accurately as well.
In results, it aids a company or business a lot to maintain accuracy in its annual financial statements to get precise profit & loss figures without facing troubles.