In real estate, they say the most important considerations are “location, location, location.” And when it comes to fixed asset management benefits, we agree with the real estate agent’s mantra—location is certainly important.
For many organizations, assets are a considerable investment. Tracking your assets with asset tags and scanning technology is a great way to keep track of what your organization owns and where it’s located. The process is relatively simple: During an inventory process, each tagged item can be scanned, and its location verified and recorded into one comprehensive database.
There are many benefits associated with an asset tracking system, but it’s not the only element of asset management that your organization should be utilizing for operational efficiency.
There is also a lot to be gained in knowing the value and useful life of your assets, as well as having an organized method for managing fixed asset data.
Below, we’ve outlined 3 benefits of a fixed asset management solution that we think everyone should be talking about.
1. Simplify Purchase Planning
Knowing where your assets fall in their useful life cycle can simplify the process of purchase planning.
For organizations with outdated or nonexistent asset records, it’s not uncommon to discover suddenly that a vital resource has reached the end of its useful life, and must be replaced. This lack of foresight can result in overspending. If you know months or even years in advance that a large purchase is approaching, you have time to research options and create a financial plan.
Keeping current records on the condition of your assets will also give you a chance to determine the best asset disposal method. Having extra time to sit down and consider all of your options makes life a bit less stressful and helps ensure you are making the right decision.
2. Stay Compliant with Accurate Financial Statements
Under GASB34, organizations are required to use accrual accounting to depreciate fixed assets throughout their useful life.
A suitable fixed asset management solution can automate the process of calculating depreciation, as well as monitor fixed assets that are nearing the end of their useful life. When you maintain accurate information on your fixed assets, the processes of determining the appropriate depreciation schedule and, if required, tax liability are simplified.
An accurate picture of your assets can also help ensure your building contents receive the proper insurance coverage.
3. Happy Auditor(s), Happy Self
Having to work with an unprepared client and complex asset tracking spreadsheets does not make for a happy auditor.
The right software solution for fixed asset management can provide a number of tools to assist your organization in preparing for an audit, including:
- Automated Depreciation: Track and depreciate fixed assets in an easy-to-use, audit-friendly format
- Reports: Run a variety of premade reports that meet your auditor’s needs, or create and run your own reports
Being able to easily search data, run reports, and demonstrate a complete audit trail is a win-win for everyone.