Asset management is the process of monitoring the acquisition, use, maintenance, and replacement of the assets a company uses to generate revenue. Asset management helps businesses stay profitable by managing the lifecycle of assets so they’re always operating at peak efficiency. Despite the importance of asset management, many small businesses don’t have formal asset management practices in place.
Forgoing asset management is a risky move no matter a business’s size. While large enterprises may have more and more expensive assets, small businesses still have a lot at stake. If the equipment a small business relies on fails, they could face unexpected downtime that costs them hundreds of dollars per minute — if not more.
To know if your company’s asset management practices are enough to prevent major losses, ask yourself if you’re following these asset management best practices.
Keeping an Asset Register
An asset register is a list of your company’s assets, and it serves as the foundation of any asset management system. An asset register should include information on the asset’s location, condition, value, and lifecycle. Rather than maintaining asset registers in spreadsheets, invest in asset management software that allows users to update an asset’s status in real-time. Some of the most popular small business asset management tools include Asset Panda and UpKeep; however, the best asset management software for your business will depend on the type of assets you need to track and how you need to track them.
Labeling assets allows for rapid, error-free identification, whether an asset is being checked out, maintained, or replaced. Accurate asset tagging is essential for avoiding ghost assets. If you’re already using barcodes to track inventory, consider purchasing barcodes for your asset management needs as well. Barcodes allow users to quickly scan assets to access and update information in the asset register. Before ordering barcodes, however, you need to consider the environment where they’ll be used. Manufacturing environments call for more durable tags and labels than a standard office or warehouse setting.
Tracking the depreciation of fixed assets is something all businesses should do to maintain tax compliance, but most accounting programs fall short when it comes to asset depreciation. That’s because many of the most popular accounting solutions like Quickbooks don’t automatically depreciate assets; instead, relying on manual entries to calculate depreciation. Rather than relying on clunky, error-prone spreadsheets, businesses should look for asset management software with integrated depreciation tools.
Employing Predictive Maintenance
Without an asset management system in place, businesses inevitably default to reactive maintenance. However, waiting until something goes wrong to complete maintenance and repairs is bad for productivity and may shorten an asset’s lifecycle. With asset management software, businesses can use preventive maintenance to avoid downtime.
Training Employees on Asset Management
Your company’s asset management system is only as good as its users. If employees change the status of assets without updating the corresponding data, you’ll find your business facing unscheduled downtime and ghost assets despite your investments in software. Enforce policies that require employees to log when assets are checked out, relocated, or serviced and set up a system for reporting damaged or lost assets. Managers can facilitate employee asset management by supplying handheld barcode scanners in critical locations or using software with a mobile app that can be installed on company devices.
Once you have these asset management measures in place, use the information you collect to improve the performance of your fixed assets. By refining the workload and lifecycle of each of your organization’s fixed assets, you can improve your business’s efficiency and reap a greater return on your investments.
Image via Rawpixel