Why is Asset Management Important?
Monitoring and supervising your inventories and other financial asset isn’t just bean-counter busywork. It’s a vital enterprise duty, importance of asset management is to eases hardware and software management, regulatory acquiescence, security and license compliance. So without any second thoughts, a well performed asset management solution can save your company a tremendous amount of time, a lot of money, and lots of management headaches. There is huge importance of Asset management realized for every industry and is required in every sector for it is one of the most effective ways to ensure your prospering and saving a good deal of capital. These savings will be noteworthy if you employ a well groomed asset manager to assist in the management of this feature of the business.
So yeah, no company is untouched of the term asset management. Also a few organizations and the brains running them possess a thorough and deep understanding of what assets are actually in their factories, warehouses or offices at any given time but as it happens some of them avoid the confrontation. This is a huge mistake and by realizing the significance of asset management, and taking it seriously not only can you empower your business but gain high returns too. In order to have an effective asset management system CEOs and senior managers require commitment and discipline but the rewards are many. The ultimate goal is to lower the total cost of ownership of owning and managing the business’s assets.
Importance of Asset Management:
Here in this chapter you are going to learn about importance of fixed asset management in a business, why are assets management important to a company, importance of physical asset management along with benefits and other importance of asset management. Let us understand the concept in much more detailed way as mentioned below:
1. Knowing is Owning:
“Knowing is owning.” is one famous catchphrase from popular TV show, “Sherlock.” As apt as it is for any other sector it applies very well in the field of finance. An efficient asset management program requires significant amount of time and skilled brains. Given the nature of their work most of the executives in the companies do not have enough time to ascertain and uphold an effective asset management system. Due to lack of time, they are often unaware of the whereabouts of their assets, or sometimes they overlook one. This can happen with anyone of us. To solve this issue, when your management teams studies about your assets, they examine every single one very closely and they make sure nothing goes undetected. The final report comes to you and you will be amazed to know, how significant can this report be to your business. Only by the virtue of knowing what assets you own and where they are at, you can determine their protection to a much larger extent by resolving significant identification issues in the event of a major loss caused by any natural calamity like fire, flood or earthquake, even theft and improvise your investment plans in accordance to them.
2. Ensures Amortization Rates Are Accurate:
Vital assets like IT, manufacturing and even the air conditioning systems, have a time span. If you’re successfully able to assess them, you’ll know the exact time when they might require servicing, how much output can you expect from them, and what are the things you can do to improve their efficiency. Also accurate and improvised asset management throughout manifold sites will also allow the rapid and precise inventory reporting, this report is often demanded by lease financiers and insurers. So, now you know that not only will the asset management will help you with an accurate report but also it will ensure that your amortization rates are perfect and consequently monitor that current worth of the business’ assets in the financial statements is right. Accuracy of amortization rates are one of the importance of asset management.
3. Minimizes Stocktaking Costs:
When you sell the unwanted assets or scrap them for that matter, a lot of other things are to be considered. Asset management accounts for the following – firstly it will remove the sold, scrapped and unwanted assets off the book and erase the records of business and then it will also make sure that the spare or supplementary parts and consumables are sold off too. This practice enables the freeing of expensive storage space and saves the stocktaking costs, here you realize the huge importance of asset management. You can even be notified beforehand about the working schedules of maintenance contractors.