Fixed assets play an important role in the success or failure of a business. Fixed assets are usually quite valuable and require a higher initial investment. Machinery, vehicles, equipment, and furniture used by an organization can be termed fixed assets. Damage to these may require another investment and cause loss.
Managing the fixed assets efficiently is necessary to support the profitability of the business. The authorities might be unable to physically track everything, so looking for ways for better management is inevitable. Using accounting software for tracking is the best strategy, and you can learn from others by learning the details.
Get into the details of this article to learn and explore how you can handle fixed asset management efficiently and take essential measures to ensure that.
Top 6 Ways for Better Fixed Asset Management
Robust and efficient management of fixed assets significantly impacts the growth and success of an organization. Therefore, it should not be taken lightly. Following a few proven strategies can help you better manage your fixed assets, increase their lifespan, and earn higher profits.
Here are some of the effective ways business organizations can implement for better management of fixed assets and grow their profits.
1. Tag Fixed Assets
Tagging fixed assets is the basic way to ensure their better handling and management. Machinery, equipment, vehicles, tools, etc., are included in fixed assets. They might be in use and free at other times. The authorities will not be aware of the status of the asset until and unless they tag and track them.
Using bar codes or RFID tracking are some of the strategies to tag the assets and track their usage, location, and other details. Some organizations even opt for accounting software to better tag and manage their fixed assets and utilize them efficiently.
2. Decide Management Method
Deciding the management method is at the top of the list for effective management of fixed assets. It means you must name all the fixed assets your organization has and specify their number for the record.
For instance, you must specify the number of pieces of furniture or vehicles in the ownership of the organization to manage them properly. However, that is not all. The authorities must highlight the value, condition, and usage of all the assets to get deeper insights and plan their management accordingly. The details can be used to prioritize the need for care and devise an action plan for asset management.
3. Set Up Asset Tracking
Setting up asset tracking is the next way to ensure better management of your fixed assets. Assets like vehicles, machinery, equipment, tools, etc., might not stay in the same place all the time. Different teams, departments, or authorities in the organization may acquire and utilize them for professional needs.
Still, keeping a detailed track is crucial to ensure you do not end up losing them. You can use location trackers for certain equipment and tools and record the information in the software so all concerned authorities can track it. It can offer details about the person or party having access to the asset and plan the schedule accordingly.
4. Assign Key Figures for Management
Assigning key figures for management is another important way to ensure better management of fixed assets. Organizations must assign authorities the responsibility of looking after and maintaining the assets. In other words, the assigned figure will be accountable for tracking and scheduling the use and maintenance of the equipment or device.
All the other parties will not have to look after the asset or track it but consult the assigned figure for the status. However, it does not eliminate the need to tag the assets or track them through software, as the assigned figure also needs a management plan.
5. Review and Update Lists
Reviewing and updating the list of assets is another effective strategy to better manage the fixed assets. It is only natural for machinery and vehicles to wear out and go out of service. The authorities will have to replace the assets with newer ones.
This is why reviewing and updating the list of equipment every now and then is crucial. It will enable you to list down the additions with all the relevant details and remove those that are not usable anymore. The list will offer insights for future management and ensure you stay on track.
6. Use Software
Using software is the last yet most effective way for better management of fixed assets. Software not only helps track the location and usage of the assets but also offers details of the maintenance schedule. In other words, the authorities can record all the basic details of the asset in the software, like date of purchase, warranty, momentous schedule, usage requirements, etc.
All the concerned and authorized parties can access the software to track the details and follow the schedule accordingly. You can also consult Xero accounting software services to learn its use for fixed asset management and invest in it to streamline all your operations.
Are you concerned about the management of fixed assets?
Fixed assets can impact the profits and losses depending on whether they are managed efficiently or not. Tagging the assets, choosing management methods, assigning key figures for tracking, and updating the list of assets are some basic ways. You must use software for smooth management and tracking, too. If you have any concerns or queries regarding the use of software, feel free to consult a professional accounting company and ensure smooth management of your fixed assets.
