About Fixed asset register
A fixed asset register.A fixed asset register provides the capabilities to input all data into one centralised system. That includes asset information such as purchasing costs, maintenance schedules, and last known locations. This data can be accessed by staff and other stakeholders through the use of a cloud-based tool.Asset Lifecycle Management TrackingThe process of using asset tracking tools can start to improve the way businesses view their assets. One of which is being able to build and monitor the lifecycle management of each asset.Asset lifecycle management is a strategic and analytical approach that can be broken down into four stages; planning, purchasing, operation and maintenance, and disposal of assets.Through this approach, businesses have the best chance of being able to extend each asset’s useful life. As well as calculating depreciation value, identifying asset roles, ensuring health and safety, and taking a preventive maintenance approach to assets and equipment.How to Account for Your Fixed AssetsThe three most common types of fixed assets are property, plant, and equipment (PPE). Fixed does not mean that the asset cannot be relocated or moved. Some businesses may move fixed assets between locations and will initially hold a fixed asset for more than one reporting period.However, what one company considers a fixed asset, might not be considered a fixed asset in another company. For example, an IT company might consider their computer equipment as a fixed asset. But, a company that sells computers would not consider their computer equipment as a fixed asset since it is their merchandise.Depreciation is the decrease in value over time. Most fixed assets depreciate but property – such as land or real estate – usually does not depreciate over time. When submitting balance sheets, it is important to not have significant bumps and drops in total assets.Instead, it is a better accounting practice to have more accurate reporting of assets’ values over their useful life. It is beneficial to report the fixed asset with its value spread out over the estimated lifespan.Linking Profitability With Fixed Asset ManagementA balance sheet has two components; assets and liabilities. The equity or profitability of any company equals assets minus liabilities. For most asset-intensive businesses, profitability is a direct function of how assets are chosen. As well as managed and disposed of.As an example, consider Tesco’s and BP’s balance sheets. These are two big organisations operating in different domains. But, both list facilities, plants and equipment under their assets category. Whilst these are multi-billion pound companies, managing assets and making a profit remain the same.We can agree that managing assets has a direct impact on profitability. Taking a simple approach, calculate the total value of your assets. Let’s say, as an example, it’s £10 million. now, assume two scenarios: An asset management tool is deployed incorrectly An asset management tool is deployed correctlyLet’s assume in the first scenario you get 6% more return from your total assets across 5 years. This equates to £600,000. In the second scenario, you get 10% more return from your total
Key features of the Fixed asset register that are enabled through these drivers include:
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Fixed AssetsThrough tracking solutions such as tagging and IoT devices, businesses are able to collect various forms of asset data and store it in a centralised fixed asset register. This can help to reduce costs associated with the loss or theft of equipment. As well as identify and eliminate ghost assets that a company may still be paying insurance premiums on.Having better visibility of assets also helps to improve stock control and inventory management. This is particularly useful for a business that relies on having spare parts available at the right time, such as a manufacturing operation. One company that saves millions of dollars each year through asset tracking is Air Canada, which track all their food carts used in airports around the world.Maximise an Asset’s Useful LifeA key factor in generating a good return on investment is by extending a fixed asset’s useful life. Although marked down as long-term assets, an asset’s useful life is usually within the first year of purchase. From then on, as wear and tear begin to take hold, an asset will depreciate in value. But that’s where the tools of an asset management system can be effective.By being able to continuously monitor the performance and condition of machinery, equipment, and infrastructure, businesses can slow the rate of depreciation by deploying maintenance schedules. Particularly through a preventive maintenance strategy that involves regular and routine maintenance of equipment to reduce the likelihood of failure leading to unplanned downtime.Unplanned downtime can be so damaging that in 2016 alone it single-handedly cost businesses $260,000 per hour.Find the Best Fixed Assets Management System to Track & Manage Your Fixed AssetsGet StartedWhat Is Fixed Assets Management Software?The key to successful fixed asset management is through the use of a digitalised – preferably cloud-based – software tool, known as Fixed Assets Management Software. Fixed Assets Software is essential for accurately monitoring assets that are essential for asset-intensive organisation relying on the production of goods and services to drive income.With a solution in place, businesses can achieve goals aligned with: Real-time tracking Monitoring equipment across multiple sites and locations Improving production efficiency Increasing operational output Optimising the useful life of assets Reducing maintenance costs and unplanned downtimeA powerful fixed asset management solution will provide the tools necessary to effectively manage all fixed assets that are accounted for on a business’s balance sheet. It does so by providing users with various functions and features, like:Asset Tagging and TrackingThe use of asset tracking tools and technology in the form of asset tags lays the foundation for being able to track fixed assets in real-time. Typical asset tagging devices include barcode, QR code, RFID, and GPS.Not only does this allow for real-time location tracking to minimise the costs associated with lost and stolen equipment, but IoT devices can also be used to track asset performance and monitor equipment conditions.Fixed Asset RegistersA key feature of any asset management system is to provide businesses with visibility of what assets they’re responsible for. This is achieved by creating
