When it comes to your business investments, you want to know that you’re getting your money’s worth. But if your business isn’t tracking its assets, you may have no idea where your equipment and other investments are located and how they’re being used, let alone what condition they’re in or their ROI. You might think asset management is only something larger enterprises need to worry about, but lost or missing equipment can eat into any business’s bottom line.
Here’s what you need to know to get started with asset management in your own small business.
Types of Assets to Manage
Most small businesses focus on two types of assets for their asset management needs: fixed assets and IT assets.
- Fixed assets include things like buildings, vehicles, machinery, and office furniture. Unlike current assets, which are converted to cash within a year, fixed assets are long-term assets that allow your company to generate revenue.
- IT assets include both hardware like computers and copiers as well as software and licenses. IT asset management also tracks company-issued phones, laptops, and tablets.
Why Asset Management Matters
With an asset management system in place, businesses can see where an asset is at any time as well as learn its life history and current status. That allows businesses to refine maintenance and replacement schedules and monitor use in order to avoid ghost assets.
As Accounting Today explains, ghost assets can quickly drain away your profits. Lost, stolen, damaged, or broken equipment that is unaccounted for, or which you believe you still own and use, are holes in your cost projections, they are tax vacuums, and they lead to inaccurate reporting with a domino effect on your numbers down the line.
Types of Asset Tracking Systems
Before adopting asset management software, business owners have to decide what type of asset tracking system to use. Barcode, RFID, and GPS technology are the most common asset tracking solutions, each with their own pros and cons.
- Barcodes are the most affordable asset tracking system, making them a popular choice for small businesses just getting started with asset management. Barcodes are also commonly used for inventory management, so adding asset tags doesn’t require major technology upgrades. And since barcodes can be manufactured to withstand extreme temperatures, chemicals, and other harsh conditions, they’re suitable for a wide range of business settings. From outdoor storage facilities to labs, they can be an ideal solution.
- RFID tags can be scanned more efficiently than barcodes, making them a good choice for high-volume environments. However, the high upfront costs of RFID chips and scanners keep many small businesses from adopting the technology.
- GPS tracking is designed for companies that need to track the location of remote assets like fleet vehicles or field equipment. Wex explains GPS tracking can be done with active GPS tags that transmit data in real-time or manually-scanned barcodes.
Choosing Asset Management Software
Businesses have two options for asset management software: custom software or off-the-shelf solutions. Since custom software is expensive and requires a high level of support, it’s best suited to companies with highly specialized asset management needs. Luckily, configuring off-the-shelf software is adequate for most small businesses.
The best solutions are ones that can handle both fixed and IT assets in a single software package. Look for software that’s hosted in the cloud so that data can be accessed and updated from any device and location. UpKeep, Asset Panda, and EZOfficeInventory are popular picks, but as with any major software investment, businesses owners should do their own research to find the best solution for their company’s needs.
Once your company has chosen an asset tracking system and software, the final challenge is implementation. In addition to tagging assets and inputting data into asset management software, managers should pay special attention to staff training to ensure full adoption of the company’s asset management practices. Your new asset management system will be most effective when your entire team is on board.
If you would like help implementing an asset management system in your company please schedule a consult so we can discuss your options.
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