Fix Asset Management

What is Fixed Asset Management?

Fixed asset management (FAM) refers to the process of managing and tracking assets, such as buildings, machinery, vehicles, equipment, and furniture that are purchased or acquired by an organization. It includes planning, acquisition, maintenance, repair, disposal, and replacement of a company’s physical assets.

The purpose of FAM is to ensure that the organization’s assets are used cost-effectively. You can keep asset records, asset registers, or asset management software to track the life cycle of your property. This helps the organization achieve its goals and objectives and provides more accurate financial statements.

What are the 3 Types of Fixed Assets?

There are three types of fixed assets: Tangible, Intangible, and Specialty.

1. Tangible assets include items that can be seen and touched. Examples include office furniture, computers, cars, trucks, pallet racks, and other real items.
2. Intangible assets do not have a physical form. They cannot be seen or touched. Examples include software programs, patents, copyrights, trademarks, goodwill, customer lists, and other intangible items.
3. Specialty assets are those that are unique to an organization. Examples include special tools, specialized equipment, and training materials.

These are the three main types of fixed assets, but business owners should be aware of a fourth asset. Ghost assets can’t be physically used but are still listed in your asset accounts. It’s important to audit your assets occasionally to repair or eliminate ghost assets.

What is the Role of Fixed Assets?

You need to know what type of assets you have in order to manage them properly. For example, if you own a car, you will want to make sure that it is maintained well. If you own a building, you will want to keep it clean and updated. If you own a computer system, you will want to protect it from viruses.

Understanding your assets’ roles in your company is essential for cost-effectively utilizing them.

Benefits of Managing Fixed Assets

There are many reasons why you might want to consider implementing a fixed asset management program in your organization. Here are some of the most important ones:

1. Reduce costs: By having a well-designed asset tracking software or system, you’ll be able to manage your assets better and reduce unnecessary expenses. You’ll also save money by preventing damage to equipment and improving efficiency.
2. Improve employee satisfaction: A good FASM program will allow employees to work efficiently and effectively without spending too much time managing their assets. This will increase job satisfaction and help retain skilled workers.
3. Increase productivity and save time: When there isn’t a lot of clutter around, it’s easier for employees to focus on what needs to be done. They’ll spend less time searching for the physical location of things and more time getting stuff done.
4. Create a positive culture: Employees will feel valued and appreciated when they’re working in a clean environment. And because they won’t waste time looking for misplaced items, they’ll be happier overall.
5. Keep up with technology: Technology continues to evolve, and it’s essential to keep up with the latest trends. If you don’t have a system, you could miss out on opportunities to improve operations and streamline processes.

Why is Managing Your Fixed Assets Important?

Fixed asset management is one of the most challenging aspects of running a successful business. It is easy to lose track of your assets or forget about an asset under construction that needs to be fixed. A fixed asset is anything owned by your organization and used to produce revenue. For example, a building might be considered a fixed asset because it produces income for you every month, even though you don’t physically touch it every day.

Here are some reasons why fixed asset management is essential:

1. You cannot afford to miss out on any revenues generated by your fixed assets. If you don’t know what your fixed assets are producing, you won’t know how much money they generate each month. This could lead to missing out on potential revenues.
2. Your fixed assets are part of your physical property. When they go missing or need repairs, you still are responsible for them. As such, you want to ensure that you keep good records of everything related to your fixed assets. The asset accounting framework is just as important as keeping the asset itself in good shape.
3. Fixed assets are often the root cause of many problems within your organization. If you do not manage your fixed assets correctly, you risk losing customers and employees due to safety issues.
4. Some companies use fixed assets as collateral against loans. They use the value of their fixed assets as security to borrow funds.

How Can We Help Manage Your Fixed Assets?

When it comes to your warehouse assets, managing them and keeping them in good working order is where we come in. We can help reduce your maintenance costs and provide the needed repairs to keep your equipment in good order. If you decide your asset is at the end of its life cycle, such as a pallet rack, don’t just scrap it. We can recycle your assets, and they can be reused. Recycling helps the environment and allows small businesses an opportunity to purchase the equipment at a lower cost.

We can help with used or new asset acquisitions and asset maintenance. Contact our team today.