Fixed asset management is the practice of managing and tracking a company’s fixed assets. It is critical for any company that manages physical or other long-term assets, such as computers, manufacturing equipment, vehicles, etc. Here’s where fixed asset software, a part of the broader EAM category, comes in.

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Fixed assets are very important to a company’s daily operations and achieving long-term goals. That’s why, it’s better to have a reliable solution to ensure all assets are in place and performing in top shape.

Fixed assets have several other names, like long-term, physical and non-current assets. Despite their classification, fixed assets play an important part in how a company earns revenue. Therefore, effective management of these assets is crucial. It directly impacts your organization’s ability to support future planning and vision. Not only that, but with good planning and data-driven knowledge, your company can make better decisions and improve ROI.

You can carry out fixed asset management using digitized, cloud-based tools, commonly known as fixed asset management software.

Before we deep dive into what fixed asset management can do for your organization, let’s look into the various elements that make up this process.

What are Fixed Assets?

According to Investopedia, fixed assets can be defined as:

The term fixed asset refers to a long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income. The general assumption about fixed assets is that they are expected to last, be consumed, or be converted into cash after at least one year. As such, companies are able to depreciate the value of these assets to account for natural wear and tear. Fixed assets most commonly appear on the balance sheet as property, plant, and equipment (PP&E).”

Fixed assets are often larger assets employed in a business’s daily operations to earn revenue through the production of goods and services.

Although you can classify intangible assets like copyrights and patents as fixed assets, the term typically applies to more tangible assets. The following are some examples of fixed assets seen in a business environment:

• Office equipment
• Computer equipment
• Buildings
• Furniture
• Manufacturing equipment
• Vehicles
• Machinery

Servers, transport vehicles and elevators are examples of fixed assets that demand a significant capital investment. They could account for a substantial amount of a company’s net worth. The better and more efficiently a corporation manages its assets, the better its chances of getting the most out of its investments.

As time passes, fixed assets begin to depreciate. You can expense these assets differently than others because they offer long-term revenue. Intangible assets are amortized, while physical assets depreciate constantly. The asset’s value declines as the amount of depreciation on the balance sheet increases. Then the company can match the asset’s cost to its sustained worth.

The way you depreciate your assets might lead to discrepancies in your book or balance sheet values compared to their current values on the market. For example, land does not depreciate.

Why is Fixed Asset Management Important?

Fixed assets are not only some of the most significant acquisitions a company will make in a financial year, but they are also some of the most expensive. As a result, it’s necessary to efficiently manage each asset to maximize investment value and assure the best return on investment (ROI).

An organization may face the following problems if they do not implement fixed asset management:

• Unexpected downtime
• Equipment failure
• Misplaced or missing inventory
• Breach of safety or the environment
• Failure to comply with legal or regulatory requirements

For corporations with large inventories, the costs of lost production, repairs, replacement and fines might total millions of dollars. In addition to immediate expenditures, inadequate equipment can impact the quality of an organization’s services or goods, which can harm client satisfaction and reputation.

When it comes to asset management, a company can have a variety of objectives, including:

• Real-time tracking
• Monitoring equipment at different sites and places
• Increasing operational output while improving production efficiency
• Increasing the asset’s usable life
• Reducing maintenance expenditures and unscheduled downtime

A robust asset management solution will give you the tools you need to successfully manage all of your fixed assets on your balance sheet. It accomplishes this by offering a variety of services and features to users.

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Managing Assets with Software

Managing different locations, conditions, assets and maintenance requirements can be tedious. In that case, an automated solution could help organizations quickly deploy an effective asset management system that makes the entire process easier to handle. Users can easily manage fixed assets with end-to-end visibility into the management process, from acquisition to disposition, using fixed asset management software, also known as EAM software.

According to MarketsandMarkets, the asset management market is expected to value more than $27 billion by 2025.

Fixed asset software keeps track of asset purchases and sales within the organization and conducts regular audits to ensure compliance. It digitizes, stores and retains asset data in a central document management repository, obviating the need for physical records. Users can generate asset status reports, monitor depreciation and receive status updates based on specific criteria.

Enterprise resource planning (ERP) systems and computerized maintenance management systems (CMMS) are two other software types that help firms track, manage and maintain their fixed assets effectively.

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Primary Benefits

From what we’ve read so far, it’s clear that asset management is no cakewalk. It’s nearly impossible to track maintenance requirements and depreciation without a dependable solution to manage your fixed assets. These activities are necessary to ensure that all assets are in good working order and can serve the organization for as long as feasible. Early breakdown and unanticipated repairs can be costly to your business, which is why periodic maintenance is so important.

Companies may utilize software to enhance their productivity and get the most out of their assets if they have a complete system for managing buildings and machinery. Fixed asset management systems provide a comprehensive set of capabilities that apply to a wide range of businesses.

Here are some advantages to deploying fixed asset management software for your business:

Strict Asset Vigilance

Employees often use office assets for off-site assignments. Many times, such products may be lost or stolen if the last person to use them does not record check-outs properly.

Using fixed asset software, you can log check-in and check-out details easily in one place. It keeps track of asset identification numbers and staff IDs so you can figure out who’s to blame for missing stuff. Fixed asset software helps you keep a close eye on your assets and store and use them safely.

Keep Tabs on Depreciation Throughout Asset Life Spans

Tracking the depreciation of all your fixed assets is one of the most important components of fixed asset management.

It allows you to keep track of how your assets are degrading and alerts you when maintenance is necessary. This provides precise depreciation calculations, allowing you to plan repair sessions and keep your fixed assets in good working order.

Reduce Downtime With Scheduled Maintenance

The majority of fixed asset software solutions allow you to schedule equipment maintenance for the future as soon as you buy it. This function is especially beneficial for fixed assets whose financial worth must be modified on a regular basis depending on their use value.

Regular service sessions also help keep your business functioning by reducing equipment downtime.

Monitor Asset Availability To Avoid Over Reserving

Expensive capital goods are usually in short supply. Sometimes, unknowingly, employees may double-book certain fixed assets.

To avoid this, you can check the current status of fixed assets on a dashboard calendar in fixed asset software. It saves time and helps you prevent last-minute hassles.

Ensure Audit Compliance

Asset auditing is an important part of any company’s operations. You do it for two primary reasons. First and foremost, it assists you in complying with federal accounting and business rules. Second, it enables you to go over your financial records again and look for suspicious activity or irregularities.

Audit modules are also available in fixed asset software. You can ask custodians to simply acknowledge that fixed assets are in their care or to scan asset labels. This serves as a confirmation that they have the assets and are properly using them. You can maintain your company’s credibility at all times with fixed asset software and regular audits.

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Key Features

Fixed asset management software provides businesses with a number of functional features, making it an increasingly popular tool among enterprises that want to make the most of every asset they own. It enables maintenance managers to access critical information from any device, allowing them to track and actively manage assets across multiple locations.

The fixed asset software market is projected to reach a value of $6.46 billion by 2028, growing at a CAGR of 10.39% from 2021 to 2028.

So, how can fixed asset software improve your efficiency? Here are a few major asset management system characteristics that make this software a smart buy:

Asset Life Cycle Management

Managing different types of assets is one of the greatest difficulties for asset-intensive firms. Fixed asset management software eliminates the need for a backlog of management chores that can stifle productivity.

You can effectively plan and budget for upgrades, replacements and other changes in an asset’s life cycle, if you know its current state. Asset life cycle management (ALM) is the process of using a combination of management, tracking, performance and monitoring tools to maximize profit generated by your assets throughout their life cycles.

Work Order Management

Work order management helps centralize work requests and gives the entire maintenance team visibility. It also helps increase labor efficiency and improves reaction times dramatically. FAMs can utilize work order management to discover which engineer is closest to a new assignment geographically and assign it to that individual.

Work order management capabilities in FAM systems simplify and automate the process of filing, processing and closing work orders. Many companies provide role-based access to limit admin users’ ability to close work orders.

Inventory Management

Inventory management not only includes inventory and stock but also comprises spare parts and other maintenance-related equipment. Controlling and supervising ordering inventory, inventory storage and other organizational responsibilities are all part of inventory management.

The best asset management software also tracks parts, tools and other supplies that leave the warehouse. With barcoding, this system controls all of the billing related to it in one place.

With stock level metrics tracking and management options, such as inventory transfers and substitutes, you can maintain inventory metrics in order in one easy area with FAM software. By standardizing, automating and streamlining the process of lot control and serialization, FAM software makes it easier.

Maintenance Management

Maintenance management is in charge of keeping your assets in good working order. It consists of the tools, technology and processes that a company uses to do repairs and maintenance. Employing a maintenance manager to supplement maintenance chores allows customers to maintain regulatory compliance and track warranty information to avoid costly mistakes before they occur.

This function also automates some time-consuming maintenance procedures. Creating a custom template saves time and reduces data entry. With a combination of preventative maintenance scheduling and fault management tools, you can rest easy knowing your assets are taken care of in a timely manner.

Reporting

Business intelligence (BI) is a technology-driven method for evaluating data and presenting actionable information to enable users to make better business decisions based on data.

A notable example of this is reporting in fixed asset management software. Rather than providing a full menu of BI choices, FAM BI focuses on asset management reporting services such as fault site reporting, which helps identify asset failures. You can also add custom key performance indicators (KPIs) to tailor data you receive to your specific requirements.
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Does Your Business Need Fixed Asset Management Software?

A fixed asset management system is clearly useful; however, does your organization require one? The simplest way to determine whether FAM software could be beneficial to your organization is to evaluate the following factors:

First and foremost, if your organization has a large number of fixed assets that need to be tracked and maintained, then a FAM system may be useful. The system is well worth the money because it provides features that make the entire maintenance process more accessible.

Even though the number of fixed assets you hold might be currently limited, you may want to expand in the future. If that’s the case, it’s a good idea to start exploring fixed asset software now, rather than waiting until the need arises.

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Conclusion

Fixed assets account for a significant portion of a company’s capital investments; thus, you should regularly monitor their use. Fixed asset management software keeps you updated on the acquisition, maintenance and disposal of your assets. It also enables you to do a detailed review of your company’s performance in order to determine where it stands.

The myriad features of fixed asset management software give you an insight into your business performance and help you grow in the right direction.

Have you used a fixed asset management software for your organization? How did that work out for you? Let us know in the comments!