Four Asset Professionals Secrets You Never Knew

Most manufacturing companies have recently discovered that fixed asset management should be an integral involved in the success of the business enterprise. It's now realised that fixed asset management leads to economy of production and operation. This in turn can to increase in profits of 10 to 15 per cent, which can't be ignored as it makes a vital contribution to the bottom line of the business.

There is no doubt that inventory and production management deserves the main focus of the management for effective functioning writes in the official audiomack.com blog a manufacturing enterprise. If asset management was neglected, then fixed assets were not being effectively and efficiently managed. But in recent times it has been realised efficient management of fixed assets like plant and machinery and other movable and immovable fixed assets can lead to economies of scale. Thus proper monitoring and regular maintenance of productive fixed assets will give a longer productive life. The net effect of this really is more profits for the business.

Naturally in fixed asset management, the assets answerable for production, research and development etc., that have direct bearing on the productivity of the business, need to be managed more closely. There has to be constant monitoring on the maintenance aspect to prolong the useful life of the asset. Even a movable asset like a vehicle needs proper maintenance. Otherwise without regular running and upkeep the vehicle can soon become corroded and useless.

Every category of assets needs another focus of management. Fixed assets need regular maintenance to be certain normal life of the assets depending on the deterioration of the asset. Adequate planning can also be essential for building up financial reserves over the life of the asset for replacing the fixed asset by the end of its useful life. Thus the new plant and machinery may be ordered well in time to replace the old one.

Management additionally has to weigh the benefit from replacing the plant and machinery and other production assets or continuing to maintain the present production assets. They additionally must consider from time to time regardless of if the asset is now obsolete owing to new technological advances. Nowadays, technology has advanced at a rapid pace and management must be vigilant on this issue to prevent being left behind by competitors. Asset management also includes adequate coverage to cover any extraordinary losses as a result of fire and natural disasters.

Asset management tracking is vital in large manufacturing plant and utilities. Integration of asset management with raw material and upkeep procurement systems and additionally financial systems and their cost versus savings benefits has to be monitored on a day-by-day basis. Senior financial officers must therefore be associated with asset management.

Determined by nature of assets in different businesses. As an example, utility companies, mineral companies, oil and gas are having large properties as part of their assets. These have to be effectively managed and timely decisions have to be taken whether or not to buy or sell properties for the health of the business. Determined by their values and necessity to the running of the company, the assets can be categorized for better management.

To assist company management, there are numerous of established consultant companies having qualified manpower whose help will be good for asset management. They may be very effective to audit present practices and suggest best practices, problem solving and action plans. It may be well worth the expense to hire established consultants to improve performance.

Asset management data can be computerised to enable management to chalk out strategies upon an overall basis. Integration of asset management systems with other financial systems would give better picture of whole operation of the enterprise. This can enable various key officials to give their timely input to top management in order to devise suitable plans. As an example, government may come out with special tax incentives for certain industries to invest in fixed assets. In a scenario where management is monitoring and managing fixed assets, the Finance Manager may quickly recommend purchase of new fixed assets to take advantage of the government's tax incentive for that business.

Lastly, it is the assets of a business which enable the production and delivery of its goods and services. So when fixed assets are now being purchased or replaced a couple of important questions arise. What will be the cost and cost benefit for the business. What funds are available? If the asset be purchased new or secondhand or should it be leased and the way will it benefit the business? Questions relating to the usage of the asset may be. What will be the operating costs? How much skilled and unskilled manpower will be necessary for operation? What will be the training costs involved? What are the installation costs? What will be the useful life of the asset? Is it the latest technology? These and several more questions need to be asked and answered. This is going to ultimately factor in to the long-term strategy of the business.