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Most manufacturing companies have recently discovered that fixed asset management should be a key a division of the success of the business enterprise. It is now realised that fixed asset management leads to economy of production and operation. This in turn can to improve in profits of 10 to 15 per cent, which cannot be ignored as it makes a substantial contribution to the bottom line of the business.<br><br>There's no doubt that inventory and production management deserves the main focus of the management for effective functioning in a manufacturing enterprise. If asset management was neglected, then fixed assets were not being effectively and efficiently managed. But in recent years it's been realised efficient management of fixed assets like plant and machinery and other movable and immovable fixed assets can result in economies of scale. Thus proper monitoring and regular upkeep of productive fixed assets will give a longer productive life. The net effect of this really is more profits for the business.<br><br>Naturally in fixed asset management, the assets accountable for production, research and development etc., which have direct bearing on the productivity of [http://www.neighborhoodlink.com/people/richardwuuyng visit the up coming internet site] business, need to be managed more closely. There must 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 maintenance the vehicle can soon become corroded and useless.<br><br>Every category of assets needs another focus of management. Fixed assets need regular upkeep to be sure normal life of the assets according to the wear and tear on the asset. Adequate planning is also necessary for building up financial reserves over the life of the asset for replacing the fixed asset at the end of its useful life. Thus the new plant and machinery may be ordered well in time to replace the old one.<br><br>Management has to weigh the good thing about 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. At the present time, technology has advanced at a rapid pace and management must be vigilant on this issue to prevent being left behind by competitors. Asset management includes adequate insurance to cover any extraordinary losses due to fire and natural disasters.<br><br>Asset management tracking is vital in large manufacturing plant and utilities. Integration of asset management with raw material and upkeep procurement systems and also financial systems and their cost versus savings benefits has to be monitored on a day-by-day basis. Senior financial officers must therefore be involved with asset management.<br><br>Depending on nature of assets in different businesses. For instance, utility companies, mineral companies, oil and natural 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. Depending on their values and necessity to the running of the company, the assets can be categorized for better management.<br><br>To assist company management, there are a variety of established consultant companies having qualified manpower whose help will be beneficial for asset management. They can be very effective to audit present practices and suggest best practices, problem-solving and action plans. It may be well worth the cost to hire established consultants to improve performance.<br><br>Asset management data may be computerised to enable management to chalk out strategies on an overall basis. Integration of asset management systems with other financial systems would give better picture of whole operation of the enterprise. This tends to enable various key officials to give their timely input to top management to be able to devise suitable plans. By way of 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 make use of the government's tax incentive for that business.<br><br>Lastly, it is the assets of a business which enable the production and delivery of its goods and services. So when fixed assets are being purchased or replaced a couple of important questions arise. What is the cost and cost benefit for the business. What funds are available? In the event the asset be purchased new or secondhand or should it be leased and how will it benefit the business? Questions relating to the usage of the asset could be. What are the operating costs? How much skilled and unskilled manpower would be necessary for operation? What are the training costs involved? What are the installation costs? What is the useful life of the asset? Is it the latest technology? These and several more questions need to be asked and answered. This can ultimately factor into the long-term strategy of the business.