Why is Fixed Asset Management Important?
This article on our blog briefly covers the importance of fixed asset management for your organisation as well as specialised software systems for the management of fixed assets.
5 minute read
What is Fixed Asset Management?
It involves the administration of physical assets throughout its lifecycle, from procurement to final disposal. These assets, known as fixed assets, are long-term in nature and not expected to be converted into cash within the accounting year. Examples include vehicles, IT equipment, furniture and machinery. Fixed assets play an integral role to the functioning of an organisation. They are often operated in the generation of goods/services used to generate income for the company. Fixed assets often comprise the bulk of an organisation's expenditure.
How does it help my organisation?
Sound practices help the organisation derive the most value from fixed assets. Inefficient and inadequate management of fixed assets causes an organisation to experience shortcomings including but not limited to:
- Compliance issues through inadequate/inaccurate reporting with lack of data audit trail
- Wasteful purchasing practices as a result of inaccurate/inadequare information subsequently affecting purchasing decisions
- Lack of data integrity
- Affected productivity from unplanned downtime and equipment failures
- Monetary loss resulting from productivity losses and fines that can be prevented