How Five Stories Can Change The Way You Approach Asset Professionals

Most manufacturing companies have recently discovered that fixed asset management should be an integral involved in 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 significant contribution to the bottom line of the business.

There isn't any 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 recently it's been realised efficient management of fixed assets like plant and machinery as well as other movable and immovable fixed assets may bring about economies of scale. Thus proper monitoring and regular maintenance of productive fixed assets will give a longer productive life. The net effect of this is more profits for the business.

Naturally in fixed asset management, the assets answerable for production, research and development etc., which 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 maintenance the vehicle can soon become corroded and useless.

Every category of assets needs another focus of management. Fixed assets need regular maintenance to be sure normal life of the assets depending on the deterioration of the asset. Adequate planning is additionally 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 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 whether or not the asset is becoming obsolete owing to new technological advances. These days, technologies have 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 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 must be monitored on a day-by-day basis. Senior financial officers must therefore be associated with asset management.

According to nature of assets in several businesses. One example is 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. Determined by their values and necessity to the running of the company, the assets may be categorized for better management.

To aid company management, there are a number 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 employ established consultants to improve performance.

Asset management data can 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 will certainly enable various key officials to give their timely input to top management as a way to devise suitable plans. For 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.

Lastly, it really is the assets of a business which enable the production and delivery of its goods and services. So when fixed assets are increasingly being purchased or investment professional replaced a couple of important questions arise. What will be 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 will be 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 will be the useful life of the asset? Is it the-latest technology? These and lots of more questions need to be asked and answered. This will certainly ultimately factor into the long-term strategy of the business.