How to Manage the Life Cycle of Physical Assets and Equipment in Your Business

Managing assets of the business is never an easy task, whether they are intangible or tangible. These are one of the important resources, nevertheless, and must be treated with extra care.

Irrespective of how much attention you pay to the assets, there is a high chance that you will mess it up. However, there are some tips and tricks that if the business manages to follow, they can effectively handle assets better.

Let’s have a look at some of these.

Assign an individual or team to take care

There are a lot of things that the business focuses on when managing the operations. It is merely impossible for you to handle all the operations of the business at one time. Hence, an important step to assure the efficiency in the business performance is by segregating the duties. For all the different departments of the business, there must be an assigned responsible individual that handles the job.

Similarly, in case of asset management, a person (in case of a small business) or a team (in case of a larger business) must be appointed to manage the assets efficiently. This will assure that attention is given in managing the assets.

Tracking each asset regularly

As mentioned above, there must be a team assigned for asset management. What this team can do is ensure that all the assets are tracked regularly. From renewing the insurance, to covering the repair and maintenance cost, the team should know how an asset should be treated in order to extend its life.

Not tracking them properly can cause the business to suffer big time. For example, there are businesses that are still paying taxes for the assets that have been completely depreciated and disposed off. This can be a very challenging time for the business.

Figuring out the asset life cycle

An important element for asset management is realizing how long will the asset last. From the purchase of the asset to its disposal, the business must be able to analyze how long can each asset survive. Some people might think why is that important?

Well, if a business understands the life cycle of the asset, they will understand when is the right time to dispose, manage or purchase a new asset. This will help in maintaining an efficient asset management job. Enterprise Asset Management is an excellent entity that can help businesses manage their physical assets well.

Depreciation of the assets

Depreciation charge for the asset is a very important aspect in the maintenance of the asset. People often don’t realize but charging depreciation in the correct manner can be very important for the business. It is important to understand what method of the depreciation is used by the business for which type of asset.

This makes it easier for the business to analyze which asset is available for use and which is not. For example, if the business is using an asset that has been completely depreciated, chances are that it will diminish the efficiency of the business. This can seriously impact the business growth. Hence, proper tracking of depreciation is important.

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