How to Manage The Fixed Assets of The Company?

When carrying out the accounting of a company, it is necessary to take into account both the fixed and circulating assets of the same. The latter are assets, rights and credits that can be transformed immediately or, at least, within a period of less than twelve months.

On the contrary, fixed or non-current are the most durable. They could be defined as those goods or rights that have been acquired to be used by the company in the normal development of their activities and not to be commercialized.

Examples would be the ship where the products are manufactured, the tools that are used to make it, or the truck that is used to distribute them. However, the same good can be for a fixed asset management companies an asset of fixed type, while for another it is circulating. In the example of the truck, for a business that is dedicated to selling heavy vehicles, that truck would be a commercial product and not a fixed-rate asset.

Types of fixed assets

On the other hand, there are basically two classes of fixed-rate assets and both have value for the company, in addition to having to be reflected in their accounts with the corresponding amortizations. They are the following:

Tangibles

It is about the material goods that can be touched, of the company. The fixed asset management companies itself establishes as tangible the land and natural assets, for example, a site; the buildings, such as the aforementioned case of the ship where the company carries out its production; the machinery used for it (it includes not only the machines themselves, but also the vehicles and tools); the technical facilities, such as assembly lines; the furniture of their offices; equipment for computer processes, or computers, printers, etc.; the transport elements and, finally, other goods.

Not tangible

They are the most difficult to quantify, because they lack materiality, but they also have an economic value. Among them, are the brands of the company itself, that is, the names of products that have registered? Also patents, or articles created by it (for example, a software of its creation), and copyrights. Likewise, permits, licenses and franchises, through which the company has acquired the right to use a good or brand of another.

Inventory of fixed assets

Therefore, these assets have an important equity and financial value for the company. Hence the importance of having a good inventory of them. This should include its main data: code, physical situation, description, value and depreciation, status and useful life.

The correct registration of these assets allows the company to make decisions in financial and fiscal matters. As for the first one, it reflects in its accounts both the amortizations as well as the expenses and income generated by those assets and, with respect to the second, that inventory helps it to optimize its taxes in accordance with the laws in force. It also allows you to save costs by reducing your investments in unnecessary goods.

Therefore, all companies must perform, at least once a year that inventory of fixed-rate assets and permanently keep track of those that are in operation in them. Likewise, it has to do correctly the calculation of depreciation of each of those goods and track those that have depreciated to decide what to do with them.

Why Does An Enterprise Need Fixed Asset Management System ?

The term “fixed asset management system” is frequently discussed within the echelons of business enterprises and retail audit companies in Delhi. The asset of a company, as we are all aware, has both active and passive participation. They also need to be tracked, located, made to go through analysis especially when the organization works in multiple locations.

In other words, fixed asset management companies serve as vigilantes as far as the performance of the assets goes. This enables the business organization to plan preventive maintenance and breakdown repairs.Capitilization and valuation of assets are also taken care of. Some of the most common assets that a company tries to maximize their return on, are manufacturing plant and equipment, ancillary units of the main organization, vehicles, IT equipment etc.

Capital expenditure for performing and non-performing assets can also be managed well with the proven excellence of fixed asset management companies. It must be understood in clear cut-terms that over-reliance on spreadsheet reports can backfire and may result in miscalculating depreciations. Furthermore, it can result in errors in financial reporting or failure to comply with statutory requirements.

Here is break down of the analysis as to what business houses provide in fixed asset management system.

• Information about the asset is the first and foremost of all the components that a business would like to know. The fixed management companies furnish the asset quantity, depreciation rates, maintenance schedules etc. These reports are important to increase the efficiency of the assets and they also segregate all those assets that need to be phased out in near future. Reduction of asset downtime is reduced to make an easy physical audit.
• Effective tracking is critical to any company that has its focus on asset management. But the fact that they only have spreadsheet reports to fall back on causes errors in the procurement of assets and leads to missing of asset assignee information. A reputed fixed management company like cac uses the method of RFID & Barcode Technology that develop customized reports, reduce pilferages. The business firms also get the option to update asset information regularly.
• Many companies have been found to be failing to comply with the policies defined by the government albeit inadvertently. Since the businesses are obligated to file their reports under Companies Act 2013 and Income Tax Act, India, these fixed asset management companies also undertake the tasks of filing the reports and customizing compliances to various accounting principles and jurisdictions.
• Maintenance of assets and its security is no less important since a detailed asset report on maintenance can also identify assets under warranty. These report give the past, present and future maintenance plans for capital projection so the cost of large-scale repair can be approximated. And finally, security of the assets is ensured by the fixed asset management companies that create a transparency between both the parties. The security system provides the business firms the best of the structured workflow.

 

 

Currents Trends in Fixed Asset Management

The latest trends are making asset management systems more attractive. Several teams have emerged that are having a marked impact on the market. We tell you below how the information regarding equipment, materials and even processes, available to managers as well as employees involved in a specific area of production, brings multiple benefits.

The importance of fixed asset management systems

Fixed asset management systems are essential, without a doubt. And it is enough to see that in large companies, where they have thousands of dollars in equipment and machinery, the staff sometimes cannot find them and ends up replacing them, unnecessarily.

Compliance outsourcing companies can manage their fixed assets well, so that their employees have easy access to information on the processes and location of the equipment, thus saving utilization and disposal costs by eliminating inefficiencies and even unnecessary duplication of equipment.

Another trend is that manufacturers are currently looking for greater transparency of work in process. In such cases, at the reception desk someone creates a work order, it arrives at the production area, the employees are assigned, and the task begins.

The problem is that the assigned workers can have access to the work order, but they do not have a collective vision of what is happening in the plant, including if there is a more urgent project. This reduces production inefficiency, which could damage the image of the company.

If they had access to this information, the entrepreneur would be in a better position to allocate more efficiently the staff, restore priorities, and so on. And it is not a better point because each delay can result in serious financial consequences.

New programs for a better management of fixed assets

With the arrival of new programs and transaction advisory services India, the market is also witnessing greater observation in terms of equipment and tools, as well as more frequent audits. Is that any equipment or tool that is not maintained correctly, is subject to quality problems, fines and possible breaches of contracts. Given this, there is an increasing need for transparency in the work processes.

Also, the materials are under the observation of fixed asset management companies in India. The useful life of certain elements that require specific conservation conditions can affect multiple jobs in a plant. So, it is essential that the manufacturer ensures, through proper management of fixed assets, that these materials will be used at the right time and in the right way.

Retail audit firms in Delhi contains detailed information about these items, including their locations at various times. Having that knowledge can allow manufacturers to chart the most efficient use of that material’s life.

So, it is clear that the use of a fixed asset management system has multiple benefits. The trends let you see clearly. Finally, managers or representatives of companies should bear in mind that the fact of adequately managing this area of opportunity, can bring financial, fiscal and operational improvements. To better manage the resources that are already available, is a low-cost strategy for implementation, fast results and sustainable over time.