Fixed assets are those assets that a firm owns or possesses and decides to keep them for future use. For example, fixed capital stock and fixed land are two such assets. The value of these assets is fixed at the time of purchase while their worth changes according to the actual market value at the end of a period of time. Hence, there is a clear link between the prices and the values of these assets.
Fixed asset management is a recognized accounting method which aims to properly track fixed assets for the purpose of theft prevention, financial accounting, and maintenance. It is also known as the depreciation costing method of accounting since the method is based on the assumption that the cost of producing an asset will reduce over time. This assumption of course is only valid if the depreciation takes place over a period of time that is required by the law of the country in which the business property or the asset is located. If, however, the depreciation takes place rapidly – for example, if it happens rapidly after the purchase of the business property or if the business is shut down and all its assets are liquidated – then there is no valid basis for holding the asset back.
Thus, a large number of processes are simplified when one implements fixed assets management software. The system basically keeps track of all fixed assets of the firm and reports all the relevant data about them to the management. The main advantages of using this kind of software are: it automatically identifies assets and removes them whenever they are used, it allows automatic allocation of resources across different projects, and it helps business owners manage the overall costs of their enterprise. These advantages are obtained without reducing the level of service and support to customers. Hence, this software enables smooth functioning of the enterprise at all times.
How does a fixed asset management software helps small business? Small and medium scale industries (SMEs) have limited budgetary resources. Managing their inventory manually can be a very tedious job. For SMEs, asset management software becomes an integral part of their business. Since this software helps to allocate resources effectively, it also facilitates the monitoring of inventories, the allocation of raw materials to finished products, and tracking of sales and profits.
Inventories play a very important role in SME’s growth rate. When a firm expands, it takes a lot of resources to expand the size of its production facilities. It also requires a huge investment in the form of machinery and other resources. To ensure that these resources are not misused, fixed asset management plays an important role.
When a firm expands, it requires more personnel to oversee its activities. This means that there will be a great demand for efficient asset tracking and management software. With the help of this software, managers can easily access the information pertaining to a particular firm’s assets and accounts and obtain relevant information in no time. With the help of this software, managers can track the movements of stocks, sales, delivery, inventory and production and expenditures and plan out the increase or decrease in the resource use. Since this application does not require too much manual intervention, it enables the company to save on payroll expenses. The fixed asset management software also allows the firm to reduce costs by eliminating paper works such as invoicing, making pay slips, processing orders, updating client details and etc.
This software’s concept of asset management helps in the smooth flow of cash and material resources. Since this application is integrated with other functions, it becomes easier for workers and managers to make day-to-day decisions. Since this software reduces the workload and improves productivity, it is highly preferred by many businesses these days. This software provides the enterprise with complete flexibility and control over its various operations. It offers fast decision making ability and helps in achieving superior results.
This software has been developed by several software companies and it comes with various options. It allows the users to create and customize database that enables them to track all their assets, regardless of the location of its usage. Some of the main advantages offered by this asset management software include; easy tracking of inventory, sales, delivery, production, and expenses and financial sales and expenses. This program also allows the users to calculate depreciation on products and supplies that are based on original cost. It also offers complete control over financial activities such as loan accounting and sales and inventory control.