What really is causing the accounting practices to grow popularly as a business these days? The question in not very tough to answer. It is understood that every organization has to keep track of the assets owned and the ongoing expenses that incur. Assent management is merely a term that is used to refer to the processes that entail operating, maintaining, developing and selling assets ensuring cost-effectiveness. Why do you need to employ the services of an accounts team to manage your business assets?
- Identification and management or risk
Note that certain risks come with the ownership and utilisation of assets. An accounts team will be able to identify risks that come with the assets in good time. Examples of such risks may include over maintenance, under maintenance and improper use. A good accounts team will help you identify and manage such risks. What that means is that your firm will always have contingency plans in place.
- Keeping track of the business assets
The other reason why your business needs an accounts team to manage its assets is that it will make it easy for you to keep track of your company’s assets. How does that help? Well, there is a need for you to know where your assets are located and how they are being used. It, in turn, prevents the loss of assets and ensures that they are used effectively. Such results in higher revenues for the organisation.
- The accuracy of the amortisation rates
You need to keep tabs of your assets. Failure to do so will only end up with you not having the most accurate information regarding your amortisation in your financial statements. Neglecting the financial statements could lead your business to incur losses.
- Asset recovery
An active asset recovery will only be possible if there is a useful asset management strategy in place. It includes having an accounts team on board. What contribution does asset management make to asset recovery? Asset recovery entails identification, redeployment and disposition. The three are functions of asset management.
Once unproductive or surplus assets are identified in the process of asset management, a decision has to be made on whether to redeploy or divest the asset. Asset recovery through redeployment saves the organisations costs that would have otherwise been used to purchase new assets. Disposition as an asset recovery strategy entails selling the asset, donating or recycling it. By so doing, the asset is scrapped off from the books and generate capital that can be pumped back into the business. Donations can also deliver tax benefits and build goodwill for the company.
- Save on maintenance costs
As earlier mentioned, failure to manage assets could lead to either over maintenance or under maintenance. They both come with financial implications on the business. For instance, if you overdo it, you will eat into the profits that the organisation is making. Under maintenance of the assets, on the other hand, could lead to low productivity which will lead to fewer gains or losses.
Asset management improves the efficiency of operations in a business. With a good team on board, you will be aware of the capabilities of your assets, and you will be in a better position to make decisions for maximum utilisation.
Proper asset management ensures that theft is also countered. As much as the services might cost you, the benefits of asset management are priceless. Find the right team and let them help you take care of your assets to improve the productivity of your business.