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In this review, we will tell you about storage asset management, but before that, it would be nice to know about the meaning of asset management. The definition of asset management in general is a process of asset management owned by individuals, organizations, and companies that is carried out effectively and efficiently so that predetermined goals can be achieved.
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Some experts have their own views on what the definition of asset management is like:
Gima Sugiama (2013)
Asset management is a science or art that provides guidance in wealth management. These activities include the process of planning, obtaining, assessing, operating, maintaining, renewing, and eliminating, to transfer assets effectively and efficiently, including inventory and legal audits.
Asset management is a structured process that includes all assets as a wealth to support the provision of services. The concept of managing or simultaneous management of assets and liabilities was first developed by the banking and insurance industries.
However, you can use this concept to improve the operational activities of any business including SME business.
Kaganova and McKellar
It is a decision-making process and its implementation in accordance with the acquisition, use, and division of these assets.
Danylo and Lamer (1999)
By asset management is meant a methodology to efficiently and fairly allocate resources between valid and competing goals and objectives. The set of activities carried out related to asset management are (Hastings, 2010, 2015):
- Identify the assets needed by the company.
- Identify the feasibility or need for funds owned by the company.
- Acquiring or acquiring assets.
- Provide logistical and maintenance support systems for assets.
- Deleting and renewing assets so that they can meet the company’s goals effectively and efficiently.
Why Is Asset Management Important For Companies?
Asset management is needed for making the right decisions so that assets can be more useful. It is determined by various dimensions and points of view. Assets that are managed effectively and efficiently can achieve the goals that the company expects.
Asset management is not just the management and recording of inventory lists and assets owned. Optimization of assets should be carried out in order to prevent losses borne by the company.
The company’s assets must be reviewed every year to see if there are any assets that can still be used or should be replaced. Every company must know the assets that can still be managed or have time to be replaced.
With good management, the company can reduce expenses and increase cash income. Asset management can be done by involving all parties at the management level so that decisions can be implemented properly in all parts of the company.
It’s like, you have to consider assets and liabilities as a combination that creates profits and risks for your business. You must really utilize business assets effectively and efficiently to bring profit to your business.
And it is expected that you will not increase business obligations much more than the company’s ability to pay off those obligations in the future. Your decision regarding when is the right time to buy or sell an asset and take on liabilities should be thought about by you.
You don’t need to worry, because everything related to asset management can be easily done with the help of an asset management application. By using an asset management application, you will get a report that displays a list of fixed assets with the initial acquisition price, accumulated depreciation, to the value of assets so that it can make it easier for you to manage.
Benefits and Objectives of Asset Management
The following are some of the benefits of asset management for companies:
Maintaining Asset Value
With asset management, companies can keep the value of their assets high, have a longer life, and avoid damage to assets that can cause a decrease in selling value. To maintain the value of assets, the company must provide adequate operational costs so as to produce high output and in accordance with the company’s goals.
Monitoring Asset Depreciation
Depreciation is one of the risks of using fixed assets, ranging from depreciation of functions to values. However, with asset management, it will be easier for companies to monitor depreciation.
Make Budgeting Easier
With asset management, it will be easier for companies to make plans that concern asset funding such as funds for purchase or construction, maintenance, to funds to extend life and write off company assets.
By implementing this, companies can more easily control assets properly so as to avoid unnecessary purchases. In the absence of asset management, the company will have difficulty in determining the priorotas for the provision of goods.
Creating Risk Management
Risk management is a method of managing uncertainty related to threats, such as risk assessment. This is very important because it can create company awareness about the dangers and risks of the assets they have.
With asset management, companies can reduce risks by adding the necessary control measures and making measures for prevention.
By implementing asset management, the assets owned by the company will be stored properly from the first to the end. This can reduce the risk of losing company assets. While the objectives of asset management can be summarized as follows:
- Ensuring the ownership status of an asset.
- Inventorying the wealth and lifetime of the assets owned.
- Keeping the value of assets high and having a long life span.
- Minimize costs over the life of an asset.
- Ensuring an asset can generate maximum profit.
- Achieve optimal use and utilization of assets.
- For the purposes of securing assets.
- As a reference in preparing the balance sheet in accounting.
- Asset Management Cycle
There are 8 stages that must be done in the asset management cycle, what are they?
Asset Needs Planning
The first stage is to plan the company’s asset needs and make a management plan both in the short and long term. This includes procurement, maintenance, inventory, and other needs. This process aims to minimize losses and increase profits.
Furthermore, the company procures assets by purchasing goods or services as needed. This can be done alone or use other parties to provide the asset.
In this stage, the company carries out an inventory process such as recording and checking the quality and quantity of assets. It should also be considered whether the asset has a good condition physically / non-physically and juridically / legally. Each asset is documented and assigned a specific code for management purposes.
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The next stage in asset management is legal auditing or legal due diligence. It aims to check the ownership status, procurement procedures, asset transfer systems and flows and find solutions if the assets are entangled in legal problems.
Operation and Maintenance
At this stage, each asset owned is used to perform tasks and work in accordance with its functions to achieve company goals and carry out maintenance so that it can be used in the long term.
Pada tahap ini perusahaan menentukan nilai aset yang dimiliki sehingga dapat mengetahui in detail the value of the wealth owned and the history of assets that have been transferred or written off.
Types of assets that are considered unprofitable will be deleted where this process is divided into two parts, namely:
Transfer of assets, namely the transfer of rights and / or responsibilities, authorities, and utilization of a work unit to another work unit in its own environment. For example, capital participation, grants, and others.
Destruction of assets, which is the act of destroying or destroying assets to reduce assets because they are considered unusable.
After use for a certain period of time, the value or function of the asset may depreciate. Assets that are considered unproductive can be renewed so that they can be used again until their economic life ends.
The renewal or rejuvenation is carried out in the form of repair or replacement of spare parts so that the asset can work as it was in its original condition.
There is one more step to keeping assets safe. One way is to use an asset management application. Asset management applications allow you to automatically monitor, track, and categorize your company’s physical assets in the form of products, engines, vehicles, or other objects that are the responsibility of the company.
Applications whose databases are stored on cloud servers, make companies not have to worry about server rental and maintenance costs. Before deciding to use an asset management system, you need to consider which assets you need to manage. Company assets will be better if you consider which assets spend money on their operations.