Bracing a Business for Recession - Part Three

An automated fixed asset management system can also help streamline workflow processes, according to Scholes, since many companies keep multiple asset logs, depending upon the type of asset and the division of the business that is tracking it, such as accounting, IT or maintenance. “Without a consolidated asset management system, these asset registers end up having conflicting and often contradictory information. A unified asset management system offers a more streamlined approach – one asset register – that provides customizable/user-defined dashboards that show each user and department the information and reporting options they need. It also helps reduce inconsistencies and wasted staff time that often causes businesses to run lean.”

Such systems also allow for advanced forecasting and budgeting. “Simply rolling over depreciation year-to-year is a blunt instrument and it can give management only a very rough summary of potential data with no allowance for other changes,” said Scholes. But when using an automated asset management system, financial directors can produce much more accurate forecasts that can take into account variables such as asset disposals, planned investments and the effects of specific actions on financials and future tax liabilities.

Another benefit of having an accurate asset register is the ability to quickly determine asset losses for insurance claims in the case of disaster, while also enabling the company to track the location and determine the condition of potentially affected items that need to be re-evaluated or disposed of. “Incorrect or non-specific asset registers can result in painstakingly long hours spent reconstructing and re-auditing asset bases at a time when the business’ resources need to be focused on recovery,” according to Scholes.

Both Tecklenburg and Scholes agree that an organization’s fixed assets are critical to its fiscal health, but unfortunately, these items are frequently managed ineffectively, potentially costing a business hundreds of thousands of dollars a year.

That’s where Scholes sees that a consolidated asset management system can offer multiple methods to decrease near-term expenditures, which can aid a business looking to strengthen itself in the face of a possible recession. “Responsible asset management also provides more accurate financials and forecasting capabilities and gives an organization’s management and shareholders a more realistic overview of the true fiscal health of the enterprise. This, in turn, creates more responsible corporate governance and can increase investor faith.”

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