Fixed asset management and maintenance is crucial for any business. You may think maintaining fixed asset registers is unimportant because you can calculate your assets easily.

But what happens when your business grows?

You need to add assets frequently, and it would be hard for you to calculate your assets.

Fixed asset register helps you keep your business running optimally under any circumstances. You need to have an updated fixed asset register, or a lot of gaps may come up.

Below are some benefits of having a fixed asset register. But let’s get to the basics first.

What Is A Fixed Asset?

Also known as capital assets, fixed assets are those assets that help you generate revenue. They include machines, equipment, vehicles, etc.

Businesses purchase fixed assets for the long term. You cannot easily convert them into cash.

What Is A Fixed Asset Register?

A fixed asset register is the complete list of fixed assets owned by your business. It includes all the asset-related information such as:

● What an asset is

● Asset location

● Purchase price

● Purchase date

● Maintenance details

● Expected asset life

● Expected asset value at the end of its useful life

The purpose of the fixed asset register is to keep accurate data about each asset. This helps you utilize assets correctly whenever required.

Furthermore, the asset register helps you monitor the asset and depreciation value. Finally, you can simply use a spreadsheet or opt for asset management software to keep track of everything.

Advantages of Managing a Fixed Asset Register

There are a plethora of benefits of maintaining fixed asset registers, as mentioned below.

All the Asset Details Will Be at Your Fingertips

A fixed asset register helps you keep all the details of your assets that can be helpful in decision making.

● What is the asset status?

● Which assets do you need to dispose of?

● How frequently do you use the assets?

● Where can you find the assets for the audit trial?

When you are aware of your assets’ whereabouts, your audit team would be able to verify assets physically without any hassles.

Detailed information about assets provides you with critical data on the asset expenses, average life, and asset utilization. Such information would help you set your future goals right.

Helps You Comply with Regulations

If your reports are inaccurate, you will end up paying hefty penalty charges for violating rules. You wouldn’t want that, right?

An IT asset register can be of great help here as it provides precise data. This helps you avoid all compliance-related issues.

Ensure Your Assets Are Well-Maintained

You may not give much importance to asset maintenance, but in reality, it plays a crucial role in growing your business. So, to avoid sudden asset breakdown, you must strengthen asset maintenance.

You may not find this fruitful in the short term, but you will have significant savings on your bottom line in the long run.

A maintenance strategy helps you increase asset productive life, reliability, safety, and efficiency.

Predict Cost and Expenses

You can easily predict CAPEX and OPEX when you can see particularly how your fixed assets are performing.

Running a business involves a lot of bureaucracy, and a fixed asset register can help.

When you use fixed asset registers to monitor and maintain data of all your fixed assets, you can streamline insurance and tax proceedings.

Zombie and ghost assets will restrict you from reaping the full rewards of tax reliefs and could also create significant fines for your business. Fixed asset registers can prevent this.

It also helps you prove ownership and use your fixed assets responsibly. Any payout becomes much more straightforward and doesn’t need as much wading through red tape.

Track and Optimize Your KPIs

A fixed asset can help you re-evaluate your key performance indicators (KPI). And as you can track your assets’ performance efficiency, you can identify how economical and effective they are.

You can improve critical KPIs like your fixed assets’ output by replacing uneconomical assets. Also, you can track depreciation which helps you make practical decisions for your business.

Your team members will benefit from well-maintained equipment and tools. And having an IT asset register will help you lower your downtime and ensure optimized asset usage.