How to Build an Effective System for Tracking and Regulating Business Financial Resources

Any area of ​​business is focused on obtaining material benefits from any operations. Asset management will make this process more efficient, maximize value and help you achieve your business goal. This system is undergoing constant changes, and today it includes full-fledged enterprise software that automates many processes and does the analysis on its own without the influence of the human factor.

Let’s take a closer look at asset management and how to build this system for your business, and most importantly, make it effective.

Definition

Asset Management System (AMS) is a tool for tracking and regulating financial resources of a business. This is one common mechanism that allows you to manage all material and non-material components from planning their acquisition to their exclusion from service. It also includes control over the operation and renewal of assets. By creating and configuring the right system, you can increase the efficiency and productivity of your business, reduce the risks of misappropriation of assets, and therefore reduce costs and increase capital.

Asset life cycle

The life cycle of an asset is all the processes that an asset goes through during the life of an enterprise. During this period, with its help, the corresponding business goals are realized. The life cycle includes the stages of asset acquisition, its use by the company, and the end of operation, followed by the disposal process.

Types of asset management

Each company has its own assets, which differ from each other, so their management systems will also differ. In general, they can be divided into three categories:

• Physical – represent the management of stocks, fixed assets, state assets, and infrastructure;
• Financial – this is procurement management, budget control, accounting and processing of payment transactions, cost control, and general budget;
• Contractual – refer to the management of intangible and technological assets (IT and digital technologies).

You can find your own software for each type. There are also options that combine different types of controls.

Reasons for implementation

If you have an asset management system, you will be able to assess the performance of your finances at any time. In case of problems, it will be easier for you to set up the work and, for example, eliminate unnecessary company expenses. You will also be able to assess what exactly brings you income and make appropriate adjustments to your affairs.

Due to manual research, it will not be possible to correctly assess the performance of assets. Replacing the standard control system with the software will solve this problem. In addition, it will be possible to cope with:

• persistent errors when copying and forming data;
• unstructured assets;
• control and structuring of changes;
• the problem of lack of real-time location;
• lack of answers in terms of cost;
• lack of ability to assess risks;
• impossibility of assessing the state of assets online.

The software will allow you to track hundreds and thousands of assets, make accurate calculations and send all the necessary reports automatically. Correct implementation of AMS will reduce the cost of asset management, minimize the risk of errors due to human factors, save time and resources for the entire company, which will allow them to spend on more important goals.

Asset Management Specialist

An asset manager is a specialist who monitors profitability, standardizes service, modernizes the business, and finds the right channels to introduce assets. He combines several professions at once: administrator, financier, accountant, and programmer, who is also well versed in marketing strategies and internal operations of the company.

The asset manager can be hired on the staff or invited to conduct periodic consultations. He will evaluate all financial flows of the company and give advice on optimal investments to attract even more cash flows.

Principle of operation

The asset management system primarily works on the principle of timely collection and analysis of data produced using the software. Thanks to this, you will always know what is happening in the market, how this or that asset affects your company, and when it is worth getting rid of it due to general changes.

Primarily, the system was presented in the usual table, but today ready-made software is offered for even faster actions. In addition, the latter also has a number of additional capabilities and integrations that provide access to business improvement.

Benefits of asset management software

Key benefits of asset management software:

• tracking all assets of the company;
• the ability to manage assets from anywhere;
• financing planning;
• assessment of operational and legal risks;
• increased activity of restoration, repair, and replacement of assets;
• improving the time management of individual employees and the entire company as a whole;
• formation of a portfolio of assets;
• extension of the life cycle of assets;
• determining the level of customer service;
• an estimate of costs during the life cycle of an asset;
• increasing the stability and growth of the company.

Routine calculations by hand are a lengthy and ineffective process that is often associated with computational errors. Thanks to the implementation of software, all labor-intensive processes will be automated and accelerated.

Asset Management System Implementation Plan

Before implementing software, you should plan your work and develop a strategy. This will allow you to choose the most effective system by assessing your priorities and goals. It is enough to follow 7 simple steps:

1. Take inventory

To do this, you should evaluate your assets: what they are, where they are and in what condition, what is their financial value, and what stage of the life cycle. Also, think over what your wishes for assets in general are.

2. Set goals

Assess what your company is doing and what problems it wants to solve with AMS. Set your desired goals according to the SMART principle, i.e. they must be specific, measurable, achievable, realistic, and time-bound.

3. Calculate life cycle cost

Calculate not only how much an asset is worth upon purchase, but also what its value is during its entire life cycle. Consider what additional costs may be during its use, how much maintenance, performance support, and disposal costs. The more accurate the cost estimates, the more reliable the plan will be.

4. Cost-effective or proactive management

Proactive management is acceptable in the long term, but with a profitable type, you will be spending money evenly throughout the asset lifecycle. In a proactive way, on the contrary, you can spend more money to repair or replace an asset at the time of its breakdown or the end of its life cycle.

5. Calculation of risks

Assets can fail. The main causes of the phenomenon are loss of functionality, lack of demand, operating costs becoming higher than their cost, and there is no funding to maintain the level of service. Assess each cause and calculate the risks to prioritize to minimize them.

6. Create service levels

When shaping service levels, you will collect all data to assess the quality, functionality, and safety of the services you provide. This will make it easier for you to estimate the timing of maintenance, upgrades, and other actions that will increase the operational capabilities of your assets.

7. Assessment, tracking, and long-term planning

Make sure you have control over the situation and can control it. Asset management should be your long-term perspective for the development and success of the company. The financial plan needs to be built several months in advance, or better for a year, in order to immediately assess which goals should be achieved in the first place, and which ones will wait until the next quarter.

Also, pay attention to the ingredients that will support the effectiveness of the management system:

• create a single electronic database to record all information about assets;
• make a timely inventory throughout the entire period of work, making a single register of all assets;
• assess the condition of the assets;
• manage all changes to ensure the data is up to date;
• estimate the real and replacement value of assets.

The main task will be to maintain the efficiency of assets and realize their profitability. To do this, all that remains is to implement the necessary software.

How software can help businesses

The right software will help your business do the following:

• get a return on investment as soon as possible;
• reduce costs;
• reduce the administrative burden;
• improve operational efficiency that can be measured;
• manage all risks and minimize them;
• improve the level of conformity of products;
• reduce the administrative burden.

The software will keep your company up-to-date and empowering. In 2019 about 60-71% of businesses, did not use all of their data to collect analytical data. Such an omission could cost companies millions. The software implementation will help to analyze the information of the past years and make a deeper analysis of the data.

Cloud software

Cloud software options are offered for asset management. Unlike licensed ones, they are more versatile and convenient:

• are available online from all mobile and stationary devices;
• access to the software is opened only using account data;
• all data is stored in the cloud, which excludes the possibility of their loss;
• take up a minimum of storage space;
• there is no need to buy a licensed version, which is not only expensive but also takes up a lot of disk space;
• all updates and modifications are installed by the developers, so there is no need to waste time on this.

All data is securely hidden in the storage and available upon the first request. In addition, they easily integrate with other applications for greater company efficiency. Safe storage of data on cloud media allows you to minimize the risk of cyberattacks and exclude the possibility of leakage or loss of information.

A big plus of cloud software is the low monthly usage fee. In case it does not suit your needs, or you simply expanded your capabilities and want to use other software, you will not lose a large amount of money. You can always quickly change it for any reason. When using a licensed financial management system, you still have to lose more. you have already paid a large sum. In addition, backing up data between different cloud software is faster, and most often licensed does not even have such an opportunity.

Price

Asset management software pricing is based on the number of features and capabilities in it. Some set a price for the number of users who can participate in working with it, others are guided by the number of assets.

For example, cloud-based software requires a certain amount of money for monthly and yearly subscriptions, providing a set of features corresponding to the amount of payment. Licensed can also charge an annual maintenance fee, but more often, they charge it a one-time fee upon purchase.

The average price for cloud software is from $60 to $180 per month, and the licensed version will cost about $1,500- $3,500. The “before” value is not a final increase in cost, there are software options that ask for a lot of money, but in return, provide many important integrations and functions.

There are also free versions in both options. They have a limited number of functions, so they are only suitable for small businesses.

Assistance in audits

Both private and public enterprises are required to conduct accurate audits of their assets. For example, non-profit organizations and educational institutions can lose their grant due to incorrect accounting. Other organizations may have problems with lenders or the IRS.

An audit should be performed at least once a year with a detailed description of all assets. Every year the requirements for its implementation change and become more stringent, therefore, it is impossible to do without the introduction of an effective management system.

Thanks to the software, the entire audit process will be automated and simplified. With it, you can view each asset in detail, assess their payback, determine the service life and the purpose of taxation.

5 popular asset management software

There is no perfect tool that fits all parameters. Choose the software based on your needs, and remember that you can always integrate additional features to improve it.

We offer for consideration 5 of the most popular asset management software that will help you cope with many tasks.

1. ServiceNow

ServiceNow software is targeted at different business areas and solves the problems of asset management, financial information, and inventory. It also audits and monitors resources. All standard tools are collected in one, which increases the efficiency of the company without constantly switching between functions.

Pros: simple interface, a large set of working tools, and easy customization of reports.

Cons: at the start of using the software, you will have to spend a lot of time setting up assets and rights to them.

2. Kissflow Finance and Operations Cloud

Kissflow Finance and Operations Cloud software offer standard toolkits for remote asset management. The first software is suitable for enterprises of all sizes, while the second is suitable only for small companies.

Pros: user-friendly interface and access on all devices

Cons: layouts have a simplified look, which can be inconvenient to work with.

3. SAP ERP

Until recently, SAP ERP software was not adapted for asset management. Today it is a powerful tool that is easy to configure and adapted to work with any area of business.

Pros: Complete set of tools.

Cons: Lack of software flexibility on the maintenance side.

4. IBM Maximo

Maximo is a continuous inventory, asset, and procurement management software. It has a sufficient number of additional integrations that will expand capabilities and increase efficiency.

Pros: great functionality and integration options.

Cons: inconvenient interface and lack of proper interaction with mobile devices.

5. Oracle E-Business Suite

The comprehensive software Oracle E-Business Suite has great functionality for asset management and reporting. It integrates easily with various applications thanks to the REST API.

Pros: flexible software with a user-friendly interface.

Cons: high subscription and service costs.

Conclusion

A software-based asset management system is critical to business performance. This market is projected to grow to $ 27.4 billion by 2025. Proper asset management allows you to save costs and maximize their use in your work.

Choose software according to the needs of your enterprise, pay attention to the most popular ones, and do not be afraid to use each one in turn to evaluate all the functionality. This will help you choose the best one for you and achieve your business goals faster.