Asset Management Objectives You Need to Know
What is asset management? The definition of asset management is the process of decision making and its application by the acquisition, use, and distribution of an asset. In other words, the core of asset management is asset management and asset collection that is associated with technical, finance, and a good management practices. Asset management is needed to decide what is needed to achieve business goals.
Asset Management Goals
The goal of asset management is to assist companies in making the right decisions so that assets can be managed effectively and efficiently. The purpose of asset management are as follows:
• To ensure ownership status of an asset.
• To inventory the assets and lifetime of the assets owned.
• To maintain the value of assets remain high and have a long life.
• To minimize costs over the life of an asset.
• To ensure an asset can generate maximum profit.
• To achieve optimal use and utilization of assets.
• To secure the assets.
• As a reference in preparing the balance sheet in accounting
Asset Management Cycle
In the implementation of asset management, 8 stages must be done so that the cycle can be formed. The several stages of asset management are as follows:
- Asset Requirement Planning
This is the initial stage of the asset management process where planning is carried out on what is needed in managing assets. For example the need for procurement, inventory, maintenance, and so forth.
- Asset Procurement
At this stage, the asset procurement activities are carried out, for example, goods that are obtained at their own expense.
- Asset Inventory
At this stage, there is a series of activities in the form of identifying the quality and quantity of assets, both physically and legally. Each asset is documented and given a specific code for asset management.
- Legal Asset Audit
At this stage an audit is conducted on the status of assets, procurement systems and procedures, systems and transfer flows. Besides, identification of possible legal issues is also carried out at this stage and at the same time preparing a solution.
- Assets Operation and Maintenance
At this stage, every asset owned is used to carry out tasks and work by their functions to achieve company goals.
- Asset Valuation
At this stage, the asset management determines the value of the assets owned so that the company knows the value, transferred or written off.
That’s a brief explanation of the goals of asset management, hopefully, this article is useful and broadens your insight.
- Write Off
At this stage, the company will assess any assets that are considered unprofitable and will be written off. The process is divided into two parts, namely:
• Assets Transfer, i.e. the transfer of rights and responsibilities, authority, and the use of a work unit to another in its environment. For example, capital investment, grants, and others.
• Assets Destruction, which is the act of destroying assets to reduce assets because they are considered not to be utilized anymore.
- Asset Renewal
In many cases, assets deemed unproductive can be renewed so that they can be utilized again until their economic life ends. The renewal is done in the form of repairing spare parts so that the assets can work as before.