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When companies are in their initial stages, asset tracking or management is not that backbreaking job. Sometimes, employees are enough to handle them manually. However, over the time, when procurement, production, sales and other quantifying data gets multiplied with growing scale of the business, a basic asset management system or manual look-after is not enough. It can result in a sluggish process of production and fatal errors in accounting. While ERP software tools come with asset management modules, most enterprises feel it is too earlier for installing a software to deal with asset management. They fail to realise that an enterprise asset management module integrated into an ERP is a technology-empowered system for organising and tracking assets across the different departments or levels in the production cycle.
Here is the brief explanation of why asset management is a must-have aspect of an ERP software.
#1 Avoid errors or duplication
An efficient ERP software no doubt streamlines and makes management of assets as easy as ever. When there are separate systems to input numbers or make manual entries to keep track of the assets incoming and outgoing, there are most chances of duplicate entries or mishandling of information. EAM (Enterprise Asset Management) in ERP automates all the tasks of data entries as soon as assets are reported anywhere in the chain of production and hence removes any chances of duplication or incorrect estimations.
#2 Determines the current value of assets
Specific asset management system assists enterprises in evaluating the current value of their assets and differentiates them as per their needs like Plant, machinery, vehicles, properties, land. In addition, an advanced EAM module can generate targeted financial reports based on asset evaluation, helping Finance managers to get valuable insights for Tax estimation, asset allocation and future acquisition of assets.
#3 Give clear information about financials
On one hand, an EAM module provides accurate insights of the life-cycle of the assets that enhances predictability about their returns. On the other hand, it helps entrepreneurs to understand how asset management is going to impact the financials.
#4 Better estimation of depreciation values
No doubt, fixed assets of a company involved a lot of investments. Thus, miscalculating their depreciated values while accounting can cause major issues in the Financial reports or lead to non-compliance with statutory requirements. Thus, organisations must stop depending on the manual calculation of depreciation values and instead seek the help of EAM for getting accurate figures.
#5 Enhances the uptime
When employees at different junctures are in charge of keeping track of the assets, it is common to lose track. Mostly happens when there are too many facilities for production and in different locations. EAM system helps enterprises to keep a close tab on their inventory so that they can manage all sales calls, respond to fluctuations in sales, undergo repairs and keep all equipment in proper working order. Any unexpected breakdown in production cycles costs much to a business and EAM certainly prevents that.
These clear facts unfold why ERP software is an incomplete tool with an EAM module. While it has always been a complicated and arduous task for business enterprises to manage their enormous assets of all types, EAM makes it as simple and seamless as possible.