With rising shopper worries about the ecological effect and data security, all organizations should consider how unproductive assets need to be disposed of! As assets can be a danger to the environment and it can create compliance issues. Nowadays Organizations keep track of their asset and keep maintaining them but do not pay attention to asset disposal. Asset & equipment disposal needs to be done in the right way. Otherwise, it can impact your business as we have discussed below. Asset & equipment disposal is as important as any other activities related to assets and pieces of equipment.
Excess IT resources are discarded. The risks of not having a solid, reasonable IT resource removal process are more significant than you might naturally suspect.
What Is Asset Disposal?
Asset disposal is an important thing that all organizations must do on regular periods. Basically, asset disposal is eliminating all records of a specific asset from account books when its productive life is over, and organizations sell it or scrap it.
It is essential for organizations to keep track of asset disposal, as assets are costly, and understanding the disposal cost assists organizations in maintaining correct records.
Furthermore, as we know when asset life is over asset breakdowns are more frequent and it can raise safety issues for employees as well.
Recommend To Read: What Is the Importance of Condition-Based Asset & Equipment Monitoring?
What Is the Disposal Value?
Disposal value is the excess worth each equipment has! Many organizations keep equipment until it has arrived at the end of its usefulness. However, some organizations declare scrap value which helps in generating some revenue that is asset disposal value.
When an organization discards its assets, it is important to note down the equipment & asset disposal value in accounting reports & data.
What Is the Importance of Asset Disposal?
Asset disposal needs to be done because it is helpful in creating more space and productive assets can be used in place rather than just taking space doing nothing.
However, you must dispose of assets in the right way. Inappropriate removal of any electronic gadget can result in serious ecological, reputational, and monetary outcomes
Utilizing a legitimate ITAD (IT Asset Disposal) organization for your asset disposal is the securest method for guaranteeing the appropriate annihilation, reusing, or reuse of your resources.
According to Markets and Markets, “The IT asset disposition market is expected to grow from USD 14.5 billion in 2021 to USD 21.2 billion by 2026; it is expected to grow at a CAGR of 7.9% during the forecast period”.
What Are the Best Practices to Monitor Equipment Disposal?
Below we have discussed best practices for equipment disposal:
1. Take Data Backup
Usually, an organization’s assets and equipment are used for the long term. These pieces of equipment have crucial information which you need to ensure that you have taken back up all data before disposing of these assets.
This data can be extremely useful in terms of making crucial business decisions and what to expect from these types of pieces of equipment.
2. Track Equipment for Disposal
It is particularly important to gather all information while purchasing and procuring assets. Otherwise, it will be confusing to know when asset disposal needs to be done.
Furthermore, you will not be able to track depreciation as well. Depreciation is useful for tax savings. Many organizations exchange their old assets whose life ended are exchanged for the new ones & get a discount on new asset purchases.
3. Partner with Professional
There are many motivations to go to an outsider with regards to asset disposal, from following guidelines and complying with rules as per industry to safeguarding clients and workers, to meeting guidelines for e-waste reusing.
Partnering with the right professional ITAD service provider can be an important practice for asset & equipment disposal. It will save your time & resources and you will not have to worry about asset disposal anymore as the professional will be taking care of asset disposal for you.
4. Invest in Automated Software
One of the most important best practices for equipment disposal is to equip the organization with an automated equipment management system.
When the manual process is eliminated, the organization will not have to keep track of equipment manually as this software will alert team members about when specific equipment needs to be disposed of.
With this software, organizations can keep track of asset maintenance and asset depreciation as well. This software provides several methods for depreciation calculation. It assists organizations in reducing tax payable amounts.
Ensuring that equipment disposal is done on time is particularly important. At the same time, you must ensure that all data is retrieved, and no information is lost.
However, it becomes hectic and complex when you have lots of assets and equipment to take care of, and usually, these assets are located in multiple locations, so it becomes more complicated. That is why investing in effective asset management software is the need of the hour.
Frequently Asked Questions (FAQs)
Q.1 - What Are the Types of Methods for Calculating Depreciation Value?
There are two types of methods used for calculating depreciation value first is the straight-line method and the other is the double-declining method. Within automated software, you get both depreciation tracking methods.
Q.2 - What Are the Reasons for Disposing of Assets?
Below we have discussed a few main reasons why asset disposal needs to be done:
1. When an asset is depreciated completely.
2. Asset life cycle is over or no longer useful.
3. Frequent asset failure or too much maintenance.
4. Exchange it for a better option available.
Q.3 - Which Type of Organization Can Use Asset Disposal?
Asset disposal can be used by any organization which is asset-intensive and most importantly their assets are in distinct locations. These organizations can be oil and gas, hospitality hospital, automobile, manufacturing, construction, etc.