There are rapid innovation and progress in terms of technology globally. In the last decade, technology has got its transformation in the field of distribution of goods and services fundamentally.
In many industries, nowadays data analytics and digital applications are being used more than ever before, which has helped them compressing value chains and reduced costs.
Moving forward from the previous industrial revolutions, today the wave of technological change has allowed for more personalized interaction with individual consumers rather than just 2nd or 3rd party clients. It has also emphasized the outcome of a purchase i.e., transforming transactions into relationships.
What is Revenue meant for a business?
According to Wikipedia, revenue is known as the income that a business has grown from its normal business activities, i.e., from the sale of goods and services to customers.
Revenue is also referred to as sales or turnover. Some of the companies receive their revenue from the interest, royalties, or other fees.
Revenue may refer to business income in general, or it may refer to the amount, in a monetary unit, earned during a period of time.
How to increase revenue for a business?
For any business, sales are the most important activity to get engagement. Sales of the company allow to hire more people, buy more equipment, or manufacture products or deliver services. In a perspective, without sales, there will not be any future for a business.
Following are some strategically effective factors that will help you to raise revenues:
- Product compatible strategy.
- Good understanding of the customers' motives and demands.
- Effective implementation of the strategy.
- Awareness of the strategy being copied by the competitors.
- Effect of the future economy on the business.
It is always good to implement one strategy at a time but it is you and your employee's effort which can make the strategy work. Thinking wisely and playing on your employee's efforts you can implement more than one strategy to greater the impact on revenues.
What are the expectations of asset management software to increase revenue?
Common Requirements of Asset Management System are:
- Simple and Easy Asset Addition
- Easy Calculation of Depreciation
- Simple Financial Asset Management
- Automated Asset Lifecycle Management
- Unique Asset Tagging & their Periodic Scan for accuracy
- Scheduled Preventive Maintenance
- Asset Performance Reporting
- Audits and Physical Verification of Assets
Asset management software best practices
Asset management software as a best practice stands because of:
What you have as an asset
The organization shall always know about the totals assets they own and procure and how are they being utilized. It is nearly impossible to convert an accurate picture of total assets in the organization.
With automated asset discovery tools and tracking techniques, you will acquire all the data and information regarding your business assets at a single platform. You will not require several different tools like spreadsheets to record the information.
Through automated software, you will receive real-time data about the were being of your asset, its assigned person, its condition, about its shelf-life, etc.
Understand monitoring and management
It is always important to manage and monitor your business assets right from their procurement to their depreciation i.e., throughout their lifecycle.
Depreciation is important as it allows a portion of the cost of an asset to the revenue generated by that asset. As the revenue is associated with the related expenses in the accounting period in which the asset was in use. Hence, it gives the complete idea of revenue generation transaction.
For example, an asset was purchased by the company for $50,000 and the value of the asset for over 10 years of its useful life will be its salvage value, i.e., $10,000. Using these variables depreciation will be calculated dividing the difference of cost and salvage value of the asset by its useful life years.
Here is another example:
($50,000-$10,000)/10 = $4,000
So, $4,000 will be the depreciation expense of the asset at the end of every year.
Daily changing market and demographics will push asset management to become the center stage. As banks and insurers will get regularized for their abandonment of propriety investing and other simultaneous businesses. The assets age, retirement, and health will appear to be the critical issues to which asset management will be the only handler.
The asset management solution on the cloud is more flexible and up to date. Keeping data online makes the process easier for the user to view updates immediately instead of manual updates across various devices.
The potential to make most of the new technologies and promote highly qualified experts are the major factors for the success and implementation of a unique value proposition.
Also Read: Why should assets have a unique asset code?
How Asset Management System can increase your revenue?
Some of the major features of an asset tracking system and how they are helpful, are given below:
1. Asset tracking & management
It is the method to track down your physical assets, using several techniques and methods including barcode, RFID, NFC tags, etc.
Asset tracking is important for your organization, for its foundation and compliance, it lets you know the location of each asset & informs you about those assets which have come to an end of their lifecycle.
Any kind of change in the movement of devices is recorded for future reference if needed. These changes in movement may include:
- IP Address change of IT device
- Physical relocation of Asset
- Asset removed from the network
- Installation and uninstallation of the asset
- Expiration of asset license
The main objective of an asset tracking system is to maximize asset control and minimize equipment loss.
Businesses should implement the asset tracking software with advancements like fixed scanners, bar codes, asset tags which will generate a report to managing and track the assets.
There are few things that organizations can do to manage their assets in a better way.
- Finds Ghost Assets
- Extend Life Cycle
- Minimizing Asset/Equipment Loss
- Precise Asset Information
- Save Time & Money
- Scheduled Maintenance
- Maximize Asset Efficiency
- Establish Compliance
Check-in/Check-out system is focused on circulatory records of the assets owned by an organization. It involves the information like who has the asset currently and when it will be returned.
This check-in/check-out out of assets can be checked through the barcode label attached to the asset. The system creates a library in the database which records the information to whom the asset has been issued and its returning date.
Benefits of Check-in/Check-out System are:
- Accuracy - Complete information about where each and every asset is and with whom.
- Simplicity - Quick process with few scans.
- Efficiency - Less time required to locate items.
- Accountability - Hold each user responsible for all the items they use.
3. Maintenance Management
Regular maintenance of the assets is mandatory to keep the business growing as the word maintenance does not always mean to repair. What maintenance really means is to follow up with the regular or methodological processes to keep the equipment and asset up to date and in a healthy working condition. It does not only mean to repair a piece of equipment only when it is broken.
The equipment should be lined and labeled, its wearing surfaces should be examined and replaced, oil schedules should be lined up at regular intervals.
Hence, the equipment with good working conditions requires regular inspection and adjustment to continue to produce good quality products for a long time.
Without or in the absence of equipment management, it might be possible to face some consequences in revert of careless decisions. Some of them are:
- Production loss
- Rescheduling of whole projects
- Material wastage from resources that have not been used yet
- Over time of labor because of downtime
- Disposal of machinery and equipment before the end of its useful life
You can ignore any kind of mishappening by strategizing an equipment maintenance system in your organization.
There are few intents you will need to know and remember while programming equipment maintenance in your business, like:
- To plan and set some quality and usage standards for the staff internally, that too based upon your asset type.
- And, to conduct careful repairing, when proper consultation is done from the side of the concerned department.
- Also, to document all the activities thoroughly. It will make it easier for you to track the repair history and calculate depreciation for timely disposal.
- To complete all the daily tasks and more, within their deadlines in order to stick to the maintenance plan.
4. Re-order Management
An inventory management system helps you to track and control the company's supply so that you can optimize your inventory and manage them without spending extra time and money.
The most integral part of the inventory management system is to evaluate your business on a regular basis to ensure your path towards success track.
Inventory management is a technique through which stocked goods, inventories, and non-capitalized assets are kept in a proper manner according to their specific shape and placement.
It is a process of ordering, storing, and using inventories. This stock management includes generating the lead on raw materials, components, and finished products, along-side warehousing and processing of such items in your company.
The objectives of inventory management are as follows to:
- Ensure a continuous supply of materials and stock so that production should not suffer.
- Avoid both overstocking and under-stocking of inventory.
- Maintain the availability of materials whenever and wherever required in enough quantity.
- Optimize various costs indulged with inventories like purchase cost, carrying a cost, storage cost, etc.
- Keep material costs under control as they contribute to reducing the cost of production.
- Eliminate duplication in ordering stocks.
- Minimize loss through deterioration, pilferage, wastages, and damages.
- Ensure everlasting inventory control so that materials shown in stock ledgers should be physically lying in the warehouse.
- Facilitate furnishing of data for short and long-term planning with a controlled inventory.
- Supply the required material continuously.
- Maintain a systematic record of inventory.
- Make stability in price.
5. Depreciation Management
It is crucial to analyze how your organization utilizes depreciation. It can be regarded as an important part of the expenses on a company's income statement.
Each association has a fixed asset that bookkeeping teams take into consideration when concluding the overall worth value of the association annually. An asset may incorporate a vehicle, machine, and equipment that is expected to be owned by an organization for a long time.
The overall value of each asset decreases as time goes by and utilization is done regularly. Thus, it is important for companies to re-evaluate their assets continuously. This is where depreciation comes into play.
As per the Investopedia, “Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy. Depreciation represents how much of an asset's value has been used up. Depreciating assets helps companies earn revenue from an asset while expensing a portion of its cost each year the asset is in use. If not taken into account, it can greatly affect profits.”
Advantages of depreciation tracking via Asset Management Software are given below:
- Precise asset evaluation & account keeping
- Tax benefit
- Well informed financial decision
6. Audit and Physical Verification
Physical verification of assets is done by auditors to check and verify the number of assets that actually exist in an organization. The process involves the verification of each assets' existence, location, and condition.
At the end of the financial year, it is a business requirement to know how many assets they have, where they are located, when were they purchased, currently they are in use or not, etc.
Benefits of audit and physical asset verification are:
- Ensure the existence of all the assets
- Manage internal compliance
- Automated verification of asset tags and serial numbers
- Verification of information like description, location, etc.
Some additional features to look for while looking for asset management software
7. App for every platform
The availability of apps for every platform that is for iOS, Android and Windows devices, makes it easy for offsite and after-hours users to access the asset's information whenever they need it.
8. Cloud-based application
Cloud hosting is an important feature you should look for in asset management software, as it gives you information about your asset anywhere, anytime.
When the software is cloud-based, it gets easy to access the application form any browser around the world with any device mobile, tablet, computer, etc.
Moreover, you can receive the software updates for free along with their access unlike waiting for a new version of software to be released, then purchased and downloaded.
9. Customization Available
Asset management software comes with pre-built features and fields that might not fit with your business workflow. So, if you want to make changes in the data fields, keep in mind that it takes huge time and extra money. Therefore, one must look for the software which is customizable.
10. User Restrictions
User restriction is very important and necessary to carry accurate data information. Access to multiple users would lead to many hands to maintain the data in one file which will arise confusion on the asset and who has updated the information.
The user restricted global asset management software will update the data and generate accurate information and it will be cross-checked by others to allow employees and admins as well.
A good asset management software should be able to communicate with its users. The software should send automated e-mails or in-app notifications for specific events to the designated people.
As it can be very harmful if designated people are notified about matters like past actions, asset use violations, fund limitations, audit checklists and many more.
Asset management software should offer designed reports for assets information like assets by their location, asset by type, etc. It should also allow you to create customized reports without any extra charges or looking for any extra software.
Moreover, the software should also schedule your reports and should set up their receiving.
Choose the software which allows you to restrict the users to access various asset categories or locations. As you won't allow the access of the software to everyone because it is not acceptable to access rights to everyone.
Rather than, restrict user's access as per their permission and they can view and edit, set up data, reports, and modules. Most importantly, it will show all the records such as which update has been done by which user.
Asset management software should be user-friendly. It is always good to have technical support whenever you need assistance. A good support team should always give instant replies to your queries via phone or chat rather than an old and frustrating e-mail method.
Training of the software is necessary. The software vendors should provide you with the proper training about the working of the software. It should be easy and quick. Software training via product guides and on-demand videos can be really very helpful and easy to understand. But, the best way of software training is through live training i.e., via an on-site visit.
Revenue is referred to as sales, the amount that a company earns, and before any expense is taken out from it. The basic importance of revenue is that in its absence, no profit can be earned from a business or it cannot stay for a long time.
Because the revenue is collected to justify the fixed and variable expenses that are paid to run or operate a business. In other words, zero or low revenue not only lead to an unprofitable business but negative financial results too.
Therefore, the increase in revenue is every businesses' demand. All have been discussed above that how can revenue be increased through your business assets by implementing an asset management system.