How Asset Management Saves Money Via Capital Asset Depreciation?

Capital Asset Depreciation

Fixed asset management is one of the most beneficial activities for the business. You may ask, how? If asset management is done in the right way then you will notice great savings in your expenses. Especially growing companies, when the business is growing, they struggle in keeping track of capital asset deprecation.

Not just that, if they don't track assets as a result, they end up paying an expensive premium. This is where asset management comes into play it can save you a lot of money and handle capital asset depreciation efficiently.

What Is Asset Management?

Organizations are equipped with equipment, machines, and inventories. The processes of managing these assets and activities are done such as managing, tracking, and monitoring to keep assets in top condition is known as asset management.

Asset management empowers organizations in effectively managing asset life. That results in increasing asset life, optimizing asset performance. It also lets you know when it needs to be disposed of all of these activities are done with asset management.

Also Read: Everything You Need to Know About Asset Depreciation

What Are the Pros of Asset Management?

The pros of Asset Management are as follow:

Pros of Asset Management against Capital Depreciation

1. Maximum Return on Investment

When an organization purchases a new asset, which is too expensive then obviously you need to maintain it properly. If these equipment or machines are being used carelessly then it can lead to breakdown occurrence.

We all are aware of how costly these types of emergency maintenance are! However, this software avoids sudden breakdown because maintenance is provided on time and if there are problems found by the maintenance, they inform the organization.

2. Inventory Tracking

Inventory is equally important for an organization. They are consumables that are used in business operations. With inventory tracking software, you can identify how much stock is left in the stockroom, and when it needs to be replenished.

If you try to keep track of it manually you will not be able to balance because there are so many factors but with automated inventory tracking, you will know the exact numbers in real-time.

This software also provides the facility of alert and notification. It means whenever the inventory level goes below a defined level then it alerts the responsible person.

3. Find & Remove Ghost Assets

Ghost assets are either stolen or missing and not available for utilization. However, they are written in the account books & most importantly you are paying taxes for these assets.

Asset management software identifies those ghost assets and you can easily remove them from your account books. As a result, you will see reduced tax bills.

4. Cloud Computing

One of the biggest advantages of asset management is cloud computing. With Asset management cloud computing you are not bounded to your office seat. The cloud computing feature comes handy when your technicians are working on a work order!

It allows them to update right away, it means they don't have to wait to go back to their work station to update the status of the work order. Managers can also set work order priority on the go plus they can also see how much work is done and how much left!

According to the Statista,

“In 2018, the public cloud computing market is projected to be worth around 141 billion U.S. dollars. The market has seen massive growth over the past decade, skyrocketing from a value of less than six billion dollars a decade ago.”

Cloud Computing Market Stats
Also Read: What Are the Benefits of Tracking Depreciation with Asset Tracking Software?

Why Depreciation Is Important for an Organization in Terms of Saving Money?

Organizations can take benefit from depreciation. However, they can also eat you inside out if the account book is not taken care of precisely.

Getting the correct worth value for assets is important because they help in calculating the overall worth value of a company. Companies buy an asset as per their employee or other requirements.

However, the value of assets decreases over time, and as per the tax rules and regulation, you can use this decreased value for tax relaxation. In simple terms, an organization can save money with capital depreciation management.

According to the PRN News Wire,  “Thirty percent (30%) of small businesses believe they overpay their taxes and could claim more deductions and credits.”

Capital depreciation calculation is one of the most hectic works one small error and every effort done so far is useless. Therefore, accurate capital asset depreciation calculation is a challenge!

If assets are lost and nowhere to be found then they need to be removed from account records because of this activity your organization will end up paying for those assets which are not available and not utilized. Furthermore, the government may think that you are overestimating the asset value and they can also penalize your organization for this fault.

Asset Management Overcomes All These Challenges

Asset management makes all these tasks a cakewalk! When asset tracking management software is implemented in the organization then asset loss chances are minimized as team members will know exactly where is the asset located in real-time? Moreover, asset theft and misplacement are greatly decreased.

Even if an asset is lost or no longer exists in an organization then this software ensures that these assets are removed from the accounts so that correct capital depreciation is done. Effective asset management assists in crucial decision making as it provides detailed reports that help in setting future goals and growing business.

Moreover, asset management software provides you with the facility of capital asset depreciation calculation. In this software, the straight-line method and the double-declining balance method are given for your convenience.

Asset auditing is one of the major issues for organizations because it can be long and exhausting work but with this software assistance, it becomes a simple job. As this software provides precise asset location and also play a key role in physical verification of asset.


Depreciation management can be done easily with asset management software. It can save a lot of money and other expenses as well for an organization.

Asset management software comes with a real-time update feature as a result it eliminates the possibility of data duplicity. You can add images and description in asset management software for your convenience this feature comes handy when maintenance & work order management is done.

Once you start using this application, we assure you that you will not regret on the contrary it will give you the peace of mind that you never had experienced before!

Also Read: What Are the Purchase Order Process and Procedure in Companies?

Frequently Asked Questions (FAQs)

1. What are the advantages of using cloud computing technology?

The advantages of using cloud computing technology:
1. Remote access to all files or anything that too 24 hours and seven days a week.
2. It is less expensive; it saves expenses of hardware purchase and maintenance costs as well. All you need is a subscription plan and you are ready to go!
3. You don't have to worry about security or software updates as this is the responsibility of the cloud computing service provider team.

2. Why Capital asset depreciation is so important?

Capital asset depreciation can play a crucial role in tax saving. However, you must keep all records & invoices to avail depreciation benefit.

3. Which industry uses asset management most?

Asset management is used in almost all industries. It is used in those organizations which are equipped with a lot of assets. Some major industries can be the IT Industry, Hospitality, Healthcare, AV Industry, Manufacturing Industry.

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