Asset management describes the process of maintaining, developing, and operating assets in a cost-effective way. Every organisation or company needs to have a good handle on their assets, liquid and fixed. In this blog, we’ll examine the purpose of an asset management plan as well as the implementation of asset management objectives.
What Is An Asset Management Plan?
An asset management plan is a systematic, tactical plan that encompasses an organisation’s infrastructure and assets and brings them into line with an agreed-upon standard of service. These plans are often multidisciplinary in the management over an asset’s life cycle. Good asset management is the backbone of a successful business.
A strategic assessment management plan will typically cover certain areas, including:
- Standard of service
- Current performance
- Planned actions
- Costs and benefits
- Potential future improvements
What is ISO 55001?
The ISO 55001 standard and certification provides organisations with the requirements they need to to establish, implement, maintain and improve their asset management system. Its management standards apply to assets of any type. While not an asset management plan in itself, ISO 55001 delivers a universal standard for organisations to follow.
Creating an Asset Management Plan
The first step in creating an assessment management plan is to take inventory of every asset owned. A clear plan requires documented information or it won’t be effective. When you take inventory, examine the following:
- Value of each specific asset
- Where each asset is located
- When you acquired each asset
- Total number of each asset
- The expected life cycle of each asset
Next, you want to calculate the life cycle of your asset. This includes not only the initial cost but also a long term look including maintenance costs and disposal costs.
Next, you’ll set your levels of service. This means outlining the services that each asset provides. Then you can determine what operations and maintenance are required to keep these assets in good condition.
Finally, you’ll take this information and create a long term financial plan. Effective asset management is built on this foundation.
You can find an asset management template online. There are a ton of free resources that can be used to develop asset management plans.
The Benefits of Asset Management Planning
Improves use. By keeping track of your company’s assets throughout their life cycle, you can improve your entire asset management system by improving your technique of acquiring and maintaining your assets.
Risk management. If you have a good understanding of exactly what your assets are doing at any given point, you’ll be better able to assess risk and be able to mitigate it in an effective way.
Improves compliance. All companies, non-profits, and government agencies must account for the acquisition, use, and disposal of all their assets. With a developed asset management plan, you have a central base of all recorded asset info. This will make life easier at reporting time.
Improves accuracy. Because you have a good handle on your assets, you can be assured that financial statements record them properly.
Cleans up the inventory. Any lost, stolen, or damaged assets will be cleared out of the system and eliminated in the company books.
More than just an asset management plan strategy, your company should cultivate an asset management culture. To learn more about how financial planning can help fast track your business’ success or view an asset management plan sample, get in touch with the team at Best Practice Biz.