The Road to Efficient Fixed Asset Management: Tackling the Actual Value Dilemma
At Tejoury, we conducted market research and found that many companies in the GCC region face a common challenge when it comes to fixed asset management: evaluating the actual value of their assets. This is a critical task as it directly impacts the company’s financial statements, tax calculations, and insurance premiums. However, several challenges make it difficult for companies to determine the actual value of their assets. In this blog, we will explore these challenges and provide solutions to overcome them.
1) Depreciation Calculation: The depreciation of assets is a critical factor in determining their actual value. However, calculating depreciation can be a complex task, especially for companies that have a large number of assets with varying depreciation rates.
2) Market Volatility: The value of assets can fluctuate based on market conditions, making it challenging to determine their actual value accurately. Market volatility can be particularly problematic for businesses that operate in the oil and gas industry, where the value of assets can fluctuate significantly based on oil prices.
3) Maintenance Costs: Maintenance costs can also impact the actual value of assets, as poorly maintained assets can have a lower value than well-maintained assets. However, calculating maintenance costs can be difficult, as they can vary based on the age and condition of the asset.
Solutions to Overcome the Challenges
- Automated Asset Management Software: One of the best solutions to overcome the challenges associated with evaluating assets’ actual value is to use automated asset management software. These software solutions can help companies track their assets and calculate their actual value accurately. Additionally, they can automate the depreciation calculation process and provide real-time updates on maintenance costs, making it easier for businesses to make informed decisions.
- Expert Evaluation: Another solution is to hire expert evaluators to determine the actual value of assets. These evaluators can use their experience and expertise to evaluate the assets accurately and provide a comprehensive report on their actual value. Additionally, expert evaluators can take market conditions and maintenance costs into account when evaluating assets, ensuring that the actual value is accurate.
- Regular Asset Inspections: Regular inspections of assets can also help companies determine their actual value. By inspecting assets regularly, businesses can identify any maintenance issues and address them before they impact the asset’s value. Additionally, regular inspections can help companies track their assets and ensure that they are being used efficiently, further enhancing their value.
Here at Tejoury, we understand the challenges that companies face when it comes to fixed asset management in the GCC region. With over 16 years of experience as a local Saudi company, we have been helping organizations achieve their goals, including the Saudi Vision 2030. Our friendly and experienced staff is happy to conduct a free-of-charge gap analysis and provide professional services to help companies overcome the challenges associated with evaluating assets’ actual value. Contact us today to learn more about how we can help optimize your asset management strategies and achieve your business objectives.