Knowing the Difference Between Assets & Inventory
Asset tracking and inventory tracking, to many people, mean the same thing. This, however, is not the case. As with most things in business, having a thorough understanding of each of the aspects of tracking systems is very important for a number of reasons. Educating business owners allows them to fully understand the importance of each individual item in their company. How, then, do you make the differentiation between asset and inventory?
An asset is an item of value within the company which is used for business purposes. This can be anything from the property used to house the business to the machinery used to create the products sold. Asset tracking is knowing which items the business uses, where they are located, and who has them. This tracking system allows the business to see, on paper, what is needed in order for the business to continue operating, see which items are being lent out, monitor depreciation of fixed assets, view maintenance costs, and see timelines on warranty contracts. Though inventory, for reporting purposes, can be tracked as an asset, not all assets are inventory.
Inventory are the goods or services which the business provides to consumers. Inventory tracking entails managing the products which are sold, distributed, or consumed. This is done by keeping track of the receipt, storage, shipping, and sale of products, monitoring the inventory turns, age, and reorder levels. Knowing the individual cost of each inventory item allows a business to create an accurate pricing margin which will allow for profit. Without tracking this information, you may very well lose money in sales.
What is the best way to track your assets or inventory? There are a number of software systems on the market, such as assetGEEK, which allow you to see and track both assets and inventory, easily add or remove items as the inventory shifts, and run reports to see how profitable your company is. All of this, however, is only possible through a thorough and accurate tracking device.