Fixed assets such as real estate, infrastructure, and equipment are fundamental for manufacturing facilities but do not serve as short-term sources of revenue. These assets depreciate over time to account for their diminishing value on financial statements. Having actionable insights on fixed assets is crucial for manufacturers to effectively oversee and utilize these resources, as well as to make well-informed choices regarding maintenance, upgrades, or replacements. By examining and interpreting data related to fixed assets, organizations can enhance asset proficiency, cut down on expenses, and boost overall operational effectiveness.

What KPIs Does Fixed Assets have?

Fixed assets must have key performance indicators in place to provide analytics for managers and users to monitor important metrics such as asset cost by class, net book value by class, acquisition by class, accumulated depreciation by class, year-to-date depreciation by class, and retirements by class. These KPIs allow for better tracking and analysis of fixed assets, helping to make informed decisions and ensure that assets are being managed effectively.

Cost of Assets by Classification

The asset cost breakdown categorizes all assets into different groups and subgroups to analyze the organization's expenditure patterns or write-offs. It provides the current and past year costs for fixed asset classes such as land, buildings, plant equipment, and office equipment, along with specific subcategories like laptops and PCs. This facilitates the tracking of asset investments and the depreciation of general ledger accounts.

Net Book Value Classified by Class

The assets' net book value is categorized by class for the current and previous year, enabling users to analyze trends in asset values over time. Net book value represents the remaining value of assets after depreciation. This data offers a comprehensive view of the financial status of assets in each class, simplifying the process of monitoring changes in value.

Procurement by Category

The category-based procurement report displays the purchase of new assets categorized by year. This offers a comprehensive look at the allocation of resources to each asset class over time, ensuring alignment with the company's strategic goals. It enables users to monitor spending on various asset categories and make well-informed decisions regarding future investments.

Depreciation by Asset Class

Accumulated depreciation by asset class helps track depreciation trends and ensures accurate asset valuation on a company's balance sheet. Monitoring depreciation prevents overstatement of asset value and inflation of the company's worth. Rapid depreciation may lead to undervaluation or issues with tax authorities.

YTD Depreciation by Class

The YTD depreciation by class provides the depreciation amount for each asset class for the current and previous year, allowing users to track trends in accumulated depreciation. This information can be used to forecast how depreciation will impact the balance sheet and income statement.

Retirements by Class

Retiring assets is essential for managing resources, as assets have a limited useful life. Assets may be retired before full depreciation, e.g. when a new machine replaces an old one. In this case, remaining value of old machine is written off. If an asset is fully depreciated, getting a new machine does not affect it. A company isn't required to retire fully depreciated asset and can keep using it without depreciation or showing on balance sheet.

Why Is Fixed Assets Dashboard Important?

The value of a company's balance sheet is heavily influenced by its fixed assets, such as plants and equipment. This is especially evident in manufacturing, where constant investments are required for machinery maintenance and upgrades. The rising emphasis on automation in manufacturing plants further amplifies the expenses linked to maintaining fixed assets.

Proper monitoring of fixed asset value and depreciation is essential for accurate financial reporting and profitability. Effective management of fixed assets is crucial in selecting the most appropriate depreciation method to align the asset's lifespan with its financial impact. With a variety of depreciation methods to choose from, it is important to have a thorough understanding of an asset's condition to make informed decisions. This ensures the accurate representation of assets and expenses, leading to a balanced balance sheet and income statement.

How Does Nirmalya Suite Help Fixed Assets Lifecycle?

Nirmalya Suite is a comprehensive cloud-based platform that helps organizations streamline their business processes and unify their workforce, technology, and operations. It offers supply chain planning, advanced scheduling, and cohesive business processes to empower companies in gaining a competitive edge and ensuring sustained success. The suite covers core operations like human resources, CRM, sales, service, manufacturing, inventory, asset management, purchasing, and financials, along with insights, reporting, and analytics. It provides real-time data for capacity planning, making it faster and more accurate, and includes industry best-practices, compliance, extensibility, and AI capabilities to help manufacturers quickly go live, reap benefits, and maintain efficiency and agility.

Nirmalya Suite’s fixed asset dashboard offers a breakdown of asset costs by classification, allowing for analysis of expenditure patterns and write-offs. It categorizes assets into groups and subgroups such as land, buildings, plant equipment, and office equipment, including specific subcategories like laptops and PCs. The dashboard provides current and past year costs for these fixed asset classes, facilitating tracking of asset investments and depreciation of general ledger accounts.

Nirmalya Suite fixed asset dashboard breaks down the net book value of assets by class for the current and previous year. This enables users to track asset value trends effortlessly over time. The net book value, representing the value of assets after depreciation, provides a clear financial status of assets within each class. This simplifies asset value monitoring and aids users in making informed asset-related decisions.

Nirmalya Suite’s fixed asset dashboard provides a procurement report categorized by year, allowing users to track the acquisition of new assets. This report enables users to analyze the allocation of resources across different asset classes over time, ensuring that they are aligned with strategic objectives.

Nirmalya Suite’s fixed asset dashboard offers a valuable tool for tracking depreciation by asset class. By monitoring accumulated depreciation by asset class, companies can ensure accurate asset valuation on their balance sheets and prevent overstatement of asset value. This helps to avoid any issues with tax authorities and ensures that the company's worth is not inflated. Rapid depreciation may result in undervaluation, making it crucial to keep a close eye on depreciation trends.

Nirmalya Suite’s fixed asset dashboard offers YTD depreciation by class feature, displaying the depreciation amount for each asset class in the current and previous year. This tool enables users to effectively monitor trends in accumulated depreciation and make informed forecasts regarding the impact of depreciation on the balance sheet and income statement.

Nirmalya Suite's fixed asset dashboard offers a useful tool for efficiently managing asset retirements based on their class. Retiring assets is crucial due to their limited useful life and the potential need for replacement before full depreciation. This feature enables companies to effectively oversee their resources and make well-informed decisions regarding the timing of asset retirements.

Contact us today to learn how Nirmalya Suite can help you monitor fixed asset value and depreciation to accurately record assets and expenses, and effective fixed asset management leads to increased profitability.