Businesses, non-profit organizations, and government agencies need a way to accurately keep track of products and equipment in their possession. Otherwise, these items can easily be misplaced, stolen, or damaged without their immediate knowledge, resulting in numerous kinds of financial loss. These entities often find that employing asset or inventory tracking software provides them with up-to-date information on which they can rely. While the terms “assets” and “inventory” are often used interchangeably, they actually aren’t synonymous. Let’s take a closer look at the differences between what asset tracking and inventory tracking actually refer to and how this knowledge can help you run your operations more effectively.
What is Asset Tracking?
First, it’s helpful to define exactly what assets are. Assets, also known as fixed assets or physical assets, are unique items of value. Typically, they are owned by the company and are used to produce the company’s income. They are also used internally and are not considered to be expendable or temporary. Examples of assets might be an organization’s computers, machinery and equipment, furniture, and other kinds of property.
An asset tracking system allows proper personnel (often, a property manager) to establish and monitor these items with a unique asset ID. Within the asset tracking system, you can add extra information to the database including a description of the item, the manufacturer, the model, the serial number, its cost (minus accumulated depreciation), its condition, its location and/or department, and more. When this information is regularly updated and used in conjunction with inventory assessments, your asset tracking system presents an accurate picture of a company’s asset availability and can even prohibit overpayment of taxes or insurance, in some cases.
What is Inventory Tracking?
Again, let’s take the time to define what inventory means. Simply put, inventory refers to items produced by your organization and the materials used to create those items. They are non-unique items of value like stock, supplies, and product parts. For example, raw materials and the final products available for sale would fall under this category. At first, this might seem like it pertains only to manufacturers; however, this designation also applies to “consumables” like pens, paper, notebooks, and other merchandise purchased from other suppliers to conduct your business.
An inventory tracking system is key for maintaining accurate records of stock and supplies, as this can help keep operating costs lower and minimize inventory loss. In fact, the cost of carrying inventory is usually around 27% less in an automated environment that utilizes tracking software. That’s because these items are assigned an SKU (or stock keeping unit) which can be easily printed and scanned for easy tracking. It’s an incredibly easy way for a manager to instantly know what they have in stock and where it is in the warehouse, for instance. Again, inventories are essential for ensuring these systems are truly up-to-date and precise.
Now that you understand the difference between asset tracking systems and inventory tracking systems, you’ll be in a better position to determine which kind of software will fit your needs. For more information on our inventory and asset tracking solutions, please contact us today.