Why fixed asset management is important to hotels?
Fixed asset management often plays an important role in daily operations that makes or breaks businesses in the hospitality industry. This is especially so in hotels because of its capital intensive nature. One early stumbling block that comes back to haunt the business is most hotel’s inability to start managing their fixed assets on a clean slate. During a hotel’s opening, the owner often hands over the assets to the manager in a rush. This lack of accountability is not uncommon and many hotels do not have a complete list of fixed assets.
When that happens, maintaining an accurate inventory list becomes a challenge. Additions, disposals and any movement of assets in between room turnovers have become increasingly harder to track as time passes. Without accurate record keeping, asset losses cannot be tracked easily and accountability becomes a problem.
What are the common challenges faced when managing fixed assets?
Hotels are large, complex organisations that make accurate and reliable fixed asset management difficult and tedious because of a large number of reasons.
Strain on existing resources
In some hotels, there is no dedicated staff/coordinator in charge of fixed assets that can assign and ensure the various departments in the hotel are responsible for the fixed assets in their care. When the need for fixed asset counts arises, operational resources are often deployed. This additional strain on staff and resources prevents the business from serving guests well with speed and care needed to remain competitive in the tight market. It also limits their ability to fend off industry disruptors like Airbnb and adapt to new market conditions.
Outdated processes and solutions
Hotel owners and management may also not be very familiar with modern technology and solutions in the market that can help accelerate and simplify fixed asset counts. Technology like barcoding and RFID may only be partially implemented or are slow to be rolled out to all fixed assets, limiting a hotel’s ability to leverage technology for accurate fixed asset management.
Very often, outdated processes and technology are responsible for slow, painful and inaccurate fixed asset counts. In worse cases, there are no proper procedures and work flow for tagging and movement of fixed assets (i.e. in, transfer, out, disposal) as well as no regular physical count that often leads to discrepancies.
Mismatch of information – log record versus fixed asset module
Another common issue faced when managing fixed assets is the mismatch of asset information (e.g. description/category/location/cost allocation) between the Log Record that is kept by the operation team and what is recorded in the Fixed Asset Module of the Finance/Accounting ERP system. Major reconciliation is required to rectify this mismatch of information and often stretch resources to the limit.
How outsourcing fixed asset management can help hotels?
An experienced outsourcing partner can introduce technology and modern tools that streamline and automate processes. Their experience helping other hotels also gives them the edge when it comes to recommending efficient fixed asset management methodology that is tailored to individual hotels.
Outsourcing alleviates hotels’ resource constraints and gives them the extra muscle needed to complete fixed asset management projects without having to siphon resources from existing operational teams. This ensures that daily operations are not disrupted and that productivity is not diminished.
Access to expertise
Outsourcing partners can provide the right mix of resources and expertise that hotels do not have access to. With access to trained advisors (both IT and Finance), hotel owners can have peace of mind knowing the implementation of fixed asset count will be completed within the timeframe given. Experienced outsourcing partners can also act as consultants, sharing insights and industry benchmarks that will allow hotels to operate and compete more effectively.
Uninterrupted business operations
Vendors can also perform recurring services on continual basis that gives hotels the flexibility to grow or shrink resources at their disposal to ensure their fixed assets are accurately tracked at all times. For example, annual fixed asset counts can be conducted to aid in fixed asset reconciliation to ensure asset losses are detected and replacements are ordered in advance.
The advantages that outsourcing fixed asset management can give hotels are very real. They help hotel owners improve turnaround time for fixed asset reconciliation, prevent shrinkage, and ultimately focus on running their business.
WE SPECIALISE IN SERVING REAL ESTATE & CONSTRUCTION BUSINESSES
Each industry is unique and the hallmark of a great business partner is the ability to understand and identify the needs and goals of each business in its own context. Our vertical industry units are designed to help companies grow through tailored services with insightful, practical and effective advice.