The Importance of Fixed Asset Tagging

Fixed asset tagging drives effective asset management. It’s the first step in tracking, monitoring, and managing the fixed asset lifecycle.

By implementing a structured fixed asset tagging system, organizations can ensure accountability, improve maintenance scheduling, and optimize resource utilization.

In this article, we’ll detail the methods leading organizations use to tag assets, why the concept is critical, and how it contributes to asset management success. 

What are fixed assets?

Fixed assets are long-term physical items. In business operations, they’re property, machinery, vehicles, and technology. Unlike current assets, which are short-term resources, fixed assets provide value over an extended period. Effective fixed asset management helps maintain operational efficiency and financial stability.

Examples of fixed assets

Before diving too deep into fixed asset tagging, it’s important to what fixed assets are. Fixed assets are categorized based on their function and use across different industries. Below is a breakdown:

Before diving too deep into fixed asset concepts, it’s important to demonstrate what they are. Fixed assets can be categorized into various types based on their function and use across different industries. Below is a breakdown:

Category	Examples	Industries	Purpose
Land and buildings	Office spaces, warehouses	Private sector, education, healthcare, municipalities	Operations, storing goods, generating revenue
Machinery and equipment	Manufacturing tools, HVAC systems, water heaters, pumps	Industrial, education, healthcare	Production, facility maintenance
Vehicles	Delivery trucks, buses	Private logistics, public transport	Transportation, service delivery
Technology	Computers, servers	Education, IT, private businesses	Operations, data management

What is fixed asset tagging?

Fixed asset tagging refers to the process of assigning unique identifiers to equipment and other assets. These include RFID tags, barcodes, and QR codes. Tagging an asset allows organizations to track them and manage their lifecycles more efficiently. 

How fixed asset tagging supports tracking

Asset tagging is the first step in asset tracking, helping organizations monitor location, condition, and usage. Effective tracking ensures organizations maximize their asset investments and optimize financial planning.

Organizations that have implemented a rigorous tracking system create effective asset management strategies. Understanding how your assets are performing is crucial to making decisions that boost efficiency and cut costs. Tracking breakdowns, downtime, and the maintenance needed to repair each asset in downtime tracking software or a CMMS will help you build a time-based preventive maintenance schedule that enhances and lengthens the life of your assets.

The more you know about what makes your assets break down or wear out, the better you’ll be able to intervene and protect your assets with preventive maintenance. Tracking also creates additional transparency that aids in critical financial processes like depreciating assets. 

Fixed asset depreciation

Depreciation is essential for financial reporting and tax calculations. Asset tagging enables accurate tracking of depreciation by linking assets to a database that logs acquisition cost, usage, and maintenance history.

The right asset tagging method

There are several different dependable methods for tagging assets. It’s important to know the basics about each to decide what fits best for your operation. Here is a little about the most common modern tagging methods:

Barcodes

A cost-effective and widely used method for inventory and asset management. Barcodes are simple to implement, requiring only a label printer and a barcode scanner or a mobile device with scanning capabilities. They are ideal for organizations with a large number of assets that require periodic tracking, such as office equipment, tools, or IT hardware. However, barcodes require a direct line of sight for scanning, which can slow down processes in high-volume environments.

RFID (Radio Frequency Identification) 

A more advanced tracking method that enables automated asset identification without the need for direct line-of-sight scanning. RFID tags contain microchips that store asset data.

This makes RFID a fit for high-speed inventory management in warehouses, manufacturing plants, and healthcare facilities. Active RFID tags, which have a power source, can even transmit data in real time. They make them ideal for tracking high-value mobile assets like medical equipment or fleet vehicles.

QR codes 

These two-dimensional barcodes store more data than traditional barcodes. Additionally, employees can scan them using smartphones or tablets, eliminating the need for specialized scanners. 

QR codes are particularly useful for assets that require more detailed information, such as maintenance history, operating instructions, or warranty details. Facility managers and field service teams often use QR codes to quickly access asset details by scanning the code with a mobile app, improving efficiency and record-keeping.

Choosing the right method

The first step in deciding which method supports your organization is to consider the asset type. RFID is ideal for high-value assets, while barcodes work well for lower-value equipment and spare parts inventory. 

It’s also important to factor in location. Assets in extreme conditions may need durable RFID tags, which employees can apply to areas that are safer from conditions. Finally, you should align the tracking method with organizational needs. Select a system that works well with your existing asset management software.

Steps in the asset tagging process

Much like any strategic initiaitive, asset tagging has a distinct process. For best practices consider following this template:

1. Plan and assess: Identify and categorize all fixed assets based on value and importance
2. Select the right tag: Choose a tagging method based on durability, cost, and application
3. Label assets: Apply tags in accessible locations for easy scanning
4. Software integration: Connect asset tags to management software for automated tracking and reporting
5. Tag and verify: Assign tags to all assets and verify data accuracy in the system
6. Maintain and audit: Regularly update asset records and conduct physical checks to ensure data integrity

Benefits of asset tagging

There are numerous benefits of asset tagging that extend beyond just following best management practices. Having a comprehensive tagging system allows organizations to improve resource allocation by improving transparency. This added layer of visibility often reduces unnecessary purchases. Along with better resource allocation, asset tagging improves audit accuracy by allowing third parties or internal audiorts to easily access histories and conditions. 

Additionally, asset tagging directly contributes to cost reduction by streamlining asset management practices. This allows organizations to maxmize uptime and reduce emergency maintenance costs. Asset tagging also creates the foundation for asset lifecycle extension processes. 

The role of asset tagging in asset management

Fixed asset tags simplify tracking by linking assets to unique identifiers. This system provides visibility into asset status, location, and maintenance history.

Asset tagging helps

• Inventory control: Maintains a real-time record of asset locations and quantities
• Asset maintenance: Facilitates scheduling and tracking of repairs to extend asset life.
• Audits: Streamlines financial and compliance audits with accurate, accessible data.
• Depreciation tracking: Ensures precise financial reporting and tax compliance.

Fixed asset management software for tagging improvements

Fixed asset tagging is an essential process for tracking and managing long-term assets effectively. By implementing best practices and integrating asset tagging with management software, organizations can enhance operational efficiency, improve financial planning, and extend asset useful life. Investing in a structured asset tagging system ensures long-term benefits in asset tracking, maintenance, and overall resource optimization.

To get the most out of your asset tagging system and subsequent management processes, it’s best to integrate the latest industry technology into your operations.

Fixed asset management software increases an organization’s visibility and automates critical processes. Leading software offers a robust solution by automating data entry, asset tracking, developing an asset management strategy, and simplifying reporting.

Frequently asked questions?

What types of assets should be tagged?

Common assets that benefit from a custom asset tag include:

• IT equipment (computers, servers, printers)
• Office furniture
• Machinery and tools
• Vehicles and fleet assets
• Medical and lab equipment
• Construction equipment
• Manufacturing and warehouse assets

What information should be included on an asset tag?

• A fixed asset tag typically includes:
• A unique asset ID or serial number
• A barcode or QR code for scanning
• Asset description (optional)
• Company name or logo (for branding/security)
• Location or department (if applicable)

Can asset tags be customized?

Yes, an asset tag can be customized with company logos, colors, additional information, or different materials (e.g., metal tags for durability in harsh environments).

How often should asset tags be updated or replaced?

Employees should replace asset tags when they are unreadable or damaged. Some organizations conduct periodic asset audits to check tag conditions and update records as needed.

What software can I use to track tagged assets?

Asset management software (such as CMMS or EAM systems) can integrate with barcode or RFID scanners to automate asset tracking, maintenance, and reporting.