EAM: Controlling Costs for Financial Success
Why is it that we run business so differently than we would our own household? Consider this example and you will see what I mean. Almost 90% of people have a relatively fixed income. This means that they cannot just hope that they will bring in more money to offset their costs. So, what do you do? You add structure to your life, look after your belongings and watch costs.
- Groceries- you set limits to what you spend and you monitor your consumption.
- Car- You get oil changes, keep it clean and drive predictably.
- Vacations- you plan ahead, set a budget and save towards the trip
Bottom line is that we know that if we forecast our costs and take care of our possessions we can predictably tell if we will be living within our means. This lesson applies to business as well.
Companies have the goal of generating revenue that offsets costs, while producing a profit. As a business grows, cost is also projected to grow. With that simple sentiment, it is natural for companies to be focused first on strategies to increase revenue to balance out costs. Therefore, sales is always the first department to receive greater investment.
However, increasing revenue is only half the battle. Getting a grip on operations, assets and maintenance are vital since they are usually the biggest costs in your business. The greater grasp you have around controlling and forecasting these costs, the greater chance you have for financial success. Good businesses do not just lean on sales, they understand the importance of managing their business to take the most advantage of sales.
Having an asset management system in place, like FieldFX’s FX EAM module, empowers companies with the data to control and forecast operational costs. Asset management software takes your company from reactive to strategic while boosting efficiency. Instead of fluctuating costs, you have predictable costs. Instead of unpredictable schedules, you can optimize your time. Most of all, you can provide valuable reporting to your stakeholders. With asset management software, you are given the tools to help your business be more profitable.
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