Asset recovery is an important strategy that companies employ to remain financially healthy. There are many things that a company do run its operations smoothly. From recruiting the right person, maintaining networks to providing support to customers. Asset recovery is one such strategy.
When is The Process of Asset Recovery Required?
A company has to buy many resources to run a successful business. These resources can be anything, laptops, fax machines, vehicles, fans, lights pens, tables, chairs etc. All these things, however, have an end of life. After a certain period of time, these things become too unfit to use. However as these things lie idle in the company, so is the money that were invested to buy these items. This is where asset recovery helps. Again, after a certain assignment is completed, the machines that were used to complete the assignments remain idle. Here too asset recovery can help.
So in simple terms, asset recovery is the process of selling or reusing the unused items in order to squeeze more value out of them.
There are three aspects of asset recovery-
- Identification – Identifying which assets can be reused or sold is an important part of asset recovery. As the unused items remain idle, the money with which they were bought does not get freed. Asset recovery identifies these items that are a burden to the finances of the company. Asset recovery also examines the legal angle. Whether an asset legally belongs to the company is examined.
- Reuse- The optimal way that the unused resources can bring value to the company is by putting them to use again in other departments of the same company. For example, when an old computer loses its processing power in a software company, instead of throwing away the computer or selling it away, it can be used in the company’s finance department where extreme processing power is not needed.
- Divestment- Selling off unused or surplus assets is another aspect of asset recovery. This part of asset recovery carries both negative and positive connotations. Suppose a company was tasked to handle phone calls of customers of another company for a fixed period of time. For this the first company bought 200 telephones and computers. After the task is completed the 200 telephones and computers lie unused and as a result the money with which these items were brought is locked. The task of asset recovery involves selling away these items to free up a significant portion of the invested amount.
Then again, when a company suffers a failure asset recovery can come to help. With the help of asset recovery services the failing company can repay its creditors.
Asset recovery – the multifaceted process of recovering investment is thus an important part of company strategy today. Sometimes, asset recovery can turn a company away from collapse.