Recovering the highest value of assets not needed by a company is called investment recovery. The idle assets are identified and then re-used or disposed of as surplus - retrieving considerable value in the process. In every organization, assets are always present. Machines or facilities are purchased but through time, they wear and tear to the point that they can no longer be used.
This is where investment recovery comes in. In doing this process, there are important principles to consider. These things are important for companies to know because they can be very useful to the environment in terms of asset disposition.
The first essential thing is the principle of re-using equipment. Idle equipment can be reused internally. Through an effective investment recovery program, surplus equipment can be kept out of the landfill instead of purchasing a new one. Reusing any idle equipment reduces depreciation, insurance costs and capital. Instead of disposing old equipment, a company can recycle it by converting oils and save valuable chemicals; which can generate income and preserve resources. Hazardous waste and disposal costs can be reduced.
The second is reconditioning. One example of this is the reconditioning of toner printing cartridges. They can be refilled and rebuilt and a business could save more money rather than purchasing a new one. In the investment recovery program, pumps, motors and valves can also be saved and put back into service by doing some minor repairs. Reselling is also a good option for a business's excess inventory. This reduces loss and increases the company's income. In some idle assets, lube oils, metals and spent solvents can be reclaimed and this has a good effect on the environment because it reduces waste, improves operating costs and preserves natural resources. In some instances, spare parts and unwanted materials can be sent back to the manufacturer for cash. In order to increase return of capital and lower the tax base, it is better to remove excess assets.
Recovering assets can be very beneficial to the organization. The most important benefit is that an average of 80% of sales produced by investment recovery is counted as profit. Companies have saved a significant amount of $150 million annually because of asset management. Obsolete materials, equipment, machinery, building and land fall in the category of assets. The investment recovery program also plays an important role in boosting the company's morale. Employees and stockholders feel good in working with a company which they know for its resourcefulness rather than wasting on still useful assets. Not only it proves to be beneficial to the environment but also contributes to the betterment to the company in general. The right people involved in the investment recovery program use specialized techniques to recover the highest value of an asset. They salvage the scrap value, reuse it, recycle or return it to the manufacturer.
So it seems that whatever is best for the company, an investment recovery program can prove to be beneficial in terms of financial gains and helping to run an efficient organization.