The Many Faces of Asset Loss

Companies that sell goods of any kind must deal with the prospect of lost assets. Unfortunately, there are many ways an organization can fall victim to this kind of financial misfortune, including outright theft, spoilage, damage, misplacement, and goods becoming outdated.

In the clothing industry, for instance, inventory that sits on shelves too long can end up being virtually worthless when styles and consumer preferences change. Here are more details about the various ways merchants lose out to the financial bugaboo of asset loss.

Theft

Theft of assets can happen in two different ways. The most obvious and common method is simple stealing by employees, shoppers, shippers or anyone else. In cross-country transport, for example, shipments often arrive with less cargo than is listed on the bill of lading. Likewise, once goods arrive in retail stores, they can be lost to direct theft by workers or shoppers. Accountants use a special term, shrinkage, to classify this kind of loss, and it is significant in certain retail sectors, like electronics, high-end apparel, and jewelry.

Spoilage Due to Improper Fleet Management

The real key to cost-effective control, comprehensive monitoring, and regulatory compliance for refrigerated assets is a reefer monitoring solution for transporters of all sizes and in any industry. For example, owners collect vital data through cold chain monitoring, a process that lets them see real-time temperatures of goods at any point in the transportation cycle. It’s a fact of the food and beverage business that precise temperatures must be maintained throughout shipment, regardless of outdoor weather conditions, the length of the trip, or the size of the shipment. When temperatures fall out of the safe zone, the result can be huge financial losses and unhappy customers.

Damage

Accidents happen, and for business owners, they can be quite costly. One of the obvious, but not the most common, reasons for asset loss include accidents that result in breakage. This kind of damage can occur in the inventory phase when containers are mishandled or stored improperly, when cargo trucks or rail cars are in accidents, or when retail merchants drop one or more boxes of goods.

Becoming Outdated

In the apparel, jewelry, and automotive sectors, style means a lot to buyers. Clothing that doesn’t sell quickly enough often ends up on discount tables. The same goes for trendy, high-end jewelry items. This phenomenon is the reason you can often buy a two-year-old car for half its original price, even if it has no miles on the odometer. The fact of consumer sentiment plays a role in asset loss.

The cold, hard reality is that when buyers no longer favor an item, for whatever reason, the seller suffers a loss and often tries to unload the merchandise at a significant discount to avoid a total loss. Since social media has changed how and what we eat you should be aware of current trends and appropriate your purchasing accordingly.

Misplacement

For very large corporations, improper inventory control often results in the misplacement of large numbers of products. Without precise tracking programs in place, pallets of goods go missing, are stored in the wrong warehouse, get tagged incorrectly, and are sometimes never found. Theft, damage, and spoilage are not the only reasons companies lose things. It’s often human error that leads to missing assets.