In an information-based economy, the decision to make a technology investment purchase can be complex and dictated by price. Financially, a firm would likely label the purchase as a business expense, as denoted on the income statement, rather than as an asset on the balance sheet.
Expenses are shown on the income statement for management to review the “bottom line” of the company. The business expenses are subtracted from incoming revenues to show how much the organization earned (or lost) over the period. However, lasting benefits (such as future cost reductions) of a new technology is typically not taken into account when processing the original expense.
While the upfront costs may be accounted for, one must examine the intangible, future benefits of the technology. Utilizing fleet management solutions provides numerous paybacks to an organization. Acting as an intangible asset – one that adds value and economic benefit over time, the fleet management technology has a direct impact on the bottom line of a business.
Cost savings can be extracted from multiple areas. At Geotab, the savings have been identified as coming from 4 core pillars:
Telematics provide vast savings in many areas of the company making it more than a little black box. To view the Investopedia definition of what an intangible asset is, visit: http://www.investopedia.com/terms/i/intangibleasset.asp#axzz2LelcGasL
To speak with an experienced Geotab Account Manager, visit:http://www.geotab.com/contact.aspx
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