Thinking about assets might take your brain immediately to your bank account. However, asset tracking is the practice of understanding all of the physical assets that you have in your possession and tracking them. When you’re starting a business, asset tracking for your physical assets is absolutely necessary so you know what you have and how to manage them.

Asset tracking occurs when a company tracks its physical assets. In order to do this, you have to equip your assets with a GPS tracking system, a barcode scanner or a radiofrequency identification (RFID). Your physical assets can be things like generators, vehicles, computers or other technological equipment. Assets provide a value to your business and are important for business functioning. Tangible assets are these physical items, while intangible assets are things like contracts, software you own and patents.

Assets are not the same as inventory, if you’re working in a business that regularly stocks inventory. The assets are what you use to stock and keep track of the inventory.