Asset Management Made
Easy
If you're a small business owner, you probably know
by now how important it is to efficiently manage your
assets. This fact is most evident at tax time each
year. Whether you're talking about cash or other physical
assets, managing them doesn't have to be difficult.
The first rule to follow is to have good bookkeeping
and accounting practices in place. In the long run
doing this will save you both time and money. No matter
how insignificant the amounts may seem, be sure to
account for every penny that comes in and goes out.
Even a few cents here and there can end up adding
up to hundreds of dollars. Following of a good accounting
practice and asset management is extremely important,
especially when you are required to submit tax to
the government. There are numerous cases where small
issues that appear insignificant come under the eye
of scrutiny and can haunt you for years with the IRS
on your back.
Good record keeping will also benefit you any time
you need to apply for a loan or grant. You will have
to know each of your assets and provide documentation
and accurate records. Besides securing the loan, these
practices will also identify you as a responsible
member of the business community. As for physical
assets some small businesses may not realize just
how many assets they actually have. Anything that
holds some sort of monetary value, or can be sold,
is considered an asset. For example, you probably
know that any computer equipment is an asset. However,
many people overlook the chair they're sitting in,
and desk their computer is on, as an asset as well.
You should be looking around to see how many more
assets you have than you had originally thought. The
concept of depreciation is important to understand
when managing physical assets. For example a brand
new car worth $18,000, depreciates in value as soon
as it is driven off the lot. What we pay for a brand
new item is certainly not the price we can expect
to sell it five years later. For a car, factors such
as mileage, wear and tear, and any accidents also
play a role in the depreciation. While this rule of
depreciation applies to all physical assets, property
is an exception which may in fact appreciate in a
few areas. Office equipment and most other equipment
purchased for a small business does follow the deprecation
rule and must be taken into account when you are recording
your assets. You may be feeling confused and overwhelmed
at this point, but asset management can be fairly
easy, given the proper tools. Now that we're in the
computer age, there are a number of software programs
to help with asset management and bookkeeping. Most
of the software is easy to use and is well documented.
You should be able to tailor it specifically to your
business. If you'd rather outsource these functions,
think about talking to a chartered accountant. The
main point to remember that asset management in small
businesses is just as important as it is in large
ones. Be sure to take this into consideration and
document everything. You may end up paying a high
price if you don't.
John Hivern is the owner and operator of FTP
Assets, the web's premier resource for information
about Asset Management & Protection. For more articles
on Asset Management & Protection visit: http://www.ftpasset.com/articles
