Managing Your Assets
By: John Hivern
Assets constitute of two major components - cash and physical assets. While asset management is a fairly easy task, most of us - especially those who own small businesses - do not pay much heed to this essential task. The necessity of good practice dawns on us only when the tax season is round the corner.
The main thing you need to remember when dealing with your cash accounts and assets is that good book keeping and accounting practices will save you time and money in the long run. You need to keep exact track of income and spending, no matter how small or insignificant the dollar value may be. A few cents here and there can add up to hundreds of dollars in no time.
Asset management and proper accounting practices are especially important when it comes to paying taxes to the government. Something may seem minor to you, but you don't want to learn the hard way, as even a tiny indiscretion may turn up in an audit. This can happen to you years later than the actual event.
Exact and detailed accounting books will also help you should you need to apply for a loan or a small business grant. They will need to know all of your assets and if you have all the proper documentation, and books with accurate records, you will be able to easily prove you are a reliable 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.
Managing and properly reporting your physical assets needs to take several things into account. One of these is depreciation. When we talk about cars, the concept of depreciation becomes very clear. When you buy a car brand new at $15,000 you can't expect to sell it five years later for the exact same price. As soon as car is driven off the lot it deprecates in value. Mileage, wear and tear, and any accidents also play a role in the depreciation of the car. The same goes for almost anything else you may be considering an asset. Property is an exception to this rule and in many areas goes up in value.
Therefore, small businesses need to cater to depreciation in value of the office equipment and most other equipment that has been purchased when undertaking asset valuation and management. While this process sounds overwhelming, it actually is fairly easy when assisted with the required tools and guides.
The mature business market offers numerous software programs that can assist you with your asset management and book keeping. While most of these are heavily documented and are very user friendly, some assistance from a software expert can get you customized solutions too. However, when choosing to seek external assistance for your asset management and accounting, then the right choice would be a qualified CPA.
The bottom line is that for small businesses, asset management is very important and must be taken seriously. Not only can you benefit from properly documenting your assets, but there can be serious repercussions if you don't.
Article Source: http://neoarticle.com
John Hivern is the owner and operator of FTP Assets, a fantastic resource for information about Asset Management & Protection, For more articles on Asset Management & Protection why not visit: www.ftpasset.com/articles
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