Accounting

Managing Fixed Assets in Business

By David Trounce
Apr 06, 2016 • 3 min read
Table of Contents

      Company startup, whether traditional, e-commerce, or, as is more common, a blend of both involves the four major market segments which include consumer to business, consumer to consumer, business to consumer, and business to business.

      Whatever the model of business you adopt, it is almost certain you are going to be holding and managing fixed assets.

      What are fixed assets?

      Fixed assets are items which are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment. They are items used to enable a business to sell and manage their services and products.

      While many smaller companies will have less fixed assets than their larger counterparts, these assets still exist and may include:

      Computers, Printers, Software
      Machinery, plant equipment
      Storage equipment
      Office Furniture
      Vehicles

      For the owner of any large business, investing in fixed assets is inevitable. Even for an e-commerce business, which may maintain fewer assets it is still important to manage the available fixed assets for all kinds of reasons

      Questions to Ask When Choosing Fixed Asset Management Software

      What Kind of Software Do I Need?

      Choosing fixed asset management software is like choosing a business partner. From large enterprise software like MYOB EXO to customised MYOB Exo modules created by companies like Indivia, your software forms a foundation for a myriad of business processes.

      As Paul Angus from CSO Australia points out,

      “In my view, the starting point is Asset Management because we are talking about a process that develops over time.”

      In determining the right type of fixed asset management software you first need to be able to answer some basic questions about the extent of your company’s services and obligations to its clients.

      If you’re on the journey of finding the fixed asset management software that will match your company management processes, here are some of the most important questions you should ask before choosing.

      • What are the legal and reporting obligations of the company?
      • Does the fixed asset management software support all depreciation methods?
      • Can the fixed asset management software be used in budgeting?
      • Are the reporting facilities of the fixed asset management software comprehensive yet easy-to-use?
      • Will the fixed asset management software be tuned to meet the requirements of each division within the company?
      • Can the software handle real-time problems and provide reliable solutions?
      • How will it improve internal, business to business and business to client relations?

      Three Important Reasons Why Managing Your Fixed Assets Is a Must

      In the past few years, the large majority of startup companies have revealed that they did not utilise fixed asset management software as part of their internal processes.

      According to Adam McDean of BusinessBasics Australia,

      “Where these fundamental business and management processes are not in place, companies find it especially difficult to expand and maintain cohesion within their organisation.”

      As a result, the company has encountered problems with managing its legal obligations as well as creating problems when it came to expansion.

      The most common problems include:
      Damage and loss of assets
      Violation of taxation obligations, and,
      Additional costs as a result of poor organisation and maintenance of assets.

      Effective asset management allows you to track the availability of properties and resources.

      Managing fixed assets effectively helps business to determine the availability of resources that are essential for the growth and development of the business.

      Fixed assets management helps determine the overall value of business.

      This is one of the most critical aspects of any business, whether e-commerce or a traditional store or large corporation. You should always be able to answer questions related to your company’s current value.

      Of course, all of the invested resources and properties of a business must be recorded, filed and maintained in order for you to answer this question.

      Having fixed assets management systems helps business to meet its tax requirements and also enables faster inventory monitoring.

      About the author
      David Trounce

      David is a freelance writer and journalist living in Australia. David has created a number of successful startups in e-commerce and specialises in small business marketing online. When not at his desk David can be found underwater or behind a good book.

      Share Article:

      Business insights right to your inbox

      Subscribe to our weekly newsletter for industry news and business strategies and tips

      Subscribe to the newsletter

      Subscribe to our weekly newsletter for industry news and business strategies and tips.