How To Stay on Top of Your Business’s Assets
Amassing assets is an excellent way to ensure the company stays afloat and gives you leverage for negotiations when you hit rock bottom. However, one of most company owners’ greatest mistakes is not paying attention to their assets.
Any sane entrepreneur should stay on top of their assets to ascertain liquidity and the company’s stability. Here are a few tricks to use when taking charge of this front.
Track Your Inventory
Knowing the real-time location of your assets, especially portable ones, is an excellent way to stay on top of your business’ assets. Asset tracking software or devices like drones can be used to find where they are and their condition without tasking an employee with this job.
Companies specializing in hiring out their inventory can benefit from this, especially when dealing with demanding clients who may not want to disclose any damages to your assets.
Identify What Belongs to You
Don’t be among the many business owners clueless about their company assets. While this may mean that you have too many assets that you lose count of them, it’s also a red flag that you’re careless with your inventory.
It creates a loophole for anyone lurking in the dark to jump at the first opportunity to grab what isn’t theirs as long as it lies unattended. Listing your assets allows you to name and identify all your inventory quickly. Consequently, you can effortlessly track and determine their whereabouts when you need information on their state.
Valuation
What is the value of each item you own? Have these items appreciated or depreciated since you got them? You can put a price tag on them depending on their condition or go for the market value depending on particular features.
If you have enough funds, you can hire a valuer to do the work for you. If money for a valuer isn’t readily available, you can effortlessly search the internet for items of the same caliber as what you have and estimate their value using the optics you receive.
Contract Asset Insurance
Accidents happen; when this happens, you don’t want to lament your inability to make a solid financial decision to insure your property. If your car runs over someone or a thief gets hold of something invaluable to you, your security lies in the type of asset insurance you got.
The good thing about business insurance is that it takes care of item replacement of stolen inventory or those damaged by a natural or artificial calamity. You may only need to do this for high-value assets that will significantly dent your bank balance if you have to replace them.
Keep a Record of The Assets
Your accounting team must have a detailed record of assets under your name. Your balance sheet must make sense by considering the value of each item your business owns. If you run a small business and are adept with accounting and bookkeeping requirements, you can use the accounting software you have to complete this task.
However, you must adjust this document every so often to reflect the actual value of your assets. This allows you to benefit from tax reductions and know what you’re dealing with, especially if your inventory depreciates quickly after years of use. And most importantly, you win at IRS audits when they send someone to scrutinize your financial dealings.
Maintenance Management
Nothing is as derailing as the unavailability of inventory due to irregular repairs and maintenance. It means the company has to stall particular tasks or hire outside help to complete the work. This expensive and reckless affair can easily cause your depreciating assets to become useless quickly.
Ensure you schedule timely maintenance for everything you have. It slows down the depreciation, which ensures you get the most service out of everything under your name.
Stay Abreast of Tax Requirements
If you have land or buildings as part of your inventory, you may have to pay land rates and other property taxes depending on the value. If you use the property to make money, you must file taxes for the income you receive.
In other cases, you can receive tax relief, especially if you spread the payments over the years. If the items depreciate, you will pay less as their value decreases. This allows you to enjoy a lawsuit-free life.
In a Nutshell
Business owners must know what’s happening in their company, especially regarding assets. This means they should make plans to insure every invaluable asset. Valuation of these items allows you to determine what is worth this effort and what’s not. Most importantly, pay every tax requirement to avoid losing your property to repossession by the IRS.