An often overlooked area in business is the management of physical assets.
And yet, in most businesses, these assets are the foundation for success
and future growth.
Assets by definition are utilized by organizations to generate future cash
flows. Organizations that allocate and deploy their assets effectively generally
earn a higher return on those assets and improve their prospects for growth.
It's easy to see a correlation between good management of cash and
other financial assets on the returns in a business. Businesses today are
also recognizing the importance of maintaining a stable, well managed pool
of labor to improve performance. However, most companies spend very little
time managing their physical assets once they have been purchased. They spend
hours budgeting for, financing and purchasing these assets and then don't
bother to track these assets at all, or at best create a list of assets in
a spreadsheet for their external accountant to prepare tax returns.
It just doesn't make sense to ignore the management of physical assets
in a business. Physical assets, such as computers, help businesses manage
their financial assets like cash and investments and their intellectual
assets such as creative ideas and management decisions. Machinery and office
equipment are what people in a business use to conduct their everyday activities.
Why don't more businesses manage their physical assets?
Business Owners and Managers usually justify the lack of attention to managing
physical assets on the principle of cost benefit analysis. "We don't
have enough assets to warrant an investment in a Fixed Assets software program." Or "The
cost to purchase and implement a good Fixed Asset solution is higher than
the benefit we would receive." Or "Unless the solution is tightly
integrated with the rest of my accounting system, it's too much work
to set up and maintain a Fixed Asset Ledger. I'd rather use a spreadsheet."
Well, Asset Management solutions today take away those excuses by providing
a comprehensive Fixed Assets
Ledger that is tightly integrated with your existing accounting software.This
makes the solution inexpensive to implement, but well suited to handle
all aspects of your fixed asset accounting - from acquisition, depreciation,
valuation (both book and tax), through disposal.
They also support current depreciation calculation
methods (including US MACRS), and allow the expense
to be projected for future periods so you can choose which periods
in your fiscal calendar you want to depreciate an asset. In addition, Adjustment
Entry functions allow assets to be re-valued for either book or tax purposes,
depreciation rates or methods to be changed, assets to be transferred between
locations and many other features.
And, because properly managing your assets goes beyond accounting transactions,
you should also consider
how Asset Maintenance, Asset Leasing and Asset Tracking play a part in your
system.
With the end of the calendar year upon us, now may be a good time to re-evaluate
how you are handling your
physical assets and consider how a tightly integrated,
cost effective solution can benefit you in the new year.
For additional information or to answer any questions, please contact
Laura Kasman at lkasman@kastechco.com
or 215-702-8155.
