Managing Your Assets
By: John Hivern

If you own and run a small business you probably know how important it is to properly manage your assets, especially when tax season rolls around. Managing your assets can be fairly easy, no matter what type of assets you're talking about. This includes cash as an asset and physical assets as well.

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.

If you need to submit tax to the government a good accounting practice and asset management is extremely important. You may think something may be totally insignificant, but if you get audited, even years past of slight indiscretions can come back to haunt you.

Accounting is also essential when you require loans/grants for business expansion/development. Such loans require submission of detailed accounting books. Under these circumstances, possession of proper documentation and books with accurate records enables you to establish your credentials 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.

Reporting and managing your physical assets consists of several events. One of these is depreciation. You can easily understand depreciation when you think about a car. You already know that if you bought a car in 2000 for $15,000, you won't be able to sell it for that much in 2005. In fact, the first time you drive it, the value decreases. That's what depreciation is. Other things may decrease its value, such as mileage, wear and tear, and accidents. Everything except property is an asset subject to depreciation. Property usually increases in value over time.

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.

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 key to staying on top of things is to take the task of asset management and book keeping with the intensity and seriousness it deserves. Not only can small businesses benefit from properly documenting their assets, but there can be serious repercussions if they do not. Correct asset management practices is an absolute essential.

Article Source: http://www.ArticleJoe.com

John Hivern is the chief editor for FTP Assets, the best place on the internet for information about Asset Management & Protection. For more articles on Asset Management & Protection why not visit: www.ftpasset.com/articles
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