When it comes to keeping track of business assets, your company needs a clear process of managing its assets in a transparent and simple way. Fixed asset registers are often the first choice when tackling this topic.
Put simply, a fixed asset register lists and details all of the items an organization owns in order to generate revenue. Examples of fixed assets could include a company van that is used to make deliveries or a piece of specialist machinery used to manufacture products. While tangible assets usually make up the bulk of a fixed asset register, other less physical things can be included that translate to real value for the business–intellectual property such as trademarks are a good example of this.
It is crucial for an organization to keep track of the assets that it owns in the form of an asset register. It needs to clearly define, at any given point in time, what its assets are, what condition they are in, and any costs associated with them. This helps the business maintain the assets, with the aim of prolonging their lifespan. What’s more, there are often statutory requirements for businesses to list their assets for regulatory reasons.
Fixed asset registers, as detailed above, are certainly the most commonly used form of asset registers used in organizations. However, there are other varieties that, while are generally more specialist and specific, suit a range of other purposes. For example, an IT or software asset register lists the property that a business owns, such as computers and other IT hardware and software.
Creating an asset register for your organization is not difficult, but the process certainly benefits from a clear and robust structure. An asset register system is key here. Start by bullet pointing the main assets your business owns. Using a systematic order is a good idea here, perhaps by location, type, or even in basic alphabetical order.
Another helpful tip in asset management is to consider using a labeling system. This is a useful way of verifying the identity and the authenticity of each asset quickly and securely. If you have a large number of assets, it is likely that your business would benefit from using either some accounting software, or as a minimum, a well-structured spreadsheet to record the assets. This makes it substantially easier to track and monitor your assets over a period of time.
Some organizations, particularly smaller ones, question the need to create and maintain a clear asset register. There are, however, a number of key benefits. First, it is a relatively straightforward method of getting a picture of the financial health of the business in relation to what it owns and the relative worth. It can also help track depreciation, and it is critical for complying with some regulatory requirements.
A basic asset register should include the name of the asset, any serial or model numbers used to identify it, its age, date of purchase, estimated value, and approximate condition.
There are many types of fixed asset register software on the market, with the majority of those being included as part of a more comprehensive accounting software solution. Asset register apps can also be useful. Before investing in asset register software, consider the size of your organization and approximate number and complexity of assets, as well as the purpose for which you intend to use the software. Take time to review your options thoroughly, and take free demos when possible to ensure the software meets your needs.
An asset register is a useful working document that should be reviewed regularly to ensure that it is representative of your organization’s financial position.