Record Your Assets

Assets constitute of two major components - cash and physical assets. While asset management is a fairly easy task, most of us - especially those who own small businesses
- do not pay much heed to this essential task. The necessity of good practice dawns on us only when the tax season is round the corner.

The main thing you need to remember when dealing with your cash accounts and assets is that good book keeping and accounting practices will save you time and money in the long run. You need to keep exact track of income and spending, no matter how small or insignificant the dollar value may be. A few cents here and there can add up to hundreds of dollars in no time.

Following of a good accounting practice and asset management is extremely important, especially when you are required to submit tax to the government. There are numerous cases where small issues that appear insignificant come under the eye of scrutiny and can haunt you for years with the IRS on your back.

Exact and detailed accounting books will also help you should you need to apply for a loan or a small business grant. They will need to know all of your assets and if you have all the proper documentation, and books with accurate records, you will be able to easily prove you are a reliable 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 theyre 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.

Managing and properly reporting your physical assets needs to take several things into account. One of these is depreciation. When we talk about cars, the concept of depreciation becomes very clear. When you buy a car brand new at $15,000 you cant expect to sell it five years later for the exact same price. As soon as car is driven off the lot it deprecates in value. Mileage, wear and tear, and any accidents also play a role in the depreciation of the car.
The same goes for almost anything else you may be considering an asset. Property is an exception to this rule and in many areas goes up in value.

Office equipment and most other equipment purchased for a small business does follow the deprecation rule and must be taken into account when you are recording your assets. You may be feeling confused and overwhelmed at this point, but asset management can be fairly easy, given the proper tools.

The mature business market offers numerous software programs that can assist you with your asset management and book keeping. While most of these are heavily documented and are very user friendly, some assistance from a software expert can get you customized solutions too. However, when choosing to seek external assistance for your asset management and accounting, then the right choice would be a qualified CPA.

The main point to remember that asset management in small businesses is just as important as it is in large ones. Be sure to take this into consideration and document everything. You may end up paying a high price if you dont.