Record 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.

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.

Often, small business owners tend to overlook certain items, not realizing that they are actually assets. Anything worth money, or that can be sold, is considered an asset. For instance, most of us know that our computer equipment is an asset, but we may overlook the desk or even the chair we're sitting on. Take a look around and see if you've missed any assets in your reconciliation.

The concept of depreciation is important to understand when managing physical assets. For example a brand new car worth $18,000, depreciates in value as soon as it is driven off the lot. What we pay for a brand new item is certainly not the price we can expect to sell it five years later. For a car, factors such as mileage, wear and tear, and any accidents also play a role in the depreciation. While this rule of depreciation applies to all physical assets, property is an exception which may in fact appreciate in a few areas.

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 don't.

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

John Hivern is the webmaster for FTP Assets, a fantastic resource for information about Asset Management & Protection, For more articles on Asset Management & Protection why not visit: www.ftpasset.com/articles
Get your own completely unique content version of this article.

Please Rate this Article

Not yet Rated