Managing your fixed assets is extremely tough when you’ve just started a business, and it’s only going to get harder as your company grows and develops. When tracking and managing your fixed assets, you need to be extremely dedicated and conscientious. A big enough slip-up when managing your fixed assets can land you in a full-blown financial disaster, which could drive your business into the ground. Here are some of the best practices for managing your fixed assets…

The kind of software you use for tracking and managing your assets makes all the difference in terms of accuracy, and the amount of time you need to put into the whole task. If you stick to older, more affordable tracking systems, you could risk falling behind the level of organisation at your competitors’ companies, and these tools can wind up being one big waste of time. Aside from making sure the tech tools you’re using are reliable, they also need to be scalable. The system you use needs to be able to grow at the same pace as your company. Fail to assure this, and you may find yourself in the tough position of having to move between different systems, which can represent a huge cost.

Think About Depreciation

If you’re not able to accurately track your assets’ depreciation, your company could easily wind up paying far too much in both tax and insurance. In an ideal situation, your asset management system should cover an accurate calculation of depreciation, provided that your purchasing information is accurate as well. This is going to be less important when it comes to basic fixed assets, for example a diesel generator, but much moreso when you’re purchasing specialised, cutting-edge technology specific to your business’s niche. Even little mistakes in tracking depreciation can lead to a major deficit in your cash flow. Furthermore, failing to depreciate your fixed assets accurately could lead to your business running afoul of regulatory bodies. Even if you’re not required to keep the government updated on your fixed assets, you may have a responsibility to keep board members and big investors in the loop. Finally, if you run into a major problem through poor asset depreciation tracking, it could tarnish your brand’s reputation.

All too often, start-ups rely on generic, cookie-cutter reports to crunch through their fixed asset reporting, and wind up regretting the practice when it’s far too late. When you’re working out a schedule for managing your fixed assets, you need to make sure the system is tailored to your industry, and your company specifically. Fail to do this, and you’ll just make it difficult for your management to draw any important and relevant information from all the data you’re reaping. While asset management tools can be tweaked and customised to some degree, businesses that occupy a fairly narrow niche may need to engineer a bespoke, in-house solution.

Follow these tips for managing your fixed assets, and you’ll make your job so much easier.