Fixed Assets are one of the most important parts of a business. One cannot imagine a business without any fixed asset. No matter the size of the business every business will require some kind of fixed asset to continue on with the business activity.
Fixed Assets can be defined as those assets which are purchased with the intention of using them on a long term basis. Such assets cannot be converted cash for use very quickly. These assets usually include assets such as Building, Land, Plant and Equipment etc.
These fixed assets are usually used in the production activities of the business and are not expected to be consumed or to be converted to cash before at least a year.
The importance of fixed assets to a business is paramount and these assets can affect the working of the business in a huge way. Thus it is very much important to manage and maintain the fixed assets.
Fixed Asset Management
Fixed asset management is a system or a process that will help the management in tracking, valuing and protecting all the assets of the company. With the increase in technology, there has been the development of software that can help a company manage all its fixed assets.
How to manage the Fixed Assets of the Company?
In order to maintain and manage the Fixed Assets of a company, the management should keep track of certain important details about the fixed assets of the company. These are:
- Find the Location
First and foremost, the company should find out where the asset is located. An asset can be located in the premises of your company as well as any were in the world. Keeping a track of the fixed assets of the company is the first step towards the management of these assets.
- Find the Quantity
The management also needs to understand what is the quantity of asset which is under control of the business. This will allow the management to understand which assets it needs more of and which assets are sufficient for its utilization. The management can also plan for the future as to whether it needs to buy more of such assets or not.
- Find their Depreciation Status
Every asset loses some value with the passage of time. The management needs to track the value of each of its asset so that the correct depreciation can be subtracted from it. This will also help while filing taxes as the correct amount of the asset should be mentioned which also consists of the depreciated amount.
- Find their Present condition
The condition of the asset is of great value to the business. The condition of the asset will help the management in making the decision about the future of the business. The business will also prepare a plan for the maintenance schedules for these businesses as well as properly allocate the resources for the maintenance of the asset.
- Use and Importance of the Asset
There are many assets that may be indispensable for the business where as there can also be assets that do not play any role in the business activity and are there just for either face value or sentimental value. The management should identify such assets as the company may use some of the assets to increase the liquidity of the company in the future.
These are five things which should be kept in mind while trying to manage the fixed assets of the business. Once the management understands about all its fixed assets the it can properly formulate plans for the future of the business and can also use the assets in the most proper way.
Asset management may look easy but as the size of the business increases, the complexity of the asset management also increases. Thus one should take the help of professionals who will provide the right solution at the right time for the right se of problem.
If you want asset management services for your business in the United Arab Emirates then JAXA Chartered Accountants can help you. JAXA is a reputed firm that will understand your business activities and provide you with a solution accordingly. For more details on the services provided by JAXA Chartered Accountant Contact Us. We will be happy to answer all your queries.