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Introduction to managing assets
Keeping track of and managing your assets will help you avoid risks — and get the most value for money.
Along with your people, assets give your business value, so they should be looked after with care.
Whether you’re looking after your fixed, current or intangible assets, there are lots of ways you can manage them so you get the most out of them.
Your intellectual property assets, eg patents and copyrights, are depreciable at tax time.
The importance of asset management
The time and energy you need to manage your assets will largely depend on how big and what type of business you are.
If you sell lots of products, you’ll need different systems to look after your inventory compared to service-based companies.
Regardless of what kind of business you are, it’s important to keep accurate records of what you own.
Managing your assets helps you:
- keep an accurate balance sheet
- avoid tax and compliance issues
- make sure you’re properly insured
- prevent wastage and theft
- determine the real value of your business.
Most businesses do this by keeping an up-to-date asset register — or getting their accountant to keep one for them.
A detailed asset register is particularly important if you want to sell.
You’ll have evidence to support the asking price for your business.
Managing your fixed assets
Your fixed assets are the big-ticket items you’ve purchased to run your business.
Most of your fixed assets can be depreciated. So keeping accurate records is particularly important.
Managing your fixed assets can mean:
- Having your accountant keep an up-to-date record of your assets.
- Keeping a fixed asset register.
- Using tools and software programs.
- Storing and protecting your assets.
- Accurately calculating your asset’s depreciation using Inland Revenue's calculator(external link) or getting an accountant to do so.
- Doing a complete inventory audit.
- Hiring a fixed asset manager.
Choose an asset-tracking system that can handle growth if you want to expand.
As you buy more assets, it’s easier to simply add them to an existing system than have to start again from scratch.
Managing your current assets
Your current assets are the money you own, and the things you sell to make money. Managing your current assets can mean:
- Getting financial advice on a regular basis.
- Using software or systems to keep track of your inventory.
- Having tight invoicing protocols.
- Managing your cash flow.
Don’t underestimate the worth of your intangible assets.
These accounted for 84% of the value of the S&P 500 businesses, according to a recent report.
Managing intangible assets
Intangible assets are your intellectual property, goodwill and brand.
Because they aren’t physical things, they can be difficult to record — but your intangible assets can be one of the most valuable things you own. It pays to identify any of your intangible assets and to look after them carefully.
Ways to manage your intangible assets include:
- Securing your business name.
- Protecting your intellectual property.
- Getting an auditor to identify the true value of your intangible assets.
- Maintaining a trade mark portfolio.
- Including the copyright and other IP clause(external link) in your employment agreements.
- Speak to an IP advisor to make sure your intangible assets are protected.
