Fixed Asset Management for Small Business
No matter what kind of business you run,
you probably own property that helps you
provide products and services. Your company’s
assets are a valuable part of your operations
and need to be carefully maintained.
Use a fixed asset management system to
organise information about your business
What are fixed assets?
Fixed assets are long-term items that add value
to your business. They are tangible assets that
you do not expect to convert into cash in less than
one year. Long-term intangible property can also
be called a fixed asset, like a trademark or patent.
You buy fixed assets to produce goods or services,
rent to third parties, or use in your business.
The following are common examples of fixed
• Intangible assets
Fixed assets have a useful life longer than one
year. For this reason, inventory is not a
fixed asset because you want to convert it
into cash as fast as possible.
What is fixed asset management?
Since you operate a small business, managing
your fixed assets shouldn’t be a huge headache.
Fixed asset management helps you track,
protect, and value your company’s assets.
You can use serial numbered asset tags to
manage fixed assets. Asset tags are labels with
bar codes that contain information about each
asset. You can keep track of your assets by using a
mobile bar code reader and creating reports.
Fixed asset management software can help you
manage business property. There are many
different kinds of software solutions for
managing fixed assets. Make sure you choose
one made for small business owners.
The software program should be easy to use and
have all the features you need to manage assets.
How to manage fixed assets
To manage fixed assets, keep track of key details
about your business property. These details
include the following items.
You need to know where your fixed assets are
located. This is important if you use company
property outside of your business or you open a
second business location.
Use a system for tracking when you or a team
member moves a fixed asset. For example, if your
employees use company vehicles to meet clients,
have them record where they go.
Keep track of how many fixed assets you have.
This will help you know when to buy more
property. For example, you might find a good
deal on a piece of equipment. But if you already
have enough of the same equipment, you might
not need to buy another. Or, you might find that
you don’t have enough equipment and it’s time to
Note the condition of your fixed assets. Is your
business property in pristine condition? Or, is it
older and could use some work? The condition
of your assets helps you schedule maintenance,
plan purchases, and determine small business
You must keep up with maintenance schedules to
get the longest life out of your fixed assets. Create
a general maintenance schedule for your business
property. When unplanned maintenance occurs,
note it in your fixed asset management records.
Usually, you don’t report the entire cost of a fixed
asset in one year. Instead, you depreciate the
expense to account for the asset’s declining value
over time. You report portions of the total cost
over a fixed number of years. You need to track
each fixed asset’s depreciation status to know
what to report on your business tax return.
Fixed asset management best practices
The management of fixed assets can be tricky
if you’re not organised. You need to record the
purchase, depreciation, and sale of fixed assets in your books.
The fixed asset management process is for
accounting, preventative maintenance, and theft
deterrence. You need to know the following
information about your fixed assets:
• Your legal and reporting obligations for fixed
• How you handle depreciation
• Your budget for fixed assets
• The location of your fixed assets
• The value of your fixed assets
• The dollar amounts you buy and sell fixed
You can use data to create reports about business
property. The reports help you review your
financial health, file tax forms, and talk with
The importance of fixed assets management
Managing fixed assets makes it easier when issues
and opportunities come up. Here are just a few
ways fixed asset management can help your
• Get through unexpected repairs and other
property issues smoothly: As a small business
owner, you know that unforeseen events happen
every day. When something breaks, it’s easier to
handle the issue if you already know what’s going
on with your assets.
• Know the best times to purchase new assets:
Fixed asset management shows you the right
moments to jump on opportunities to gain assets.
• Keep up with your tax obligations:
When you buy long-term assets, you usually
Fixed asset management helps you accurately
calculate depreciation expenses and see an asset’s
• Determine the value of your business:
Fixed assets add value to the overall worth of your
company. This is important for selling your
business and speaking with investors.