The importance of maintaining an asset register is in most cases is overruled by small business firms. Maintaining an asset register assists industrial owners in short term and long term planning. The register is used to record information about what kind of assets are used in business, tax deductions etc.
What does an asset register record?
An asset register records information about the assets owned by the business, this includes date of purchase, cost of product, product description, installation charges, estimated lifetime, warranty coverage, salvage value, periodic maintenance costs, tax depreciation and profit incurred. Both tangible and intangible assets can be recorded. Tangible assets include land, building, industrial machinery, motor vehicles, furniture etc. Intangible assets include computer software, licenses, brand names, trademarks, patents, copyrights etc. An asset register can also be used to record movable and immovable assets.
Benefits of maintaining an asset register
Maintaining an asset register helps business owners insure claims, pay taxes on time and perform scheduled maintenance operations. It also helps them calculate the resale value of their asset by gauging the salvage value. Clients can file tax returns and opt for lowered rate of insurance premium by producing their asset records. Insurance providers go through the asset records and offer a lower premium rates. Clients can use asset records as a mortgage to avail loans from banks.
Assist owners in short term and long term planning
A well documented asset record can be used as a valuable tool in any business. They help companies keep check of the details of all resources and asses risks. In today’s world most records are recorded in computers and virtual databases therefore it is hard to be tampered with.
Assets can be registered physically using pen and paper or digitally into a database. Maintaining a clear record of your assets makes it easier for auditors to conduct inspection. Records which are stored in a database can be accessed only by authorised users. This reduces the risk of theft to a great extent. It can also prove to be an advantage in the event of police investigation.
Assists clients in effective asset organisation
Maintaining an asset record helps keep track of your movable assets, it can help in faster tracking. An organisation’s assets can be safeguarded form risks which could turn out to be a major threat to the business. This also helps maximise the overall revenue of the organisation.
By maintaining a record of assets which benefit the organisation, owners cannot miss out on scheduled maintenance. It helps accountants and managers maintain financial records, optimise the business credit rating and strengthen customer relationship.