Archive: Jul 2012

More Benefits of Upgrading to Fixed Asset Management Software

In a recent blog entry, we explored some of the reasons it can be beneficial for a company to upgrade to fixed asset management software, rather than relying on a spreadsheet-based fixed asset tracking system. Specifically, errors on spreadsheets introduce the possibility of incorrect depreciation calculation. Spreadsheets are also not as secure as fixed asset software, and do not generate an audit trail, making it tricky to determine when and why a particular piece of data was entered, as well as by whom. Linking parent/child assets Spreadsheets also don’t provide the ability to link parent/child assets in order to establish hierarchical relationships between asset groups…

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The Ins and Outs of Digital Asset Management

In an increasingly digitized world, business owners and managers have a wealth of options to choose from for management of inventory and fixed assets. For many companies that have several types of software and media, digital asset management is imperative to keep everything in running order. Software can be very expensive, and like any other asset, it can depreciate over time. Software depreciation must be tracked to ensure that projections and forecasts of asset valuations are accurate and up to date, and there are software offerings that help to manage these calculations. Tracking digital assets is just as important as…

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The Capital Behind the Fixed Asset

Fixed capital – money that is invested in fixed assets – is a crucial part of every organization. This is because it has a reusable value and can be leveraged by enterprises over an extended period of time. Indeed, the fixed assets in which it’s invested typically stay with an organization through more than one accounting period – and may even extend for as long as several decades. For some fixed assets, such as buildings and land, the investment is virtually indefinite. Fixed capital may be invested in either of the two fixed asset categories – tangible and intangible. Tangible…

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Putting Together a Fixed Asset Budget For The Upcoming Fiscal Year

Budget season is a time when many organizations take a close look at their fixed asset expenditures for the past fiscal year and come up with viable plans for the next one. Capital budgets should be informed by any developments in a company’s finances or other situational changes that have occurred since the last time a financial plan was put together, and must also be compiled with the organization’s long-term capital improvement plan in mind. Because fixed assets stay on a company’s books for longer than one year, it’s important to involve depreciation in the equation. As well as estimating…

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Explaining the Depreciation to Fixed Asset Ratio

The depreciation to fixed assets ratio offers companies a look at how quickly they are replacing their capital holdings – specifically, how fast items are being written off in accordance with asset depreciation schedules. The ratio can be calculated using a simple formula. Take the depreciation figure in your company’s profit and loss statement and divide it by the total fixed assets, minus the value of any land the firm owns. Land doesn’t undergo depreciation because it’s not considered to “wear out” and will never need replacing, unlike the buildings that may be constructed on it or the equipment it…

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