Asset Management for Physical Fixed Assets

It's important to understand that in the accounting world, physical asset management is totally different than other asset management techniques. Physical assets are those items within your company or asset portfolios that are actually material goods. This means that equipment, technology equipment, manufactured materials, goods for sale, office equipment, and other items that are actually physical versus items that are nonphysical such as stocks and bonds, cash, savings, retirement funds, or other nonphysical or monetary assets.

Managing your physical aspects of your asset portfolio is just as important as managing those that are nonphysical. Most of the time you're going to find that your physical asset depreciate, need to be replaced, sold, or even bought. This means that understanding the market and the particular physical items is important. Your management team must have experience in your field of expertise in order to handle your physical assets properly.

There are hundreds of stores that are in existence, and many of them don't make it past the five-year mark due to physical asset mismanagement. Not only do they not keep a proper eye on their physical assets, but the market fluctuates and they don't. It's important to understand that your physical assets are what run your company, whether its sales going out the door, manufacturing equipment, or replacement technology.

It's especially important to keep an eye on your physical assets during rough economy. Today's high fuel costs have negatively impacted many different companies who didn't anticipate the extra expense of shipping. Instead of keeping an eye on the cost and passing it on to the consumer in time to afford the increase in shipping, companies kept their prices the same, and suddenly were backlogged with high fuel bills, high shipping costs, and the extra expense of replacing stock. Without a good management team, many companies are folding during today's fuel crises.

Your management techniques of your physical assets, should include the planning and procurement of physical assets as well as what the market will bear for used assets and replacement assets. There is profit to be made by selling equipment before it's completely obsolete, so don't wait until your totally out of touch with technology. Make sure that your employees are thoroughly versed in maintenance, service, and the running of the equipment within your portfolio. Also, your asset management team should include an accountant who is thoroughly versed in depreciation, accurate tax evaluation, as well as compliance.

Your physical assets within your portfolio are even more important, than your nonphysical assets. These assets can actually depreciate, become worthless, mismanaged, become unusable through non-service or maintenance, and can even walk out the door on you. Without proper management of your physical assets, there's almost a guarantee that you will not have any nonphysical assets.