Assets bring value to the business. Therefore, it is essential for any business to increase its assets over time and develop itself into a better one. This is because assets help in generating revenue. Thus, directly or indirectly, they are enhancing the business value and assist in its successful run. Opting to hire Xero bookkeeping services, Adelaide, to help with accounting as well as asset management is one of the smartest decisions that any business owner can make.
What do you mean by assets?
For a business, the assets are anything that adds value to it. That is, it could be property, trademarks, inventory, or patents associated with it. It depends on the business owners if they wish to sell off these assets to convert them to cash. Many business owners opt for this as they plan to utilize the cash earned from these assets for different business purposes. Seeking help from reliable Xero bookkeeping services Adelaide, these businesses come up with strategies to benefit from the assets over a long period of time.
Different types of assets in the business
Mainly, there are different types of assets in any business. These are:
#1 Tangible assets
Tangible assets are the type of assets which directly add value to the business, and thus, they can depreciate over time. The most common tangible assets are cash, land/ property, inventory, equipment, stocks, as well as bonds. These types of assets can further be broken down into current as well as fixed assets.
#2 Intangible assets
These are the type of assets which are a complete opposite of the tangible ones. These types of assets are not physical but add high value to the business. The crucial part here is that these assets cannot be converted to cash very easily. However, they can be amortized. This can be done by distributing its cost over a period. Determination of the overall costs of these assets is difficult as they are non-physical in nature. However, one can determine their value and use with the assistance of Xero bookkeeping services Adelaide.
The most common intangible assets include patents, logos, copyrights, trademarks, licenses, etc.
#3 Current assets
Current assets are the type of tangible assets which the company can use within a period of one year itself to convert to cash. These are generally the type of assets which are used on a daily basis to perform different business operations. Professional Xero bookkeeping services Adelaide can be of great assistance in this type of asset management.
These assets can be called short-term investments too because they are being used in a year itself. Few current assets can also be liquid in nature, for example- stocks. Other current assets include accounts, inventory, cash, prepaid expenses.
#4 Fixed assets
These are long term tangible assets of a business. Fixed assets take longer than just one year to be converted to cash. Fixed assets are a great way to expand the business and add more value to it. However, these type of assets does depreciate over time. For instance, a land’s or property’s value might depreciate over time, depending on the real estate market. Depending on the accounts maintained by expert Xero bookkeeping services Adelaide, the business owners can decide how to manage the fixed assets. The main fixed assets are vehicles, property, machinery and equipment.
Determination of the value of assets
If you think that the value of an asset is its basic cost itself, then no, you are wrong. There are a lot of factors involved in the determination of any asset’s value. Things like market value as well as depreciation affect the costs greatly at times. With the assistance of Xero bookkeeping services Adelaide, the businesses can handle the accounting and thus, look into how much value as well as cash they have in hand for utilizing in selling or buying of assets.
The actual price of the asset is its ‘fair market value.’ This value might be lower, higher or equal to the original cost of the asset when it was bought. A proper cost analysis must be done to compare the market prices and other factors. Evaluating the different assets with the help of Xero bookkeeping services, Adelaide will ensure the best possible value of them in the market. This is because the accounts at the bookkeeping firm are experienced and have the right knowledge required to consider depreciation expenses alongside the other details.
Recording the assets in accounting while maintaining financial reports
The different types of assets available to help in estimating the financial status of the business. This can best be achieved by maintaining the balance sheets of the company properly. To do so, the expertise of professionals at Xero bookkeeping services Adelaide is required. Accuracy is essential when it comes to maintaining financial records.
There are proper methods that should be followed while maintaining the business balance sheet. For instance, the assets must be recorded in the sheet in descending order on the basis of their liquidity. All these intricacies are properly handled by the Xero bookkeeping services Adelaide that you hire for the business.
The idea to look for is that the more liquid the asset is, the easier it becomes to sell it for cash. Strategically planning these things out is essential for the business.
If you are looking for premium accounting and bookkeeping services, hire AQ Bookkeeping for your business in Australia. The firm is considered to be one of the best Xero bookkeeping services Adelaide because of its reputation in the market that has developed over the years. The company has served huge clients from different sectors in the market. Therefore, it has the right experts and professionals required to handle different issues pertaining to the finances of the company. Managing the finances well would ensure that the company scales to greater height sand manages its assets smartly. Therefore, if you are a business owner, hire AQ Bookkeeping today to take care of the business assets and their values in the market.