Every business has assets. Whether a food truck, mobile boutique, or a traditional brick and mortar store, the assets that you possess add value to your business and contribute to your day-to-day operations.
That said, the types of assets you’ll need to manage as the owner of a mobile business will differ from those held by a traditional business. While the basic process is the same, it’s important to recognize the specifics in asset tracking for mobile businesses.
Asset Management Basics
Managing assets is a vital part of running any business. To effectively manage assets you’ll need to understand what qualifies as a fixed asset and the ultimate goal behind asset tracking and depreciation.
A fixed asset is any equipment or property that is owned by a business and intended to be placed in service for more than one year. Fixed assets add value to your business because they’re intended to be used for revenue generation or cost savings. They can also have a tremendous impact on your tax position.
It’s important for businesses, especially those that are mobile, to track the value of their resources over time and account for things like wear and tear, damage, or loss.
Because the value of equipment and property will change over time, the assets owned by a business will depreciate in value. The type of asset will determine how quickly an asset depreciates in value. For example, computer equipment depreciates at a faster rate than a vehicle due to the rapid changes in technology and frequency of use associated with each type of asset.
There are different types of schedules and formulas used to calculate asset depreciation, but the key is to apply a strict method of assessing the value of the assets a business owns. It’s important to maintain accuracy because it allows businesses to spread out deductions for the cost of expensive equipment over the amount of time that equipment is expected to be in use.
Assets to Track
For mobile businesses, tracking assets and implementing a depreciation schedule can help business owners stay on top of their expenses, maintain an accurate balance sheet, and simplify tax reporting.
Of course, not all mobile businesses are the same, so there will always be some variables at play regarding what assets you’ll need to track. Here are some common fixed assets for mobile businesses:
Vehicle & repairs
Kitchen equipment (for food trucks)
After you identify the fixed assets you own, you’ll want to assign a depreciation schedule and begin tracking each asset’s value to your business.
Ask for Help
If the idea of tracking your assets and implementing depreciation schedules makes you nervous, consider enlisting the help of an accountant. Your accountant can help you manage your assets and produce accurate financial statements. They can also help you account for any renovations or repairs that increase the value of your assets, such as remodeling your vehicle.
Managing the assets you own is an important part of running your own mobile business. Properly depreciating the value of your assets will help you more accurately file tax returns and determine the best time to purchase future equipment.