A transport business owner runs three vans, a generator and a busy office. The accountant asks for a list of everything the business owns. The list goes back within the hour, and the owner feels confident.
Then the auditors visited and asked to see the generator. Nobody could find it. It had been sold two years earlier, and the list had never been updated.
Has your asset list kept up with your business?
What Counts as a Fixed Asset
A fixed asset is something your business owns and uses over several years, rather than selling on. Vehicles, machinery, furniture, computers, buildings and equipment are common examples.
Small items such as a stapler or a kettle are usually treated as day-to-day expenses. Your accountant can help you decide where to draw that line, based on cost and expected life.
A good asset list covers everything above that line. It is the starting point for depreciation, insurance and audit.
Some assets are easy to forget. Items bought on credit, equipment kept at a branch and assets the owner paid for personally can all slip off the list.
Owner-bought assets used in the business may need to be recorded, but ownership and accounting treatment should be checked with your accountant. A quick check of your invoices and bank statements for large purchases can help catch the rest.
What a Useful Asset List Contains
For each asset, record a clear description, the date bought, the cost and where it is kept. Add a serial number, or a tag number that you attach yourself.
Also note who is responsible for it and what condition it is in. In this case, the list had the vans but not their registration numbers, which made matching slow.
Keep a copy of the purchase invoice with each entry. Auditors often ask for it, and finding it early saves a great deal of time.
Assets bought with a loan or lease need extra care. Note who owns the asset, who holds the paperwork and what is still to be paid. Your accountant needs this to record both the asset and the debt.
Counting What Is Actually There
A list on paper means little until someone checks it against reality. Walk through your premises with the list in hand and tick off each asset you can see.
Tag items with a numbered sticker so they are easy to match next time. Check the condition too, and note anything damaged, idle or missing.
The owner does this over one Saturday. Two items on the list turn out to have been sold already, and an office printer is not on it at all.
Do the count with two people where possible, one reading from the list and one checking the item. A second pair of eyes catches mistakes and reduces the chance of an asset being overlooked.
Take dated photos of larger assets and their tags. They are quick to take and give you proof of condition, location and ownership.
Handling Disposals, Gifts and Write-Offs
Assets leave a business in many ways. They are sold, scrapped, stolen, given away or simply stop working. Each one should be recorded when it happens, not at year-end.
Note the date, the reason and any money received. If you sell an asset, the proceeds and any gain or loss need to be recorded properly.
Have a short approval step, even in a small business. Who is allowed to dispose of an asset, and who updates the list afterwards?
Insurance matters here too. If you still insure an asset you no longer own, you are paying for cover you do not need. If you own one that is not insured, you carry the risk yourself.
A Simple Routine Before Audit Season
Count your assets at least once a year, ideally before the audit begins. Update the list, fix the gaps and keep the supporting papers together.
Ask your accountant to review the depreciation too. Depreciation spreads an asset’s cost over its useful life, and it only works when the list is accurate.
A quick count every quarter keeps the list current and makes the next audit noticeably smoother. How long has it been since your last count?
Share the final list with the person who manages your accounts. When everyone works from the same list, differences are spotted early.
Be Ready for the Asset Count
JS Morlu Gambia can help you organise your fixed asset records and prepare them before audit season. Our accounting team can review your asset list, depreciation and supporting documents. Where an audit is needed, we coordinate audit support through licensed partners. The goal is fewer surprises on audit day and records you can explain with confidence.