Why Financial Advice is Essential for Managing Company Assets

Asset management is one of those areas that entrepreneurs and established business leaders alike tend to overlook. It’s not a particularly glamorous task and tends to involve meticulous recordkeeping. However, you might find yourself in a sticky situation at some point if you don’t ensure a qualified professional is keeping track of your company’s assets.

Asset management may refer to more than one thing. A business can hold concrete items as tangible assets. They can be things like property or equipment that the business owns or leases. It could also refer to product stock on hand.

Those kinds of assets must be accounted for in the regular finances of the business. The value of the assets often depreciates based on predetermined schedules provided by HMRC. In other words, a new computer might gradually lose its value as an asset over a set period, such as five years, starting at 100% and dropping in value on an annual basis until it zeroes out. However, some tangible assets such as real estate or product stock, might increase in value over time and can vary unpredictably based on market forces.

You need to know what your concrete assets are worth at any given time, since they can have a direct bearing on your business’s value and its ability to secure loans that may be necessary to a greater or lesser degree in allowing your business to continue to operate productively. Since you can calculate the value of many of your business’s tangible assets based on established rules, it may be possible to handle this aspect of your accounting in the early stages of a new business when the assets are fewer and of less value. As you grow and increase the value and diversity of your assets, you are likely to require the services of a finance professional to be sure you are accounting for the appreciation and depreciation of your company assets accurately and on a reasonable timeline.

Asset management may also refer to a specific type of specialist financial professional who helps businesses with their investments. This service is what you might be more familiar with as a stockbroker or investment firm, but they may be a more accessible solution, and tend to work on a fee basis as opposed to a portion of sales.

In contrast to tangible assets, which tend to be more solid and simpler to account for, investments are considered of real worth to a business, however, they can appreciate or depreciate unpredictably. They can be based on a wide range of things, from currency to real estate in wider investment portfolios. They could also be direct investments in another business, since many businesses raise outside funding.

Asset managers provide several benefits to business owners. They are tasked with understanding your business needs and objectives, as well as understanding the market and trends among the types of assets you hold. That enables them to suggest appropriate actions when necessary, in addition to maintaining accurate accounting of all changes in asset value. A good asset manager can become an invaluable business resource, helping you with strategic decision making when it comes to adding new investments and mitigating asset depreciation.

Internal asset management tends to be shuffled behind other competing priorities even when you do have dedicated finance team members. The urgency of the billing-collections cycle and payroll often pushes asset management into the background, but to really avoid unnecessary losses, make the most of assets on hand, and respond to favourable market conditions by adding new assets, you need a specialist devoted to asset management. Choose a reputable firm or independent advisor with a track record of effectively helping businesses like yours.

Shard Capital Partners LLP is a London-based independent financial services company. Asset management for businesses around the world is a key area of focus, in addition to the provision of other corporate finance and brokerage services.

Such a larger more established firm can be a good choice for broad depth of experience and expertise, while an individual consultant may have less access to insight and information, but would offer a more personal touch, or will maintain a more select client list.

Ask for case studies and references for businesses of a comparable size as yours that are operating in your sector. That will allow you to get a sense of whether the asset manager is experienced in the type of services you need. It can also be a good practice to interview prospective financial advisors on what they’d recommend for your situation – their answer can give you a sense of the type of approach and knowledge you can expect from them.

Company assets, whether tangible or investment-based, need to be managed effectively to protect your business’s on-going operational effectiveness, avoid unexpected losses, and take advantage of opportunities. Make the most of your potential with the help of an experienced financial advisor.

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