An Asset Register is an important part of a not-for-profit’s financial records.
It’s used to record the details of all the fixed assets that your organisation owns or leases. This can include assets you bought new, second hand or were given. The types of assets you might include are:
So by fixed assets I mean assets that you use in your organisation over the longer term to produce income, but not assets that you would sell as part of your day to day operations (eg inventory).
A simple Asset Register may look as follows:
Include all costs incurred in making the asset usable – for example installation costs, computer cabling and delivery/transportation.
Your accounting software may have a feature that enables you to enter these asset details, or you can draw up a simple spreadsheet using Excel.
An up to date Asset Register will help with depreciation, insurance, statutory obligations and assist with decision-making in regard to further investment in assets. Furthermore, an auditor may request to see your Asset Register as part of your annual audit.
Spreadsheets have their place in business, and I enjoy the satisfaction that comes with creating a customised spreadsheet that is easy to use and looks good too.
However, accounting software can be purchased relatively cheap and businesses can choose the level of bells and whistles that they need, depending on the type and size of the business (or non-profit organisation) they are running.
Below are some of the advantages of using accounting software.
Save time. One entry in your software replaces several manual bookkeeping entries.
Real-time financial statements at the click of a button.
Information can be shared with your bookkeeper or accountant without physically having to let go of your business records.
BAS preparation (for Australian businesses) is faster and, if set up correctly, there is less chance of the errors that can occur when transferring figures with pen and paper.
Transactions that occur regularly can be automated.
Fast and accurate tracking of inventory.
Back-ups of data can be safely stored in the cloud or taken off-site. What would happen to your paper-based business records if there was a fire in your office?
If you are just starting out and are starting small, then spreadsheets may do the job for you in the beginning. If you do choose to use accounting software you will still need a bookkeeper or software consultant to help you along the way at some stage, however a lot of the day to day transactions are well within the scope of the average small business owner. Also, if you choose to hire a bookkeeper in Australia, don’t forget that they must be a registered BAS Agent if they are preparing or lodging your BAS for a fee.
A few of the more popular software companies provide free or low cost trial versions, so don’t be afraid to get in and have a go. I wrote about my experience with trialing accounting software in my post Trying Accounting Software for Free. You can also try a quick internet search for “Free Accounting Software Trial”.
If you have gone from keeping manual bookkeeping records to using accounting software, how did you go? Do you have any tips you can give other small business owners or non-profit organisations?
Thanks for your support throughout the past year. I’m looking forward to providing more information and insight into not-for-profit and small business bookkeeping in 2016. Hope you can come along for the ride.
As a small business owner or non-profit are you contemplating moving your accounting software to the cloud, or thinking of changing which product you use?
This is a really great round-up of significant improvements and changes in cloud accounting software throughout 2015, as well as some insights into where accounting software may be headed in 2016. Margaret of Cloud Accounting Buzz knows her stuff when it comes to accounting software, so I hope you might be able to get something out of this post. Enjoy!
Have been using cloud computing to do non-profit bookkeeping for a while, so I thought this was a great article. In particular, being able to access information anywhere, anytime is a great bonus for non-profits. For example, with cloud based accounting software your bookkeeper and Treasurer can both access the business books whilst one is in the office and the other is at home.
Have been looking over the latest figures provided by the ACNC in relation to registered charities in Australia.
1,045,676 employed staff
1,806,495 estimated volunteers
Total income $101.9 billion
Our small charities in Australia rely more on donations and bequests, receiving 32% of their income from those sources, compared to the largest charities which receive only 2% of their income from donations and bequests. That’s a big difference.
Smaller charities are receiving 2% of their income from government grants, compared to 44% for the largest charities.
What I also thought was interesting was that the smaller charities are spending 10% of their funds on employee expenses, compared to the largest charities spending 57% on employee expenses.
What do you think of these latest figures? Do you work or volunteer for a registered charity? Do these figures surprise you?
I was reading back over my previous blog posts and thought this particular one may be helpful to the small business owners and non-profits that follow my blog. It covers some key bookkeeping concepts that can easily be overlooked and can cause some real headaches if not picked up.