The beginning of the year could be considered akin to the back-to-school feeling for grownups. What used to be excitement over new pencils, pens, book bags, and binders is now translated into anticipation of a printer that won’t jam as frequently, or a copier that scans to email. These fixed assets are an important investment for any company.
Fortunately, Sage FAS (formerly Sage FAS Fixed Asset Software) helps you track and manage all the fixed assets in your office, plant, or warehouse. Your office equipment can represent a sizable percentage of fixed assets as reflected on your Sage FAS tally.
So, before you start investing in new office equipment, let’s look at a few important questions you should ask that will keep you from making costly mistakes.
3 Questions to Determine Whether or Not You Need New Equipment
- Will new equipment provide greater benefits?
Before buying any new equipment, ask yourself what benefits it will provide. Some benefits are clear: if you’ve added a second warehouse, you will probably need another forklift, as well as a computer station and copier for the new building. Most of what you have in your current warehouse will need to be replicated in your second location.
But, other equipment benefits aren’t quite as obvious. Your current copier might be working, but frequent paper jams have been cutting into productivity. Buying a new copier that experiences less downtime could improve your workflow. Use a pro/con list or cost-benefit analysis to help you decide the best course of action for that portion of your budget.
New equipment can have multiple benefits, such as improved speed, enhanced workflow, additional product introductions, cost savings, and time savings. You’ll need to decide which of these is most important to your organization. This will help you decide whether or not a new purchase is the right move.
- Do you know the complete cost?
When it comes to cost, it’s not just the cost of the new equipment that matters. Other costs include the cost of maintenance, supplies, and other factors that go into the running or maintenance of each piece of equipment.
For example, consider the cost of two specialty label printers. Printer A costs more to purchase, but Printer B’s paper and ink cost much more. Which is the bargain? It depends on how frequently you will use it. Over time, higher printing volume will make Printer A the cheaper printer due to the lower cost of ink and paper. You’ll get more labels for the money than you do with Printer B.
Sage FAS can help you weigh both the fixed and the variable costs of the new equipment purchase. Looking at historical data about depreciation values, usage rates, and more, you can determine the true costs of obtaining new equipment.
- How should new equipment be acquired?
You can buy new equipment outright, lease it, or lease to own, depending upon the equipment. Consider the tax rate arbitrage, business entity type, and the types of leases available for the equipment. Your company accountant can help you determine the best arrangement to get the items you need while still supporting the financial health of your business.
ASI and Sage FAS
Sage FAS offers data you can count on. Manage the entire fixed asset lifecycle, prepare for year-end financials, calculate depreciation, and more. Conduct physical inventories of your fixed assets and plan with capital budgeting. Custom reports make it a breeze to find the information that you need for all your fixed asset management needs, whether forecasting and planning for the marketplace or picking the best printer for your main office.
Buying new equipment for an office takes time and intention. Knowing upfront what the benefits and drawbacks are of a large purchase, you can maximize the benefits and minimize the disruption to your workflow and your budget.
Whether you’re looking to implement Sage FAS for the first time, or you already have it and want to maximize its effectiveness for your internal and external fixed assets, count on Accounting Systems Incorporated to help your company improve your bottom line. With offices across the country, ASI offers national reach with a local touch. Contact us today or call 803-252-6154 to get started.