Things that you spend a significant amount of money on and which last for more than 12 months are referred to as fixed assets, and the money spent on them is often referred to as ‘capital expenditure’ (as opposed to the day-to-day ‘revenue expenditure’), and people talk about assets being ‘capitalised’.
In order to protect valuable assets you need to keep track of what you own and where it is, setting up a fixed asset register with details of:
This also has a practical application for insurance purposes.
Organisations usually set a threshold below which it is not worth maintaining these records, and you can decide on the practical level for your organisation.
You also need to decide on:
If your annual accounts are receipts and payments accounts, you do not have to worry about depreciation.
If your accounts are accruals accounts, you will also have to make decisions about the useful life of different classes of assets. You can choose classifications that are specific to your organisation rather than the standard ones in the template.
There are four main types of stock that you might hold:
And depending on the value of each of these, you will need to develop a proportionate stock policy and stock control system (which for a very small organisation might just be a locked stationery cupboard with a shopping list stuck to the door).
The key practical issues for stock are:
NI Business Info’s straightforward stock control and inventory guide takes you through the questions you need to ask to create the right system for your organisation.
If stock is a significant expense to your organisation, it is a good idea to include the principles of your system in this document.
Part of managing your resources responsibly is maintaining proper insurance cover.
You are obliged by law to provide certain types of insurance, such as employers’ liability insurance or motor insurance (if relevant). The Charity Commission Guide Charities and Insurance (CC49) works through these obligations and other types of insurance you might want to take out like public liability insurance, events insurance, or professional indemnity insurance.
As is frequently stressed in the literature, insurance is not a replacement for effective risk management, but it does provide an important backstop.
You might want to list the main types of insurance cover you expect to have in your policy, for the sake of clarity.
Last reviewed: 03 January 2018
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