Cookies on Knowhow Nonprofit

We use cookies in order for parts of Knowhow Nonprofit to work properly, and also to collect information about how you use the site. We use this information to improve the site and tailor our services to you. For more, see our page on privacy and data protection.

OK

Skip to content. | Skip to navigation

Community-made content which you can improve Case study from our community

Controls on physical assets

This page is free to all

Fixed assets

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:

  • the cost (or value) of each asset
  • date of purchase
  • enough identifying detail for you to be able to locate it at reasonable notice. 

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:

  • frequency of asset inspections.  For a lot of things this can be yearly, coinciding with your independent examination/audit, but you may have some higher risk assets you feel should be inspected more frequently
  • authorisation for replacements and disposals - and if you will allow disposals to staff
  • how to assess whether best use is being made of the assets (a Charity Commission requirement on trustees), for example checking that you haven’t got redundant furniture in one area that another team could make better use of. 

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.

Stock (including consumables)

There are four main types of stock that you might hold:

  • consumables – eg stationery and other things you use in the course of delivering your work
  • stock for resale
  • work in progress – unfinished goods for resale
  • raw materials and parts for use in production.

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:

  • security – keeping it safe from misuse (including benign misuse eg stockpiling)
  • stock control - making sure you’ve got the right amount of stock in the right place at the right time. 

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.

Insurance

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.

Templates

As an NCVO member you can download our financial procedures manual templates.

Page last edited Jan 03, 2018

Help us to improve this page – give us feedback.

1 star 2 stars 3 stars 4 stars 5 stars 2.8/5 from 246 ratings

Find out how-to…

How-tos are written by our users to share practical knowledge.

And if there isn't one already you can write it yourself, or request someone else write it.

See all how-tos