How To Maximize The Impact Of Fixed Assets In Financial Planning

By Gary Galstyan, Rockwell Capital Group Founder & CEO, Forbes Council Member

Originally written for Forbes Finance Council

From nimble startups to established, multigenerational enterprises, I’ve had the privilege of financially guiding a diverse array of businesses.

Across all these experiences, one pattern stands out: the often-overlooked importance of fixed assets in the broader landscape of financial planning. Whether they’re buildings, machinery, vehicles or IT infrastructure, fixed assets are not just static figures on a balance sheet. When managed with foresight, they can become essential tools that drive operational efficiency, tax advantages, liquidity and sustainable growth.

Over the years, I’ve seen the consequences of both undermanaging and overinvesting in fixed assets. Based on my experience helping businesses optimize their investments (from ensuring proper depreciation of vehicle fleets to avoiding overpayment on insurance), here’s my advice on how companies can save and scale.

1. View Fixed Assets Through A Strategic Lens

It can be tempting to categorize fixed assets solely as capital expenditures, but this mindset limits their potential.

For instance, some companies in the manufacturing space might be reluctant to invest in new equipment due to the initial outlay. But a life-cycle analysis that examines energy efficiency incentives and long-term maintenance savings might reveal that investing in new equipment could generate ROI in a year and a half or so, increase production efficiency and lower repair costs.

Think past the sticker price. Also think about the total cost of ownership (TCO). Factor in depreciation, upkeep, downtime and the eventual resale or salvage value.

2. Keep Your Fixed Asset Register Accurate And Updated

Many midsized organizations that I’ve worked with either don’t maintain or complete a fixed asset log or haven’t audited it in years. This often results in “ghost assets,” which are items that the company no longer uses but are still depreciated on paper, resulting in inflated expenses and tax liabilities.

For example, say a company has around half a million dollars’ worth of obsolete equipment that’s still being depreciated. By cleaning this up, the company can improve its tax profile and also clarify its real capital position, enabling better purchasing decisions.

I recommend using digital tagging systems and integrating asset tracking with your accounting software to maintain real-time accuracy.

3. Use Depreciation As A Financial Advantage

Depreciation is more than a line item. It’s a powerful tool for managing taxable income. Depreciation strategies that align with your business goals can help smooth tax obligations and enhance fiscal forecasting.

Recently, we advised a consulting firm that restructured into a hybrid work model. Their investment in tech and furnishings qualified for accelerated depreciation and bonus depreciation provisions. As a result, the firm gained a substantial one-year tax deduction and a stronger cash reserve.

Coordinate your capital expenditures with your CPA before year-end to capitalize on depreciation incentives.

4. Evaluate Asset Performance Regularly

Assets that fail to deliver a measurable return, or worse, incur recurring costs, should be reevaluated. Many firms, in my experience, hold onto underutilized or nonperforming assets due to past investments, rather than considering their future value.

A company that divests a loss-making asset, such as a property or machinery, can reinvest that money into a more profitable asset and boost its revenue.

It’s vital for companies to schedule routine asset performance evaluations using metrics like utilization rate, ROI and maintenance-to-value ratio.

5. Align Capital Budgets With Asset Life Cycles

Every asset has a useful life, and failing to plan for replacements can lead to costly downtime or last-minute, high-cost purchases. Proactive life-cycle management is crucial for preventing financial disruptions.

For example, my team and I helped a healthcare client implement a forward-looking capital budgeting system that replaced reactionary purchases with planned upgrades. This not only stabilized their operating budget but also gave them better negotiating power with suppliers.

Consider creating a long-term asset map and plan replacements at least one to two years in advance to support smoother cash flow and higher purchasing leverage.

Fixed Assets Shouldn’t Be Background Noise

In my career advising business leaders, I’ve found that fixed asset management is often where the art of financial planning meets precision. Organizations that integrate fixed assets into their financial playbook benefit from enhanced clarity, tax efficiency and a stronger capacity for long-term investment.

If there’s one message I’d like to emphasize, it’s this: Stop treating fixed assets as background noise. View them instead as strategic assets that, when managed intelligently, can play a central role in unlocking your company’s true potential.

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