Nobody loves a fixed asset register. It's a list of things you already own, it changes slowly, and keeping it current feels like admin for its own sake. In most small businesses it was last touched the year the accountant insisted, and everyone involved quietly agrees not to bring it up again.
I want to tell you when it stops being boring.
Before I ran this practice, I was the financial manager at a manufacturing business with around a hundred staff. In 2020 that business was acquired by an international group, and I took it through the sale — which means I sat inside a due diligence, for months, while an acquirer's advisors worked backwards through years of our records looking for the things we'd missed.
Here's what that experience teaches you: every gap in your records becomes someone else's negotiating position.
What due diligence actually is
When someone buys a business, they don't take your word for what it's worth. They send in advisors — accountants, lawyers, sometimes engineers — whose entire job is to test whether the business you've described is the business that exists.
And the fixed asset register is one of the first places they look, because it's where the physical business and the paper business either match or don't.
The exercise is simple and brutal. They take your register and walk the floor. Everything on the list must exist. Everything of value on the floor should be on the list. Every material item wants an invoice behind it, a date, a cost, and a depreciation history that makes sense.
You'd be surprised how rarely all three survive contact.
The four ways registers fail
After enough years around this, the failures are predictable. Nearly every neglected register has at least two of these.
Ghost assets. Things on the register that no longer exist — sold, scrapped, stolen, or cannibalised for parts years ago, with nobody recording it. Your balance sheet claims value that isn't there. A buyer's advisors find these with a stock count and a highlighter, and every one erodes their trust in the rest of your numbers.
Invisible assets. The reverse: equipment standing on your floor that was never capitalised. Bought in a hurry, expensed to repairs, assembled in-house, or inherited in some long-forgotten deal. You own more than your books say — which sounds like a pleasant surprise until you realise you can't prove ownership, cost or history for the very machines that make the business money.
No paper. The asset exists, it's on the register, and nobody can produce the invoice. No proof of what it cost, when it arrived, or that you own it rather than lease it. For anything material, an advisor treats "we can't find the invoice" and "there is no invoice" as the same sentence.
Fiction depreciation. Depreciation run on autopilot for a decade — wrong useful lives, wrong rates, assets written down to nil that are mid-life, or carried at value while rusting behind the shed. The register becomes an accounting artefact with no relationship to the actual state of your equipment.
What it costs you at the table
Here's the part that matters. None of these problems stays a bookkeeping problem. Each one converts into one of three things, and all three come out of the seller's pocket.
A price reduction. The buyer's offer was built on your numbers. Show them a register they can't rely on and they don't sharpen their pencil — they discount defensively, assuming the worst about everything they can't verify. You don't get the benefit of the doubt in a due diligence. The doubt is the point.
A warranty. Where the records can't prove something, the buyer makes you promise it instead — personally, in the sale agreement, with your name on it. Warranties are how a seller keeps paying for a business years after selling it. The cleaner your records, the fewer promises you're forced to make.
Delay. Every query stops the clock while you dig through boxes for a 2014 invoice. Deals lose momentum, and deals that lose momentum have a way of losing buyers. Time kills transactions more often than price does.
And one more, closer to home: your fixed asset register drives the wear-and-tear allowances in your tax return. A register that's wrong isn't just a problem for a future sale — it means you're likely claiming the wrong deductions right now, in one direction or the other. One of those costs you money every year; the other is a problem when SARS looks.
"But I'm not selling"
The catch is that you don't get to choose when this matters.
An unsolicited offer arrives. A partner wants in, or out. The bank wants security for finance. A divorce, an estate, an insurance claim after the fire — every one of these events reprices your business off your records, and every one arrives on its own schedule, not yours.
Records can't be fixed retrospectively under pressure. A register rebuilt in the month before a sale looks exactly like what it is, and buyers' advisors have seen a hundred of them. The only version that holds up is the one that's been kept.
What a real one looks like
Not complicated. For every material asset: what it is, a serial number where it has one, what it cost, when you bought it, the invoice filed where you can find it, sensible depreciation, and a note when it's sold or scrapped. Reviewed once a year against what's physically there — which takes an afternoon, annually, versus weeks of it under deadline while a buyer waits.
That's the whole discipline. It's not hard. It's just never urgent — until the one day it's the most urgent thing in the business.
Where to start
If your register hasn't been looked at in years, start with the walk. List what's actually on your floor, then compare it to what your books say. The gap between those two lists is your problem, sized.
It's also precisely the kind of work we do — quietly, as part of monthly bookkeeping, so that the register is simply always right and there's never a project to face. It feeds your annual financial statements and your tax return, and one day, when someone's advisors walk your floor with your register in hand, it will be the most valuable boring document you own.
I've watched that day from the inside. The sellers who did the admin got paid for it.
Dewald Theron is a Professional Accountant (SA) and runs The Tax Shop Accountants in Riebeek Kasteel. Before practice, he was financial manager of a manufacturing business through its acquisition by an international group.