Are Furniture and Fixtures Current Assets?
As business owner, one of your major concerns would fall in the area of understanding the different types and classifications of assets as well as how to leverage them to the utmost. If for example you own and run a cafe, restaurant, hotel, resort, holiday park, club, a function centre, an interior design company or any other business seeking a wide range of quality fixtures and furniture products; then a sound furniture investment plan is in order.
This brings us to the question, are furniture and fixtures current assets?
The quick answer is no.
And since you are asking this question, the presumption is that you are not really sure what is meant by the term “current assets.” Read on and I’ll walk you through learning what current assets and fixed assets are, and how you can maximise your budget and prolong the life and use of your furniture and fixtures.
What are Current Assets?
Current assets pertain to assets that you either own or have control over, which are capable of being converted into cash within a period of one year. Current assets are also known as liquid assets and include cash, inventory, tradable securities, accounts receivable, prepaid expenses and other cash equivalents.
The chief purpose of current assets is to serve as your working capital, funding operations and the day to day expenses of your business.
Furniture and fixtures on the other hand, fall under an entirely different category. They’re called fixed assets or long term assets, since they cannot with reasonable certainty be easily converted to cash within a period of one year.
What are Fixed Assets?
These are tangible or long term assets that include buildings, land, fixtures, equipment, vehicles, machinery and furniture.
As opposed to current assets, furniture and other kinds of fixed assets are not used for liquidation purposes to satisfy a debt, to pay wages or to aid day to day business operations financially.
Fixed assets are the “tools of the trade” and therefore play a vital role in the creation or delivery of products and services. These are physical, tangible assets that are likely or expected to remain throughout the lifespan of the company.
So now that you know furniture and fixtures are not current but fixed assets, here’s something important to consider.
How to Make the Most of Your Furniture Budget
If you’re in the market for hospitality furniture and fixtures, there are a variety of options you can take for the best possible return on your investment even with the smallest budget.
Brainstorm Your Needs
Consult with your associates, customers, employees and other stakeholders. Learn about their needs and expectations when it comes to the quality of the furniture, available space, comfort and overall usability. Once you have a clear idea of what you need, talk with a reputable hospitality furniture retailer about your requirements and budget. Ask them for suggestions and whether they can assist you in customising your hotel, restaurant, café or commercial space.
Get the Best You Can Afford
This may seem like a no-brainer but you’d be surprised to find many hospitality businesses gambling on cheap unknown furniture brands only to find they don’t last half as long as advertised. Cheap, low quality restaurant chairs, tables and furniture could end up costing you more in the long run, so beware. The wise thing to do is get high quality café furniture from a reputable dealer or source.
Plan for the Long Haul
Your choice in hospitality furniture speaks volumes about you, your business and your brand. Make sure to choose furniture items that offer maximum comfort not only for your customers, but your employees as well.
Extensive Range of Styles and Designs
One thing to understand in the restaurant, café, hotel or resort business is that customers can be very picky. This is particularly true when it comes to chairs, café stools and tables. Go with a company that offers an extensive selection of hospitality furniture to ensure that you are getting exactly what you need to meet your customers’ discriminating needs.
Work with a Dealer Who Can Help You Maximise Your budget
Nextrend, being one of Australia’s top importers of high quality hospitality furniture can work with you to best fulfil your business needs without overspending.
Inspired by our undying passion for service and quality, Nextrend strives to drive hospitality furniture solutions that exceed customer expectations. As a leading importer of restaurant, hotel and café chairs, tables, stools and exclusive hospitality furniture items, our commitment to helping our customers meet their furniture and fitout needs is rooted in our mission to make fitouts and upgrades easy for countless Australian businesses from hotels, bars, clubs, cafes, resorts and restaurants.
Work with Nextrend to create your unique custom made solution that will entice customers in your restaurant, café or hotel to keep coming back.
Call us today!