Wealth management: what it is and how to do it in the company

Wealth management

Talking about the resources of a person or company is also talking about their assets and looking at a part that directly relates to their assets, rights and obligations. Therefore, this is a very important aspect, since, in theory, it addresses the allocation of financial resources and, consequently, the way in which they are managed.

In this sense, it is even one of the responsibilities of managerial sectors, even having a specific name: wealth management. Taking care of this area is not a simple process, as it requires a series of activities that range from evaluating assets to taking an inventory.

So that you understand what we are talking about, in this text, we will explain what wealth management is and how it works. Understand by John Labunski!

What is wealth management?

It is about the administration of resources related to the patrimony. However, to understand better, it is necessary to know what exactly the word “heritage” means. This term encompasses three elements:

  • goods: everything that has a monetary value, that is, that can be converted into money;
  • rights: it is related to commercial transactions, more specifically the resources it receives due to these operations;

Obligations: are the values ​​that the company or person assumes, such as debts, loans, taxes, wages, etc.

Therefore, when we think of wealth management, we are referring to the control of these three points. In this sense, the movements, the level of asset value, what are the necessary investments, among others, are analyzed in the balance sheet.

In addition, it also involves what we call qualitative and quantitative aspects. The first addresses the origin of goods, rights and obligations, while the second seeks to give a value to these resources. For example, the qualitative aspect can mean the question “What does the company have in terms of assets, rights and obligations?”. The quantitative has to do with the value of the business obligations.

How to apply it in the company?

As we have seen, wealth management has a direct relationship with many of the financial resources of the business. This activity consists of a very large capacity to control, but also to follow movements in detail. However, this cannot be done in any way, as there are a few steps. Next, we’ll show you what they are. Continues!

Take an inventory

This is the first part of wealth management. It is the list and description of all the assets of the person or company. It is with the inventory that it is possible to have a more accurate view of them, mainly so that this information is used in the Balance Sheet, in addition to knowing if it is necessary to make more investments.

It is interesting that, in order to facilitate the generation of the inventory, plates, cards or stickers are placed on the items, in addition to photographs for recording and describing the objectives. Know that every time you buy an item or change its location, you need to update your inventory.

Evaluate the assets

During the process, it will be possible to evaluate the company’s assets and liabilities more carefully. It is a good time to classify them according to their characteristics, that is, whether they are current or not. Basically, the first are the amounts that are available in cash or kept in financial institutions, in addition to what is to be received.

On the other hand, non-current assets are those permanent assets that are linked to the operation of the company. They can also be classified as long-term realizable assets — similar to current assets, but availability has a longer term than the balance sheet of the business.

Non-current assets are also classified as investments, property, plant and equipment and intangible assets. The first is intended for participations and financial investments with the objective of improving the business. The second are less liquid assets that have a tangible form, that is, they are real, such as machines, buildings, vehicles, etc. Finally, intangibles are goods that do not have a physical form, but have economic value, such as patents.

Analyze shelf life

This is an important step, as the useful life of the company’s assets will be evaluated. As with the valuation of assets, there is a classification of each asset according to its level of usefulness for the business. Therefore, it is labeled in:

  • economic useful life: the actual time the company expects to use the asset;
  • Elapsed Life: The period in which the asset has already been used.
  • update values

Taking the inventory is not a permanent process — updates will still need to be made, especially as asset valuations provide more accurate data. In this process, the comparison is made by crossing the information from the accounting record with the physical inventory.

It is at this stage that assets that do not have a physical existence will be accounted for, as well as those that are not recorded in the accounting basis. Three reports are generated: accounting surpluses, physical surpluses and reconciled assets.

Take the Impairment Test

This is a test with the objective of assuring that the amount recorded in the accounting basis of an item is recovered according to its marketability. Basically, it is a way of proving that that good can be converted into cash, either by marketing or using it.

How does collection management enable better wealth management?

Throughout this text, we have seen that asset management takes care of two important points for a business: assets and liabilities. Especially when it comes to liabilities, that is, what the company will receive, it is common for there to be some values ​​that are stopped. This is because they are linked to some debt.

At this point, collection management can make a big difference, not only helping to monitor these amounts, but also ensuring that these debts are paid off. It will provide accurate information for carrying out the inventory, helping the administration to cross-reference the data and have a more accurate asset management.

Therefore, it is essential to hire a company to manage collections efficiently with registration and control tools, in addition to professionals who will contact the respective delinquent customers.

If you are looking for a company to help you with this collection process, we invite you to get to know John Labunski Dallas. Talk to one of our attendants now!

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