A Detailed Machinery List: An Important Part of an Operational Toolkit
“What is the big deal?” As parents, how often do you hear that question, especially from teenagers. In your mind, it’s a no-brainer, but to them it is unclear, not important and unnecessary. Let’s flip the tables. When your loan officer asks for your detailed machinery list ,is your answer, “Of course, here it is” or “I have a generic list but little detail, what’s the big deal?>” A generic list is one thing but a list with details is another. There are many benefits of having a detailed machinery list, (including make, model, age, hours or mileage, size, special features, technology enhancements etc.) on hand. A few situations are outlined below.
End of year Balance Sheets – No one likes to recreate the wheel nor do they like to head out in the winter to find their machinery under “fill-in-the-blank” feet of snow.
Financial Institutions – Financial institutions often request a machinery list when pledging as collateral to your loan package. Often times an appraiser in the organization will also take a look at those assets to provide a value opinion. Having the extra step of detail gives the appraiser a sense of condition and maintenance kept on your equipment.
Estate Planning – Thinking about or planning for the future can be a challenging topic to discuss. It can also be a stressful time. There are many tasks and difficult situations to navigate. Having an updated detailed machinery list checks off one more box on the to-do list.
Making Decisions – Whether that decision comes at end-of-year tax time or during the middle of the growing season, having an updated machinery list will give you a sense of where your equipment line stands relative to its condition and value. This can help with making better, more informed decisions.
Tragedy Strikes – Preparing for tragedy is not something anyone wants to do nor have to experience. Unfortunately, this is a time where that detailed updated list comes into play. A list on hand can take the pressure off a grieving family. It’s hard to recall details (age, date of purchase, hours/ mileage) during an emotional time like this. A detailed machinery list, updated at the end of year or every time a purchase, trade or sale happens; can relieve your family.
Taxes and Insurance – The simplest reason for keeping a detailed machinery list is for ease-of-use at tax time and with insurance companies.
The benefits are clear and now is the time for creating your own list. If your financial institution has done a chattel appraisal on your equipment, they will have a great starting point. Save your list on paper or an Excel spreadsheet. Track the changes to your equipment and update it when you’ve made a purchase, trade or sale.
Compeer Financial has a chattel appraisal department to help with those services. With an experienced team, we can help put together your list and provide valuation services to get you started.