Office equipment and supplies are a necessary part of any office, but they can also be confusing. It’s important to understand how to properly classify office supplies and equipment so you can make good financial decisions about them.
Whether or not an item should be classified as a business expense depends on its materiality. An expense is considered to be material if it represents more than 5% of your total assets. In this case, you may choose to record it as an asset and depreciate it over time.
An example of an asset is a copier. The IRS allows you to expense the purchase of a new copier when it is less than $2,500. Alternatively, you can classify it as an asset and depreciate the cost over three years.
Another example is a computer. You can purchase a desktop or laptop computer and other electronic devices that you use in your office. You can also buy office furniture and fixtures.
8.6 Computers and related systems: Care for the system, including safeguarding confidential files and making backup copies on a regular basis. It is also important to prevent system contamination and keep the computer in a well-ventilated location.
It is essential to know as much as you can about the equipment and software needed to function. Ask about the advantages of each product and compare the features, prices, and warranties. You should also consider your practice’s needs and future plans before you decide what equipment to purchase.
8.5 Incidental and periodic supplies: These are those supplies that are needed in the office but do not threaten its efficiency if they run out. They do not require reordering on a regular basis like appointment books or other office supplies that are used only occasionally. They are usually stored in cabinets and are not displayed publicly.
9.7 Maintaining records: Inventory cards and record pages are essential for tracking office supplies and keeping track of how often they are reordered. These can be a 4-by-6-inch index card, a page in a loose-leaf binder, or a spreadsheet stored on the computer.
10.2 Purchasing supplies: Always try to purchase your office supplies from a reputable vendor. Reputable vendors will fulfill orders accurately with quality items, deliver products in good condition, and charge fair prices. Be sure to check the firm’s name with the Better Business Bureau before placing an order.
