Computer aided facilities management system

Computer aided facilities management systems hold the asset register, and the register's real purpose is to answer a financial question rather than an inventory one: what should we be putting aside every year. Enter the replacement value of the asset base, its average expected life, its average age today, and what you currently set aside, and this sheet returns the annual sinking fund the base needs, the shortfall against what you actually save, the average life remaining, the share of the base's life already consumed, the replacement value falling due within five years, and the share of the annual need your fund covers. On the worked example, $2.4m of assets over a 15 year life needs $160,000 a year; setting aside $90,000 covers 56% of it and leaves a $70,000 annual gap. The base is nine years into fifteen, so 60% of its life is used and $800,000 of replacement falls due within five years.

The gap compounds quietly

$70,000 a year of shortfall on the worked example is $350,000 over five years, arriving at exactly the moment $800,000 of replacement falls due. Neither number is alarming on its own, and together they are the whole argument for raising the fund now.

Average life is a blunt instrument, and still useful

A boiler and a door closer do not share a life, and a single average will be wrong for both. It is still the right starting figure for a small estate, and the sheet is quick enough to run again per asset class once the register is good enough to support it.

Life consumed is the number that persuades

60% of the asset base's life used is easier to act on than a depreciation schedule, because it says plainly how much of the estate's useful life has already been spent while the fund was covering just over half of what it should.