Equipment Appraisal Blog | Understanding Machinery Appraisals

When your medical practice is doing well, it can be tempting to upgrade your machinery or open a new location. But how do you know if that move will be a good investment or a bad risk? Medical equipment appraisal can provide you with the information you need about some of your practice's most expensive assets to help you make an educated decision on these types of issues. Here's more information on how it does this.

How Medical Equipment Appraisal Helps Support Your Bottom Line

How much is your medical equipment worth? You might be surprised just how far that number can vary. When you've got an equipment sales rep in the office, they may say that it's worth very little, especially compared to their latest model. On the other hand, they may say it's worth a great deal, especially when they're willing to accept it as a trade in on the same latest model. Neither number is necessarily an accurate assessment of the machinery's worth.

Looking at what similar models have sold for may not give you a good picture either. How well were those machines cared for? Was the industry in a strong or weak cycle when they were sold? Is there demand for that equipment in the industry because of new techniques or practices? There are a number of different factors that can impact your equipment's value. Working with someone who understands these different factors can make all the difference in determining your equipment's actual value.

Imagine if you had a piece of equipment that had been ill maintained over the years or had been damaged in a flood or fire. It still operates, but not as well as it should, or it's probably going to have a shorter useable lifespan than expected. What happens when you use a standard depreciation table in a tax document to depreciate value? The depreciated value will be stretched out over a longer period of time than the machinery will remain in usable condition. This means it remains on your books as an asset even when it actually has no reasonable value.

Another piece of equipment could be very well maintained. It's always had proper maintenance and has been used within its specified parameters, ensuring that it's in excellent conditions. It can deliver productive results for your practice years after it's been fully depreciated. That means it has no value in your balance sheet, but provides real value to your practice on a daily basis. The first machine creates false value, while the second isn't recognized for the value it delivers. This can create inaccuracies in your balance sheet and make it difficult to make smart financial decisions based on your practice's asset worth.

By getting a medical equipment appraisal, you can ensure that you have a much better idea of where your practice sits financially. With this information in hand, you can make smarter decisions on new investments, whether it's to open up a new location or upgrade your assets to allow for further services for your patients. However, if you're not working with a certified equipment appraiser, you may be getting bad information. Certified appraisers follow accepted practices to ensure they provide you with accurate values for your medical equipment.

When you work in health care, it can seem as though every week brings a new piece of equipment to your attention. Whether it's a new diagnostic tool, new therapy machine or something specific to your specialty, there's one thing that is almost always true: it's too expensive. But what if you could leverage the value of your older medical equipment against that total? As new technology is adopted, there's a limited window of opportunity between the time that the new equipment hits the market and the older technology becomes obsolete. How do you know when it's the perfect time to act and get the most from your older equipment while not paying the inflated cost of the latest and greatest? Medical equipment appraisal.

Update your practice with a medical equipment appraisal

When you talk to a medical equipment company, they may tell you that your equipment isn't worth much and that you need to upgrade immediately to take advantage of new technology. However, look at it from their point of view. They want to sell you new equipment and move your old equipment as quickly as possible. Without even looking that closely at what features your equipment may have or kits that have been added to the system, they're going to give you a low ball price on your old equipment to get it out of the way for the new equipment they want to sell you.

An independent machine appraisal specialist, on the other hand, has nothing to gain from the sale or purchase of equipment in your business. They don't have a commission riding on the final price. Their job is to take a good hard look at your equipment and use a solid methodology to determine your equipment values. They may even know about alternative markets where you could get better money for your equipment than the local businesses, such as going through the export process to sell older equipment to overseas buyers who will pay a premium to get good used equipment that's actually from this century.

There's one other thing that a professional machine appraiser will look at as well. Where is the equipment located? Though it's pretty easy for someone to say what the machine is worth, they may not take into consideration that moving it will require taking out that new partition wall because the other doorways in the practice are too small for it to pass through. In any situation, a qualified appraiser will mention these potential issues.

As you can see, getting a quality medical equipment appraisal helps ensure that you can get the most out of your older machinery while ensuring you can afford the cost to adopt new technology in your office. But before you go with just anyone, make sure the equipment appraiser is certified. Why? Certified equipment appraisers have been trained in standardized methodologies that will hold up to strong scrutiny, whether it's with an insurance company, financial firm or even in a court of law.

When you're running a medical office, your equipment can be your biggest investment in terms of assets. But are you protecting those assets? If your business suffered a loss, would your insurance be sufficient to cover the cost of replacing that equipment Let's take a look at how having a medical equipment appraisal performed helps protect your business' bottom line.

Document the Original Equipment Values

A machinery and equipment appraisal provides more than just a dollar figure for your equipment, it documents the current value of your machinery. A machine appraiser provides legal documentation that holds up in legal, insurance and financial circles, provided that you're using a certified equipment appraiser to perform the equipment appraisals. It also gives you an idea of replacement cost and the expected remaining life of your machinery, making it much easier to plan for expensive replacements instead of being caught completely unaware when something breaks down.

Ensure You Have Sufficient Insurance

A medical equipment appraisal also helps you get a better idea of how well your assets are covered in case of a loss. If you're using the original purchase prices to determine the levels of your insurance coverage, you may be paying too much for your insurance because it's over insured. If, on the other hand, you're using depreciation values off your last tax return, you may be underestimating your machine's value in your insurance policy because the functional machine will still cost money to replace with a comparable machine. Knowing the value of your machinery through a report from qualified and certified equipment appraisers helps ensure you have the proper level of protection when it's needed most.

Provide Accurate Depreciation Equipment Value

Another area where a medical equipment appraisal can come in handy is to determine the appropriate level of depreciation when you're developing financial reports or need documentation for tax purposes. Because a machinery valuation provides legal documentation for your equipment's value, it can be used when machinery is depreciating faster, slower or at an uneven rate than the average straight line depreciation schedule. It also provides the equipment value beyond the point that it has been completely depreciated, documenting the existing asset value after depreciation is complete.

Gives You an Accurate Picture of Your Practice's Financial Standing

These areas all tie together in a machine appraisal that helps give you an accurate picture of where your firm really stands financially. Instead of making an investment that could be risky or having problems getting a loan because your equipment is fully depreciated, a medical equipment appraisal helps provide a solid picture of your financial state, allowing you to make much better business decisions that grow your practice instead of putting it at risk.

Have you had a medical equipment appraisal performed recently on your practice's equipment? If you haven't, maybe it's time to consider taking that step. At Equipment Appraisal Service, our highly-qualified, certified equipment appraisers are ready to help meet your appraisal needs. Please contact us with any questions, to get more information or to schedule your medical office equipment appraisal.