Repair and Maintenance: What’s the Difference?

If you’re working with expensive assets, keeping them running to continue production is crucial to your company’s success. That’s why understanding the differences between repair and maintenance is critical to smooth operation with minimal unplanned downtime. 

Repair and maintenance are different concepts with the same end goal — to enable a business to get the most out of its assets. In short, repairs involve fixing broken or malfunctioning assets, while maintenance is a preventive maintenance action to keep equipment in tip-top shape, so breakdowns are fewer and productivity continues. Let’s take a deeper dive into both, so you know how they can benefit your organization. 

What Are Repairs? 

When an asset breaks, is damaged or stops working, repairs restore the asset to working order. Maintenance is an action taken on a still-working asset — it is a preventive repair that takes place to manage upkeep and prevent a breakdown, and it prolongs the asset’s life expectancy. When maintenance teams are faced with equipment failures, there are two levels of repairs that a technician will carry out, depending on the level of failure that piece of equipment suffers. 

• Partial failure: This occurs when an asset is still working but at less than full capacity and with potential safety hazards. Repairing the asset at this stage can get it up and running at full capacity before the identified problem leads to complete failure.
• Complete failure: This occurs when an asset has completely broken down or malfunctioned and cannot be used again until repairs are performed. 

Examples of Repairs 

Let’s take a look at some facility repair examples to see how they’re carried out. Each of these assets contributes to the safety, comfort and functionality of a facility when they are in good working order. 

• Replacing a broken window: Broken windows compromise a facility’s security and energy efficiency. To repair a broken window, the old glass is removed, the window frame is cleaned, and the area where the old glass was is measured. Then, a replacement pane is purchased. Once the new pane arrives, the frame is sealed with caulk, and the new window is installed. The repair has not only restored the window’s function but also improved the home’s insulation and appearance.
• Fixing a leaking roof: If not addressed promptly, roof leaks can lead to significant water damage. To repair a leak in a shingled roof, the property owner or service professional will first find its source. Once located, they will replace any damaged shingles by lifting the surrounding shingles and removing the nails holding the faulty asset. They’ll slide a new one into place and secure it with roofing nails. Properly fixing a broken shingle prevents water damage and extends the roof’s lifespan.
• Repairing electrical wiring: Faulty electrical wiring poses a serious safety hazard for a property and can sometimes involve major repairs. Before starting repairs, the maintenance technician will turn off the power at the circuit breaker, identify the damaged section of wiring and replace it with new wire and any additional coverings or fixtures before restoring power to test the repair. 

What Is Maintenance? 

Asset maintenance is the action that ensures an organization’s assets are kept in good working order without affecting operations as much as possible. The varying types of maintenance strategies include: 

• Reactive maintenance: This kind of maintenance work is done when a maintenance department addresses problems as they arise. An asset that is not performing at full capacity or failing will prompt a diagnosis, leading to its eventual repair to get it back in operating condition.
• Preventive maintenance: This is a type of proactive maintenance that allows maintenance technicians to increase asset uptime and maximize productivity by performing maintenance activities according to a fixed preventive maintenance schedule.
• Predictive maintenance: This kind of maintenance program relies on maintenance technology and condition monitoring to diagnose an issue. For example, a device sensor will show if an asset is underperforming in real-time by alerting a computer maintenance management system (CMMS), which, in turn, brings the issue to a technician’s attention.

Examples of Maintenance 

Maintenance is essential for the efficient operation and longevity of an asset. Incorporating each of these maintenance tasks into a regular maintenance operations schedule also helps prevent costly breakdowns and extends the equipment’s lifespan. Here are three examples of equipment maintenance: 

• Routine maintenance inspections and cleaning of components: Regularly inspecting and cleaning a machine’s parts, like say HVAC equipment or even an air-conditioning unit, helps prevent breakdowns. This can involve periodically checking for wear and tear and loose parts while cleaning filters, fans and surfaces to remove dust and debris. These tasks help identify and address problems before they start. 
• Applying lubricants to moving parts: Lubrication reduces friction and wear on moving parts like bearings, gears and chains as well as enhances machinery performance and increases the lifecycle of components, leading to fewer breakdowns and repairs overall. Regularly applying the appropriate lubricants also prevents overheating.
• Adjusting settings and calibrating sensors: For a machine’s optimal operation, adjusting settings and calibrating sensors might be periodically required. This involves comparing sensor readings against standard measurements and making necessary adjustments. Regularly checking and adjusting parameters like temperature, pressure and speed keeps a machine running efficiently and safely with fewer breakdowns during its lifespan. Calibration maintains machine precision, helps prevent production errors and ensures the quality and consistency of an asset’s output.

Understanding the Repair and Maintenance Tax Implications 

Businesses can benefit from tax deductions when they incur expenses for routine repairs and maintenance. These activities are considered a business expense that’s necessary to keep the asset in its normal working condition. Associated maintenance costs can be deducted in the year they are incurred.

However, the Internal Revenue Service (IRS) also requires businesses to capitalize on some costs associated with significant overhaul improvements. Instead of deducting these expenses in the year they occur, a business must spread the cost over the useful life of the asset through depreciation. This capitalization process delays the tax benefits but can ultimately be more cost-effective by reducing taxable income over several years.

So, how do you know which expenses you can write off in the same year? The IRS has a regulation called “safe harbor” that allows a business to fully deduct some expenses if it meets specific requirements as laid out by the “BRA Test” (Betterment, Restoration and Adaptation). 

If a repair or maintenance expense makes equipment better than it was, restores it to its original condition or adapts it for a different or new use, a company must capitalize that expense. If it does not fall into these specific categories, a company expends the full amount in the same year if it does not exceed the financial thresholds as required by the IRS.