Setting up fixed assets allows your accounting department to be able to create entities for assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment.
Security Permission for Fixed Asset Tab
- From any module, click the user icon in the upper right of the screen. This will open a menu.
- Choose the Settings option. This will open the settings screen.
- Select the Security Management tab. This will show a list of security users.
- Optionally, you may click the Groups button in the upper left to make changes for groups of users.
- Double-click over the user or group you wish to edit. This will open the user or group properties window.
- Click the Permissions button to open the security permissions window.
- Choose the CRM option from the list on the left side of the window.
- Check the [VIEW TAB] Fixed Asset Tab permission.
- Click the Save button in the lower right.
Create Fixed Asset
- Select the Add New Entity quick link option. This will open a screen where you can enter information about the fixed asset.
- Entering the information here allows the program to search the entities that already exist and help minimize duplication.
- Select the Create New button to open a new profile. It will carry across the information that you entered on this screen and open the new entity record. If the entity already exists, you may click over the name in the list shown, then choose to open the record.
The entity number is automatically generated and unique. This can be changed if you are entering a company, supplier or bank if you want. The company number or location is generated based on the location that the user is logged into when adding the customer.
- Choose the Fixed Asset tab.
- Enter the entity number for who the asset was Purchased From. Alternatively, you may click the magnifying glass to search for the entity.
- Optionally, you may enter a Contract Number for the asset.
- Optionally, you may enter a PO Number for the asset.
- Optionally, you may assign a Department to the asset. This will populate to the recurring transactions.
- Enter the Accumulated Depreciation GL Account. Alternatively, you may click the magnifying glass to search for the fixed asset (FA) GL account.
- Enter the Expense Depreciation GL Account. Alternatively, you may click the magnifying glass to search for the expense (EX) GL account.
- Enter the asset Purchase Date.
- Enter the asset's Original Purchase Value.
- Enter a number into the Total Useful Months field. This sets the asset's lifespan for the depreciation type selected below.
- Enter the asset's Salvage Value.
- Enter the Starting Depreciation Date. This is the date that depreciation will begin.
- Enter the Starting Depreciation Value. This is usually the same as the purchase value.
- Select the Depreciation Type.
- Straight Line – is the most commonly used and straightforward depreciation method for allocating the cost of a capital asset. It is calculated by simply dividing the cost of an asset less its salvage value by the useful life of the asset.
- Declining Balance - is an accelerated depreciation system of recording larger depreciation expenses during the earlier years of an asset's useful life and recording smaller depreciation expenses during the asset's later years. The formula for calculating in this method is, Depreciation for a period = 2 * straight-line depreciation percent * book value at the beginning of the period.
- Select the depreciation frequency in the Monthly/Yearly dropdown box.
- For each year of the asset's lifespan, enter the Year Percentage Rate deduction. This is used with the lifespan and original value to create recurring entries in the correct amounts per year.
- Check the Fixed Asset Checkbox.
- Click the Create Recurring Entries button at the bottom of the CRM fixed asset tab. This will create the recurring accounting transactions.
View Recurring Entries for Fixed Asset Depreciation
- Open the accounting module.
- Choose the Recurring Journal Entry option in the General Ledger Tools menu on the left side of the screen. This will open the Recurring Journal Entry window.
- Locate one of the recurring transactions in the list on the left side of the window and click to highlight. This will show the selected transaction on the right side of the screen.
Each of these transactions will contain lines to credit the Accumulated Depreciation GL Account and debit the Expense Depreciation GL Account.