How do we Set up a Fixed Assets list in QuickBooks? Well before that let us first understand the need and importance of doing so. As we know that QB software is one of the most preferred choices for the management of payments, expenses, and invoices, hence has grown to become one of the most important parts of Book Keeping process. However, various aspects can get quite tough once you have to track the purchasing of tangible assets. So, how do you fix the assets list in the QB? Well, here are the steps to do so:
THE FIXED ASSET IN QUICKBOOK ONLINE
First, we need to understand what a fixed asset is all about. Essentially this is the physical asset that cannot be converted into cash immediately. This is also considered to be a company resource that is also used on business operations, to garner income, much unlike the portions of the inventory for reselling.
Hence, the cost of these assets must be recorded in a separate balance sheet instead of an expense on the income statement. This is because these need to be used again and again over multiple periods. However, the Fixed assets are recorded in PPE: Property, Plant, and Equipment.
Another important aspect of these assets is that they are subjected to wear and time that occurs with time. This can lead to a decrease in its value over time. This is the common word for depreciation. This is the reason for the transfer of the capitalized cost’s portion on the balance sheet over to the expense on the income statement.
Some of the common examples of fixed assets include:
- Real estate
- Office Equipment
It is important to record the fixed asset as it allows the user to monitor depreciation and mileage, the location of the equipment, serial number, and warranty information. While fixed assets are generally important, nevertheless, these are the most often, overlooked aspects of tracking your finances, managing expenses, also filling tax reports at the end of the reporting period.
Steps to Add A Fixed Asset Item in QuickBooks
Below are the steps one needs to follow to add the fixed asset item to the QuickBook:
- TO OPEN THE FIXED ASSET ITEM LIST
For this, you will need to click on LIST> FIXED ASSET ITEM LIST
- ADDITION OF THE NEW ITEM
Locate the ITEM option on the lower left side of the list. You will get a pop-up menu, from this select NEW. Now, fill in the ASSET NAME/ NUMBER FIELD
- SELECT ACCOUNT
Go to the ASSETS ACCOUNT drop-down and select the fixed asset account you will be used to track the ASSETS VALUE. In case you do not locate the same, you can create it by entering the new account name and clicking on ENTER.
- INPUT PURCHASE INFORMATION
Go to the Purchase information section, add the purchase terms, and state in case the item is a new one or a used one with the click of a button. You need to pick a date of the purchase of the asset and enter it in the DATE field input. Likewise, you can also identify the vendor if need be.
- To FILL IN THE INFORMATION OF THE ASSET
Go to the ASSET INFORMATION section and describe the item in the Asset description box, or the Note Section. This is where you specify the fixed asset location, the purchase order, and also the serial number along with the warranty expiration date.
- SAVE AND CLOSE
Locate the OK option at the bottom and SAVE and CLOSE the NEW ITEM WINDOW. In case you need to add any other item you can do so by clicking on NEXT.
- TO CREATE A FIXED ASSET ACCOUNT
In case you need to create a fixed asset account, you can do so by following the steps below:
- Go to the SETTINGS, Click on CHART OF ACCOUNTS
- Select NEW
- You will get an ACCOUNT TYPE drop-down, here select FIXED ASSET or OTHER ASSET
- Now go to the DETAIL TYPE drop-down list, and select the option most suited for you.
- Here you need to input the ACCOUNTS NAME and click on the TRACK DEPRECIATION OF THE ASSET in the checkbox.
- Go to the ORIGINAL COST field and enter the starting value that your asset possesses. Do the same for the AS OF date. You will need to leave this bank in case you are recording a loan.
- Click on SAVE and CLOSE.
To Record The Fixed Asset Purchase in QB
In case you need to record the fixed asset purchase in QB, you can do so by:
- Banking > Write checks
- Click on the ITEM tab
- Now select the empty field located under the ITEM COLUMN. Now, click on the drop-down menu.
- Next, you need to scroll down the items list and check and select the fixed item for the purchase.
- Once, done, you will be automatically specified by the QB about the purchase of your amount.
THE ITEMS YOU CAN MANUALLY ADD TO THE QB
Let us take a look at some of the items that you can add manually to the QB:
- Furniture and Fixtures: This includes chairs, tables, cabinets, cubicle walls, and more.
- Improvements: This is the money that one spends on the construction of the property of the company, and includes the labor costs as well.
- Land: This includes the cost of land improvement and the purchase cost of the land.
- Tools, Machinery, Equipment: This includes the equipment used for the work outside of the office that has a shelf life of more than one year.
- Buildings: This includes the facilities owned by the individuals.
One can also use the tracking depreciation or amortization allowed by the QuickBook depending upon the specific asset. Not, just that, but one can also track all the assets through General tracking. Here you can use:
- ACCUMULATED AMORTIZATION: is used to track the number of tangible assets one can write off during their useful life.
- ACCUMULATED DEPRECIATION: This is the process of tracking the distribution of the cost of an intangible asset during its useful life.
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