18 Dec QuickBooks Online Advanced Fixed Assets

In prior editions of Ed Talks, I discussed the Enhanced Reports and Workflow features exclusive to QuickBooks Online Advanced. In this issue, I will talk about another QBO Advanced exclusive feature: Fixed Asset tracking. Fixed asset tracking in QBO Adv helps businesses manage their physical assets, such as buildings, machinery, vehicles, and furniture. Here are some key features and steps to get you started:

Adding Fixed Assets

1. Go to Advanced Accounting: Navigate to the Fixed Assets section.
   
   
2. Add an Asset: Enter details like the asset name, purchase price, useful life, depreciation method, and start date.  Fixed assets also require an Asset account (for the cost), an Accumulated Depreciation (asset) account, and a Depreciation Expense account.
   
   

QuickBooks automatically calculates and posts depreciation entries monthly using the accounts you specify on the setup.

Other Fixed Asset Actions

• Bulk Import: You can also add fixed assets in bulk by clicking on the “Add Multiple assets” button and filling out the grid; or by downloading the Excel template, filling out the worksheet, and importing it into to QBO.
• Depreciation Schedule: View and edit the depreciation schedule for each asset to ensure accuracy.

• Record Disposal: When an asset is no longer in use, you can record its disposal, including any gain or loss from the sale.

Setting Up Accounts

1. Create Asset Accounts: Set up accounts in the Chart of Accounts to track the value and depreciation of your assets.  You need at least one account to carry the original cost for each fixed asset class (e.g. Vehicles, Equipment, Building, etc.).
2. Depreciation Accounts: Create accumulated depreciation account(s) to manage depreciation expenses.
3. Balance Sheet Presentation:  There are two common presentations for fixed assets.  One approach is to create a parent account for each fixed asset class and two sub accounts for each class: one for the cost and another one for the accumulated depreciation for each asset class.  With this approach, the parent account displays the Net Book Value for the asset class.  The other approach is to have a fixed asset account for the cost of each fixed asset classes and one shared accumulated depreciation account for all fixed assets (no sub accounts).  The total of all accounts in the fixed asset section is the overall Net Book Value.

Tips for Effective Tracking

• Consult Your CPA: For accurate depreciation methods and useful life estimates, it’s best to consult with your accountant.  The depreciation balances should agree with your income tax schedules (refer to IRS Form 4562).
• Regular Updates: Keep your asset records up to date, especially for disposals and retirements) to ensure accurate financial reporting.