Category Archives: Fixed Asset

New release! MoneyWorks version 9

Cognito has released MoneyWorks version 9. 

MoneyWorks accounting software runs on either Windows or macOS. It can be a standalone, installed in a client-server environment, or host it in a cloud. Having a cloud-based system could be essential these days when a majority of us is working from home.

What’s new in MoneyWorks version 9?

MoneyWorks version 9 has lots of enhancement, and the main changes include:

  • Optimising the performance when running in the newest Macs with M1 processors.
  • 3rd party services.
  • A Search function in the report preview window.
  • An integrated Fixed Assets module.

3rd party services such as Bank Feed, Invoice Automation, and e-invoicing (Send and receive invoices electronically using the international PEPPOL standard) can install easier into MoneyWorks without having a separate script. Although some of the services are only available for New Zealand and Australian user, it is a good start for all.

With a search function, you do not need to scroll up and down the report, looking up information within hundreds or thousands of transaction. Enter the keyword that you wish to find and the results presented to you within seconds.

It is not just a fixed asset register that shows the number of assets you owned. MoneyWorks fixed asset is a complete fixed asset module that allows the accountant to process depreciation, revaluation, and disposing of assets.

Fixed Asset software

Process the depreciation monthly or annually, or whenever you need to revalue or dispose of the asset, once you have set up the fixed asset. A journal posted automatically adjusting your asset value when processed.

We will discuss more on MoneyWorks fixed asset in our future post. In the meantime, you may download a trial to test drive the fixed asset (install version 9 onto a separate computer if you are still using an older version of MoneyWorks); or book a demo to find out how to using MoneyWorks to manage your business finance.

Visit the Cognito website to check out the change history of the MoneyWorks version 9.

Fixed Assets

Fixed assets, which is a non-current asset, is a balance sheet account. The Plant and Machinery, Furniture and Fittings, Office Equipment, etc. are fixed assets.

It is common for small business accounting software not includes a fixed assets module; a module which allows the user to tracks and calculates depreciation of an individual asset automatically.

You can use a spreadsheet as a fixed assets register if the requirement is simple. Do consider a fixed asset management software if you have outgrown a ‘spreadsheet’ asset register or get a custom solution which tailors to your need. Tracking and reconciling assets can be a complicated process, especially when you have hundreds or thousand of them (and in multiple locations).

The asset, which you have purchased, need to update in both accounting software and the fixed assets register. It debits the fixed asset account and credits accounts payable or a bank account (depending on the transaction type or accounting method) when recording the transaction in an accounting system.

The spreadsheet (asset register) capture information such as the assets ID, date acquired, description, cost, depreciation, accumulated depreciation, and net book value. Optionally, you may include the serial number, supplier, supplier’s invoice date and reference number, warranty expiry date, asset location, who uses it, etc. (Do consult your accountant if you do not know how to create an asset register with a spreadsheet for your region).

Fixed Assets

Based on the fixed assets register, record the monthly or yearly depreciation via a general journal; it debits depreciation expense and credit accumulated depreciation account.

It may be good to have the asset register separated from the accounting system. When you changed accounting systems as your business grow or change of business model, it does not affect the asset register.

 

 

 

How to convert an inventory part to a demo equipment in the QuickBooks accounting software?

Software: Intuit QuickBooks #accounting software

Some retailer or wholesaler may convert the existing inventory into a demo equipment for the showroom or as a loan set for testing.

Your accountant may classify a demo equipment as a fixed asset aka non-current asset if the expenditure qualifies (Please check with your accountant if you have doubt on asset classification). Then, you need to transfer the item from the inventory asset to the fixed asset account.

You can create an inventory part from the Item List whereas the fixed asset item is from the Fixed Asset list under the Lists menu.

An Inventory Adjustment is used to adjust the inventory part but not the fixed asset. You may consider using a Bill or a Write Cheque for transferring between the inventory asset and the fixed asset.

Inventory to Fixed Asset

You select the demo equipment from the Item tab and enter the cost of the equipment. On the following detail line of the Item tab, you pick up the inventory part and enter a negative quantity and value for the item. The journal behind the transaction will debit the fixed asset and credit the inventory asset account. The transaction amount is zero as both the inventory asset and fixed asset account have contra with each other.

You record a sales invoice with the demo equipment when the used equipment has sold. The journal of the sales invoice is debiting the accounts receivable (or the bank account) and credit the fixed asset account. A General Journal is needed to adjust the fixed asset account when the sales value of the demo equipment is different from the asset cost (Please check with your accountant on disposal of fixed asset).

Resources:

Please visit the IRAS website if the above links have moved.