NetSuite Tutorial: How to Best Track Depreciation in Fixed Asset Accounts
Tired of manually building your depreciation schedules in MS Excel? Save some time and use NetSuite to automate the process!
Compared to prepaid amortization, maintaining fixed asset accounts can be a 9 to 5 job for any accountant. In fact, depreciation schedules can be one of the most challenging parts of the job.
During my accounting career, updating fixed asset schedules used to take me more than a day or two since I had to track each fixed asset with their values, calculations and status (newly acquired, deprecating and disposal).
If you take a look at these screenshots below, I doubt anyone could actually tell which is manually updated and which is automated.
In this article, I will help users to identify some important requirements and processes to create your own depreciation schedule in NetSuite.
1. Identify Your Fixed Asset Accounts
Companies have different needs when it comes to their fixed assets.
Once you have identified those fixed assets, you will need to map them in your Chart of Accounts (see above for example).
2. Identify Your Asset Types
Generally, a company will separate their fixed assets into 3 types (tangibles/intangibles/leases).
This helps the system to bucket new fixed assets into the right category.
What Does Deprecation Look Like in NetSuite?
To create a depreciation schedule for any fixed asset in NetSuite, you will need to hover over Fixed Asset > Transaction > Asset Deprecation.
As you can see, NetSuite will automatically depreciate asset types as a group.
This is different from amortization since you are able to select individual schedules. This is why it’s important to identify your fixed asset accounts and your asset types.
Once you’ve run your depreciation, you can find your depreciation within each asset and your journal entry number.
With this NetSuite fixed asset module, accountants are alleviated from constantly updating their depreciation schedule manually with new depreciation journal entries.
Why should you use Fixed Asset Management in NetSuite?
- Comprehensive support for different types of assets
• Depreciating or non-depreciating company assets
• Supports unlimited asset types
2. Supports line item detail for assets
• e.g. insurance and maintenance schedules
3. Easy to use asset entry and management
• Automated defaults for asset creation,
depreciation and eventual retirement.
4. Improves your Business Process
• Automates the creation of assets from purchase orders/bills/journal entries (instead of updating your assets in your asset schedule in Excel)
• Posts depreciation and asset retirements directly to NetSuite accounts (instead of creating your journal entries via Excel and updating your schedule in Excel. This is very common when you miss one or two depreciation entries).
- Streamlines the entire process, including journal posting, bill posting and PO billing posting.
5. Improves your Business Process
- Preconfigured reports including asset register, register summary, depreciation schedule and report status
• Saved searches on monthly depreciation, asset additions, asset disposals, period movement, asset list, asset register, proposal history, inspections due, insurance renewals
Let me know if you would like to learn more about fixed asset module.
Jacky
