QuickBooks Online can help you improve the accuracy of your bookkeeping and accounting if used correctly. It can give you a clear picture of your company’s current financial health, and is a powerful tool that allows you to plan for the future with confidence.
One of the software’s most powerful tools is the ability to record fixed assets in QuickBooks. Accurately storing this information helps you monitor your finances now and accurately file your taxes at the end of the year.
It is recommended that you spend a great deal of time familiarizing yourself with the capabilities of your QuickBooks Online account before you get started. Another option is making use of an outsourced QuickBooks Online accountant.
What Is a Fixed Asset in QuickBooks?
A fixed asset in QuickBooks can also be referred to as a tangible asset. It is an asset that cannot quickly be converted into cash. Real estate is an example of a fixed asset.
When answering the question, what is a fixed asset in QuickBooks, you can think about equipment or property that a business owns and needs if it is to function and generate income. Fixed assets are not easily consumed. On a balance sheet, they appear as property, plant, and equipment (PP&E). Some refer to these as capital assets.
How to Record a Fixed Asset Purchase in QuickBooks Online
In QuickBooks Online, the Fixed Item Asset List can be used to track individual assets. This list allows you to enter information pertaining to the amount you purchased an item for, the date you purchased the item, and whether you purchased the asset new or used.
The Fixed Item Asset List can also be used to record how much you sold the asset for if you decide to sell the asset in the future.
1. Open the Fixed Asset Item List by selecting List > Fixed Asset Item List from the menu bar.
2. Add a new item to the Fixed Asset Item List by clicking the “Item” button in the lower left corner of the list window.
3. From the pop-up menu, select the “New” command.
4. You will see the “Asset Name/Number” field. Input the name or number of the asset.
5. Next, use the “Asset Account” drop-down to select the asset account that should be used when tracking the value of said asset.
Purchase Information Section
1. In the “Purchase Information” section, select the option to identify if the item is new or if it is used.
2. In the “Purchase Description” box, you can type the description of the asset being recorded.
3. In the “Date” field input, record the date you purchased the item.
4. Use the “Cost” field to enter the cost of the item.
5. The “Vendor/Payee” field can be used to enter the name of the vendor or the payee.
Asset Information Section
1. Under the “Asset Information” section, describe the item by using the “Asset Description” box.
2. In the following boxes include the location, serial number, PO number, and the date when the warranty expires. In the “Notes” section, you can include additional information pertaining to the purchase of the product.
Sales Information Section
You can use this section to record information about the item once you have sold it.
1. After selling the item, mark the “Item Is Sold” section.
2. Enter a “Sales Description” that will be followed by a sales date, price, and expense.
Custom Fields Function
On the upper right-hand side, you will see the “Custom Fields” button. As of 2021, this button is the fourth one from the top.
1. Click the “Custom Fields” button to open the custom fields dialog box. You will see that the header of the box says “Custom Fields” for the name of the product inserted into the Asset Name/Number field.
2. Click the “Defined Fields” button. This will open the dialog box “Set up Custom Fields for Items.” It is here that you can create new custom fields following the same pattern used to create new custom fields in the “Item List.” Once you have defined the new field, click the “OK” button to return to the “Custom Fields” dialog box.
3. Now, enter the value for any of the newly created custom fields shown in the dialog box. Then, click “OK.”
4. This will return you to the “Item List” menu.
5. In the “Item List” menu, click “OK” when you are finished.
6. Your new item should be properly registered in QuickBooks Online.
Get Help Learning How to Record a Fixed Asset Purchase in QuickBooks Online
QuickBooks is a user-friendly program. It is also a comprehensive software. This means that while it is easy to understand some aspects of it, deeper functions, like adding a fixed asset in QuickBooks, can be complicated for new users.
Fusion CPA is staffed with CPAs and accountants who are experienced in using QuickBooks Online. We can show you how to add assets in QuickBooks Online and walk you through the process using a host of accounting and bookkeeping software. Our team of experienced accounting professionals can help you keep your software up-to-date and steer clear of issues with the IRS. The goal is to improve the financial health of your business. We look forward to learning more about your business and how we can help you face its current challenges.
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.