I seem can’t find the use of these fixed asset ledgers (Capital Equipment, Computer, Furniture… etc.) in ERPNext. All of my company’s fixed assets are stored under “Assets” ledger (under Fixed Assets parent group) which is a warehouse account. How can I move/categorize my assets into these fixed asset ledgers? ERPNext won’t allow me to move items from warehouse ledger to non-warehouse account (Capital Equipment, Computer, Furniture…etc).
I also seem can’t find a way to record expenses on these fixed items in expenses account (Direct, Indirect Expenses etc). Can you advice me on how to record expenses while doing the purchase order and purchase recepit? The only way I find the application of these expenses (and income) ledgers is done through joural vochur activity.
For example, a $100 valued printer is recorded in “Assets” (warehouse) under “Fixed Assets” and this spent $100 is recorded in “Credit Line Bank Account” under “Unsecured Loans” (Liabilities), but there is no expenses record for this $100 in “Equipment Expenses” under “Direct Expenses”. I did select “Equipment Expenses” as Expense Head in the Purchase Invoice Item list. This printer is placed in the system via purchase order, purchase receipt, purchase invoice, and finally journal vochur (payment). Where in this process can I record an expense? I need to keep tracking of all expenses I have spent on for company fixed assets.
Thanks in advance for your advice.
I notice that if I set an item as non-inventory (“Is Stock Item” = No), it will record amount in the expense ledger. But it won’t work if I set it as inventory (“Stock Item” = Yes). I read somewhere in the forum and someone said that if an item is stockable then expense ledger won’t be affacted. Is that true? If so, how can I keep tracking expenses on fixed asset item (company assets, not for resale or manufacture) like in the above post?
Fixed Assets is something for which expenses are not booked immediately. Expenses are booked over the year, it’s called Asset Depreciation. Every year some amount expense should be booked, depends on the type of assets.
Though erpnext does not have a direct feature to book depreciation, there is a work around for it, check Not Found.
Ok I see, now I understand the exact definition of Fixed Assets. Suppose I go with the asset depreciation method, how will I make a report on how much I have spent on expense on office equipment in a certain month? The Profit and Loss report doesn’t show this expense because the expense was done through Assets and Liabilities accounts (purchase orders and invoices).
I’m little bit confused on how to record expenses on business equipment such as computer and printer. Maybe you could give me a simple example of how to do this. Let’s say, I make a purchase order for a $100 printer from ABC supplier and then make purchase receipt for this order, next I make a purchase invoice and make a payment on it. I would apply Asset Depreciation on the printer for tax purpose but it still doesn’t tell me how much I have spent on equipment expense in each month. Should I avoid using purchase order and invoice for office equipment, and use journal vochur to debit an expense ledger and credit a bank ledger so this will record my internal business expense? (Although this way doesn’t track transactions between supplier and my business…)
You can check monthly expenditure for fixed asset from Balance Sheet report. In Balance Sheet, check balances for Computers, Furniture and Fixtures account. Though this are not the expense account, but you will get the required amount.
After reading more detail on accounting, now I see how accounting handles assets. I will have to accept the way it handles. Still I would like to know how much I spent in each month. I was thinking of debiting money into an expense ledger and credit from temporary liabilities ledger. Will this workaround work and won’t cause any conflict in the system?
The monthly expenditure for fixed asset from Balance Sheet report shows accumulated value, not explicit individual month value. I will have to manually select start and end date for each month in the general ledger report to reveal my expenditure of the month. It consume my time but that’s ok for now.
What activity I need to do in order to debit these fixed asset ledgers (Computers, Furniture and Fixture etc.)? I can see them in the chart of account but not sure how to use them.
Sorry for my constant questioning but this will be my last questions for this topic.
Debiting Temporary Liability account is not the right way to book expenses for fixed asset. It will resulted wrong account values, as there will be existing asset value, booked expenses, and liability will credited 2 times.
To debit fixed asset ledger, you have to create
Inward Stock Transaction, if you are using Perpetual Inventory.
If you disable Perpetual Inventory, you can book expenses at the making purchase invoice for all fixed and current asset items. Later manually you have to book “Stock In Hand” periodically.
Ok, how can I make an inward stock transaction? Stock entry shows only warehouse accounts.
Inward Stock Transaction is “Stock Entry” with purpose “Material Receipt”. And your fixed asset ledger is same as warehouse account for fixed asset items. Basically you should always maintain a separate warehouse to stock your fixed assets.
Sorry, I didn’t explain clearly. I meant how to debit to these non-warehouse accounts under Fixed Assets parent group such as Capital Equipment, Computers, Furniture…etc? I seem can’t find a way to access these ledgers.
Actually yes, those are meaningless in case of perpetual inventory system. Fixed assets values will always go direct to their corresponding warehouse account. But in that case, those warehouses should be created under "Fixed Assets " group.
In case of non-perpetual system, you can use them via JV.
But overall I agree, there are lot of scope to improve Asset Management system. We will try to focus on that direction in the near future.
Ah now I get it. Maybe hide these non-warehouse ledgers when the system is in perpetual mode so it lessens the confusion to users? Thanks for your help!