Simple/Smart Fixed Asset Handling in QuickBooks - Part 5

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This article is the final installment in a series introducing a new method for handling fixed assets in QuickBooks desktop editions. For more details on implementing the methodology, refer to the author's textbook, Simple/Smart Fixed Asset Handling in QuickBooks, by Mark Wilsdorf. You will also find more information in the earlier published articles in this series:

For Part One of this series, click here.

For Part Two of this series, click here.

For Part Three of this series, click here.

For Part Four of this series, click here.

In this installment Mark will look at a way to automate depreciation calculations and import depreciation expense transactions into QuickBooks, avoiding some of the manual work of making depreciation entries.  

Calculating and Importing Depreciation Expense

Depreciation calculations are not an integral part of the Simple/Smart (S/S) method. In fact, you can calculate depreciation expense any way you want and simply enter it in QuickBooks manually, as a zero-dollar check (a check for a $0 amount, drawn on a bogus Bank-type account):

But every good system for working with fixed assets should include a way to automate the entire depreciation-calculation-and-transaction-entry process, and the S/S method is no different. Though there are several ways to calculate depreciation, the rest of this discussion will be about a free spreadsheet template which calculates depreciation for a business' entire fixed asset list at once, and prepares depreciation expense transactions for importing into QuickBooks, adding much-needed automation to the job of working with depreciation.

Automating Depreciation Calculations with a (Free) Spreadsheet Template

You can download the template from the following page on the publisher's Web site (i.e., publisher of Simple/Smart Fixed Asset Handling in QuickBooks). It is available in both .xlsx and .xls versions, for compatibility with Microsoft Excel as well as other/older/free spreadsheets: www.goflagship.com/freestuff.html

The depreciation calculation part of the template is "generic" in the sense that it simply calculates depreciation for a list of assets—you can use it for depreciation calculations even if you don't care to use the S/S method. That part of the template is fairly straightforward and easy to understand:  you enter fixed asset Item names in the first column, and asset data in other columns to the right:

The template uses the data to calculate current-year depreciation information, which is displayed in columns farther to the right:

...and a depreciation schedule for each asset to the right of that:

Other tabs in the worksheet create depreciation transactions for importing into QuickBooks via either the Batch Enter Transactions window, or a (purchased) 3rd-party importing utility—either Transaction Pro Importer (transactionpro.com) or IIF Transaction Creator (bigredconsulting.com).

The transactions built on each of these tabs are designed around requirements of the S/S method, but the template could easily be modified to build transactions for a different fixed asset system; for example, if your fixed assets are represented by fixed asset accounts rather than Items.

Importing Transactions: a Batch Enter Transactions Example

The Batch Enter Transactions window is advertised as a feature of the Accountant and Enterprise editions of QuickBooks. Consequently, most Pro and Premier users do not realize that it is accessible to them as well! Maybe this is an oversight by Intuit's programmers, or maybe it is a bit of good will cast in the direction of Pro and Premier customers. Either way, it is a handy feature for importing transactions. (Just realize that it could "go away" at any time if Intuit decides to remove it from the Pro and Premier editions.)

If you use QuickBooks Pro or Premier, you can access the Batch Enter Transactions feature by customizing the icon bar in adding the Batch Transactions icon:

The icon provides the only way to access this feature in QuickBooks Pro and Premier; you won't find a menu item for it.

With the Batch Enter Transactions window open and its columns customized to match those on the Export Batch tab of the spreadsheet template, you can highlight transactions in the template, and Copy them to the Windows clipboard:

Then you can Paste the transactions from the clipboard into the Batch Enter Transactions window, and save them as new transactions:

Due to a design quirk in Batch Enter Transactions, the transactions must be imported as Bills & Bill Credits. So one more step is needed to finish the depreciation entry:  you must apply the Bill Credits (individual depreciation entries) to the Bill (the Depreciation Expense total), to "pay off" the Bill:

If you use a commercial importing product like Transaction Pro Importer or IIF Transaction Creator, the depreciation transactions will be imported as a zero-dollar check, so no Bill payment step will be necessary.

Finally...

Many of the descriptions in this article series were overly brief, due to space constraints, but I hope it provided enough detail to demonstrate that efficient fixed asset handling and good fixed asset records are possible using features already present in QuickBooks Pro and Premier, without buying additional software or outside services.

About the Author

Mark Wilsdorf has worked with QuickBooks users in agriculture since the 1980s. He was editor of AgriComp, the first national magazine for agricultural computing, has authored books about using QuickBooks in agriculture (The QuickBooks Farm Accounting Cookbook™ series), has done consulting work for Fortune-500 businesses serving agriculture, and has been the lead developer on several software projects for developing QuickBooks add-ons. He currently writes an agriculture-oriented QuickBooks blog at QBAgCenter.com.

For proof that Mark always has at least one foot in agriculture, you might look around his office at home.... there you would find things like a folder of soil test reports, calf obstetrical supplies, a seed sample waiting on a germination test, a stack of machinery parts catalogs... and a lariat that he will never learn to use really well.

But, beyond agriculture, Mark is just a 'really smart guy,' as this new series is certain to prove to those of you who have not read as much of his stuff as I have. Over the next several weeks as we cover his installments in this new series, you should get quite a few ideas about his treatment of 'fixed assets' in ways you may have never given them thought before.

Note from the Editor

Insightful Accountant would like to express our gratitude to Mark for taking the time to write such a detailed and helpful article. An article (series) of this magnitude requires a great deal of dedication and effort on the part of an author.