How do you handle depreciation on QB

Laura1980 · ‎April 19, 2022

How do you guys handle depreciation in QBO ? More precisely I would like to know if you keep an excel file outside QBO where you list all assets, and you keep their depreciation schedule and if you make one big depreciation entry for all assets at one , say each month , or if you do separate entries for each asset each month ? Do you automate the depreciation for each asset separately in QB ? Or you make only one entry depreciation where the amount combines all asset depreciated that month ? How do you keep track of all that , you add new assets , you completely depreciate another asset at a certain point in time etc. How do you know where you are at with each asset and their specific depreciation schedule ? Not sure if I am being clear but I am very interested in knowing the most easiest way to keep track of these things and what are the best practices in general when it comes to adding new assets, depreciation schedule how you enter that in QB , how do you keep track where you are with depreciation schedule , if you have many assets not just a few ?

Fiat Lux - ASIA · ‎April 19, 2022

@Laura1980 wrote:
how do you keep track where you are with depreciation schedule , if you have many assets not just a few ?

Consider having an additional app to do so and integrate it with your QBO. It costs GBP 15/company

AbegailS_ · ‎April 20, 2022

Welcome to the Community space, @Laura1980. Let me add some information about depreciation in QuickBooks Online (QBO).

QuickBooks Online (QBO) doesn't automatically depreciate fixed assets. Instead we can manually use journal entries to track depreciation asset accounts. You can also review this article from the IRS.

To ensure that your recording are accurate, I recommend consulting your accountant. They can provide advice and help you regularly review how you track depreciation assets in QBO. If you're not affiliated with one, you can use our Find an Accountant tool to look for a Pro-Advisor near your area.

To learn more about the process, please see this article: : Depreciate assets in QuickBooks Online

I'm also including this article to learn more about creating journal entries in QBO in the future: Create a journal entry in QuickBooks Online.

Just go back to this thread if you have other questions or concerns about tracking depreciation in QBO. I'll keep an eye out for your response.

Laura1980 · ‎April 24, 2022

Thank you , that's interesting .

I have never heard about this app.

Thank you ,

Hector12 · ‎April 27, 2022

When using QuickBooks for your accounting system, you don’t have to manually calculate depreciation expense amounts for your business. The Planning & Budgeting section of QuickBooks includes Decision Tools, and one of those tools helps you figure out your depreciation expense. Monkey App Download

Depreciation doesn’t involve the use of cash. When talking about accounting, depreciation is purely a way to show how quickly you’re using up an asset.

The first step in using QuickBooks for depreciation calculations is entering information about your fixed assets, as shown here:

After you enter asset information, the system automatically calculates the depreciation expense using the Straight-Line method, the Sum-of-Years-Digits method, and the Double-Declining Balance method, as shown here:

You select the method you want to use and save the information about each asset, which you can then refer to at the end of each year when you need to record the depreciation expense for that year.

TIPS:

When you actually enter the data in your computerized accounting system, be sure to check with your accountant on how to enter that data based on how your system was initially set up. Depreciation expense, because it does not involve cash, is a bit more complicated to enter.

Rainflurry · ‎April 28, 2022

@Laura1980

Personally, I think a spreadsheet outside of QB is best with a single journal entry, not multiple entries for each fixed asset. Depending on the volume of depreciation being taken, you can make journal entries to book the depreciation monthly or annually, at year-end. If you have a material amount of depreciation, I would suggest entering it monthly so it doesn't skew December's numbers and will accurately represent the company's performance on interim financial statements.

When you make journal entries, you debit depreciation expense and credit accumulated depreciation. When you track the depreciation of each individual asset on your spreadsheet, you will have a running total of the asset's basis (cost less accumulated depreciation).

Unless you are required to prepare GAAP-compliant financial statements (if you're posting here, it is unlikely) make sure you are following the IRS schedule for depreciation, not another schedule like double-declining balance or sum-of-years, those do not apply.

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How do you handle depreciation on QB