Fixed Assets addition by existing Purchasing Invoice

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Posted on by colson17

The purchasing department is not allowed to set up new fixed assets and often we don't know about the fixed asset until it shows up on an invoice. Our current process is that the purchasing department puts the asset to a fixed assets clearing account, the accountant then adds the asset into the fixed assets system which removes the asset cost from the clearing account and adds it to the fixed assets acquisition cost account.

We are looking to implement Business Central's fixed asset module. I see how to add the fixed assets directly from purchasing - but I don't see how to link it if it is an already existing purchase to my fixed assets and retain a similar process that we have above. Can someone advise?

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colson17 14 on at

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Fixed Assets addition by existing Purchasing Invoice

I wrote this question and later learned a great deal more about fixed assets in Business central and wanted to update it with better steps.

Business Central actually has this built in but doesn't explain it well in the trainings.

If the purchasing department uses a clearing account, then a different individual adds fixed assets. Here are the steps:

1) After setting up the asset depreciation information on the card, a bar will show at the top to Acquire - you can also get there by going to Home > Acquire

2) This will start a wizard that allows you to pick a GL account, which will be the clearing account.

3) The next screen will let you enter the cost and the date it was actually purchased

4) There is a radial button on the next slide that asks if you want to see the journal or just post it - I selected see it.

The entry correctly moves the asset from the clearing account to the asset account and books the book value to the asset.

Why is this important - many larger A/P departments the A/P person is not the knowledge holder for the depreciation set-up of an asset or asset management.

Utilizing a clearing account helps expedite the A/P process and allows the knowledge holder of the assets to set-up the assets before month-end. Why use a clearing account instead of directly going to the asset account? This is the best way to make sure someone has set-up all the assets for the month that were booked by the A/P department. Plus it makes it way easier on the A/P department for coding. If they make a mistake on coding an asset that shouldn't be capitalized, the asset manager can review that in the clearing and then simply move it to the proper expense account. Otherwise, they can move it out by utilizing the step above when they capitalize the asset.

Hope this helps anyone else trying to navigate clearing accounts in BC fixed assets.
colson17 14 on at

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RE: Fixed Assets addition by existing Purchasing Invoice

Thank you Alexander - I do think that will work, I was just hoping to do it in one step not two steps. Sounds like unless I create the asset ahead of time or at the time of purchase then it is two steps, adding the asset alone will not clear it from the clearing account. I must add the asset, then enter a journal. Thank you for your help!
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Inge M. Bruvik 32,748 Super User 2024 Season 1 on at

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RE: Fixed Assets addition by existing Purchasing Invoice

The best process is to create the FA prior to or at the same time as you receive the invoice then you can post your invoice directly to the fixed asset without having to use the clearing account.
Jun Wang 7,433 Super User 2024 Season 2 on at

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RE: Fixed Assets addition by existing Purchasing Invoice

so user needs to manually reverse the previously posted journal, and create a purchase invoice to acquire the FA. It doesn't seem to be a connection between the 2 steps.
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Alexander Ermakov 28,094 on at

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RE: Fixed Assets addition by existing Purchasing Invoice

You can basically achieve the same process in BC. Purchasing department will post the invoice to a clearing account (debit of clearing account and credit of accounts payable). Then your accountants will create a fixed asset card, and then they can use e.g. Fixed Asset G/L Journal with selection of that clearing account as a balancing account - after posting the journal you should get the desired result: clearing account will be cleaned and you will get a value on the fixed asset account.

Here is more info on the subject: learn.microsoft.com/.../fa-how-acquire

Remember Fixed Asset Journal is different from Fixed Asset G/L Journal :-)

community.dynamics.com/.../fixed-asset-journals
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NAV_with_Narang 2,234 Super User 2024 Season 1 on at

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RE: Fixed Assets addition by existing Purchasing Invoice

Hi Colson - You can create a clearing account in your COA similar to your existing process. You can use a General Journal to load the cost in this clearing account, with appropriate description and/or dimension tagging so you can locate this entry when you want to book an actual FA. Now when you create a FA Master and book a purchase invoice to post an acquisition cost, you can then reverse the Journal you created.