Managing Fixed Assets is important for any organization as Fixed Assets add to the value of the company. The management of FA (Fixed Assets) consist of managing the depreciation, FA ledgers and the value as on date for that asset.
Microsoft Dynamics 365 Business Central provides powerful tools to effectively administer and manage these assets, ensuring full control throughout their lifecycle—from acquisition to disposal. This guide outlines the key features and processes involved in handling fixed assets in Microsoft Dynamics 365 Business Central.
Understanding Fixed Assets
Fixed assets are long-term assets with a life expectancy of more than one year from acquisition. They are vital to the company’s operations and include items such as production equipment, office supplies, and vehicles. Business Central aids in managing these assets by offering detailed tracking, maintenance management, depreciation calculation, and insurance integration.
Setting Up Fixed Assets
To set up a fixed asset in Business Central, follow these steps:
1. Create a Fixed Asset Card:
1. Access the fixed assets list via the search function.
2. Click “New” to create a blank fixed asset card.
3. Fill in the necessary details in the various sections of the card:
4. General: Input the asset code, description, class code, subclass code, serial number, search description, and responsible employee.
5. Depreciation Register: Choose the depreciation book code, FA posting group, depreciation method, and enter the starting depreciation date, depreciation period (years/months), and ending depreciation date.
6. Maintenance: Specify the vendor number, maintenance vendor number, next service date, and warranty date. Indicate if the asset is insured and under maintenance.
2. Acquiring a Fixed Asset:
1. Record the acquisition by creating a purchase invoice.
2. Select “Fixed Asset” in the “Type” field and choose the asset number in the “No.” field.
3. Post the purchase invoice to update the “Book Value” field with the acquisition cost.
Depreciation of Fixed Assets
Depreciation is crucial for accurately reflecting an asset’s value over time. Business Central supports various depreciation methods, including straight-line and accelerated methods like declining-balance depreciation.
1. Set Up Depreciation Methods: Define an asset’s depreciation method in the Depreciation Method field on the Fixed Asset Card page. Multiple depreciation books can be set up to calculate depreciation differently.
2. Run Depreciation Reports: Calculate periodic depreciation by running reports that populate a journal with items ready to be posted.
Managing Maintenance Costs
Regular maintenance ensures the longevity and optimal performance of fixed assets. Business Central allows you to:
i. Record ongoing maintenance costs.
ii. Schedule and track next service dates.
iii. Associate maintenance vendors and manage warranty dates.
Linking Insurance Policies
Ensuring fixed assets are adequately insured is vital for risk management. Business Central enables you to:
1. Link each asset to one or more insurance policies.
2. Track insurance coverage and annual premiums.
3. Verify that insurance costs align with the asset’s value.
Setting Up Fixed Asset Depreciation
Business Central supports various depreciation methods for financial statements and tax returns. You can:
1. Define depreciation methods on the Fixed Asset Card page.
2. Set up multiple depreciation books for different purposes, such as tax reporting and internal reporting.
3. Specify how fixed assets are depreciated using different methods, including user-defined methods and unit-based depreciation.
Setting Up Fixed Asset Insurance
Manage fixed asset insurance coverage by setting up general insurance information and creating insurance cards for each policy. This includes:
– Defining insurance types.
– Creating insurance journal templates and batches.
– Associating insurance policies with fixed assets.
Setting Up Fixed Asset Maintenance
To manage fixed asset maintenance effectively, set up general maintenance information, posting accounts for maintenance costs, and maintenance codes for different types of work. This allows you to:
i. Post maintenance expenses from the fixed asset journal.
ii. Record maintenance codes for different types of work.
iii. Allocate maintenance costs to departments or projects using allocation keys.
Setting Up User-Defined Depreciation Methods
Business Central supports user-defined depreciation methods. You can perform the following:
i. Use the Depreciation Tables page to enter depreciation percentages for each period.
ii. Assign a depreciation book with a user-defined method to a fixed asset.
iii. Calculate depreciation using customized formulas based on the number of depreciation days and the depreciation basis.
Summary
Microsoft Dynamics 365 Business Central offers a comprehensive suite of tools for managing fixed assets, ensuring you can monitor their value, manage depreciation, control maintenance costs, and ensure proper insurance coverage. By leveraging these features, you can maximize the value of your investments and maintain accurate financial records with minimal effort. Whether acquiring new assets, managing existing ones, or preparing for their disposal, Business Central equips you with the tools to streamline these processes efficiently.
