How to Setup a Fixed Asset Manager in QuickBooks Desktop?

With the QuickBooks platform and zeal of the organizations to stay upskilled, has brought some new terminologies to the table. Another advanced feature to be considered is Fixed Asset Manager.

This Fixed Asset Manager (FAM) is known to be a feature that is available in QuickBooks Desktop. IT enables you to compute the depreciation of fixed assets based on the given standards by the IRS. This advanced feature will bring some other tech-term that you should be familiar with. Those terminologies are:

• Depreciation Methods
• Predefined Reports

These above mentioned tabs are the part of Fixed Asset Manager to assist you for better management of your asset information.

Advantages of FAM QuickBooks:

Here are some of the advantages of this feature to count for.

• You will be getting the accurate calculation of the depreciation of your business assets.
• The track record of assets can be maintained.
• Intimation of proper journal entries will become more easy.
• Various depreciation forms and the reports can be generated in an efficient manner.

In order to setup the QuickBooks Fixed Asset Manager (FAM), few of the information will be required:

• Name of the Company
• Company Address
• Account Chart
• Contact Details of the Company
• Income Tax Form
• Federal Tax Details
• Details of Business Assets and their value.

Managing Fixed Assets Using Fixed Asset Manager (FAM) in QuickBooks

The QuickBooks Desktop feature known as Fixed Asset Manager (FAM) calculates fixed asset depreciation in accordance with the guidelines published by the IRS. You may manage your asset data more effectively by using the terms, depreciation methods, and predefined reports in Fixed Asset Manager.

Terminologies

• Capitalization Limit: The amount that must be spent on fixed assets in order for them to count as assets instead of expenses. For example- Depending on the size of the business, it may be anything from $200 to $20,000 per item purchased.
• Fixed Asset: Tangible items that a company owns and whose worth exceeds its capitalization limit, such as furniture, computers, machines, and other goods with a longer usable life.
• Depreciation: The decline in value of an asset, attributable to deterioration, outdated technology, and impending retirement. Depreciation is especially applicable to tangible assets like equipment and structures. For tax purposes, it is necessary to keep track of this value loss.
• Disposal of Asset: This refers to taking an asset out of the business by theft, sale, or throwing it away.

Depreciation Methods

• Method of Straight Lines (SL): It is a simple method that allocates the same amount of depreciation to each time period.
• The Declining-Balance Method (150% & 200% DB): Allocates higher depreciation expense to the first few years of an asset’s life, while it is new; as there should be less downtime and maintenance in the beginning, the company should gain more usage out of the asset.
• MACRS (Income Tax Method): The double-declining balance method is used by this method, although only one-half of a year’s worth of depreciation is taken in the first year, and then you switch to the straight line method in the middle of the asset’s life, taking six years to depreciate a five-year item.

Predefined Reports

• ACE Adjustment Calculation: Calculating the total ACE adjustment required to prepare a corporation’s tax return. Within each group, assets are sorted by asset number and grouped by category.
• Amortization Schedule by General Ledger (G/L) Account Number: To see an overview of the activities related to the amortized assets. Assets are sorted by asset number and categorized by general ledger account number within each group.
• Amortization Schedule by User Defined (1 to 5): To view a list of the amortized assets’ recent activity, organized by a single user-defined classification. Assets are sorted by asset number inside each group and grouped according to the user-defined field.
• AMT Adjustment Calculation: The Federal depreciation less the AMT depreciation equals the AMT adjustment, thus print the relevant data for reporting the AMT depreciation adjustment. Within each group, assets are sorted by asset number and grouped by category.
• Asset Sales Description for Asset Disposition: To see a summary of disposition data based on the selling description each item was given. Assets are sorted by asset number inside each group and grouped according to the asset sale description.
• Asset, Basis, and Disposition Details Report: To print each asset’s details from the Asset and Disposal tabs that you may see on your computer screen.
• Assets Acquired in the Current Year: To see a summary of each asset bought this year. Within each group, assets are sorted by date of acquisition and grouped by general ledger account number.
• Depreciation Schedule by G/L Account Number: To view a list of all activities for every asset, grouped by general ledger account number. Each group’s assets are organized based on the date of purchase.
• Depreciation Schedule by User Defined (1 to 5): To see a list of each asset’s activity organized under a single user-defined category. Within each group, assets are sorted by asset number.
• Lead Schedule by Category: To get a lead schedule formatted activity summary for each asset, grouped by category. Within each group, assets are sorted by asset number.
• Lead Schedule by G/L Asset Account: To view an activity summary for each asset in a traditional lead schedule format, organized by general ledger account number. Within each group, assets are sorted by asset number.
• Lead Schedule by Location: To get a lead schedule formatted activity summary for each asset, grouped by location. Within each group, assets are sorted by asset number.
• Lead Schedule by Property Description and Tax Form: To see a lead schedule style activity summary for each asset, grouped by tax type and property description. Within each group, assets are sorted by asset number.
• Monthly G/L Accumulated Account Summary: View the beginning and ending balances of the total monthly cost additions and deletions. By asset account from the general ledger, this report is grouped. Assets without account numbers are categorized as “No Account Number.”
• Monthly G/L Asset Account Summary: To view the beginning and ending balances of the total monthly accumulated depreciation/amortization additions and deletions. General Ledger Accumulated Depreciation and Amortization account groups the data in this report. Assets without account numbers are grouped as “No Account Number.”
• Monthly G/L Expense Account Summary: To view the beginning and ending accumulated depreciation and amortization balances, as well as the total monthly additions and deletions of depreciation and amortization expenses. The General Ledger Depreciation and Amortization Expense account serve as the grouping for this report. Assets without account numbers are categorized as “No Account Number.”
• Schedule of Personal Property by Year of Acquisition: To view a list of the assets’ depreciation amounts that you marked as personal property. Assets are classified by acquisition date within each group and grouped according to the year they were put into service.
• Projection by Category: To look at each asset’s five-year projections. Assets are organized into categories and then sorted within each category by asset number.
• Remaining Basis Over Remaining Life Report: To find assets that hadn’t been completely depreciated. This report’s assets are subtotaled and sorted by category.

Steps to Setup the QuickBooks Desktop Fixed Asset Manager (FAM):

You need to follow these steps to start using the QuickBooks Desktop Fixed Asset Manager (FAM):

Step 1. Set-up of the Income Tax Form

In any context, setting up the form of your income tax is considered to be a vital step. It helps FAM to track asset depreciation in an appropriate tax line that complies with the given industry standard.

If you are just starting from scratch, then you need to create your QuickBooks Desktop company file.

• From the No Company Open window, click on Create a new company and then click on Detailed Start.
• On the Easy Step by step prompt Interview describing how your company is organized? window, select your income tax form.
• Finish creating your company file.

If you already have an existing data file on the QuickBooks Desktop, then please refer to these steps:

• From the Company menu click on the My Company tab.
• Then, you need to click on the Pencil Icon and Select Report Information.
• You finally need to Choose the income tax form best suited for your business and select the OK button.

Step 2. Setting up a General Ledger (G/L) Account in QuickBooks Desktop

Depending on your business preference, you can either choose to track your assets using the Minimal account setup, where you get to maintain a limited number of accounts that are used or you can also choose the Ideal account setup where individual accounts are set up per fixed asset.

In addition to the asset account, FAM also posts depreciation to the specific Depreciation (Expense) account and another entry is also there to offset the Accumulated Depreciation in the account. It is important to have a specific General Journal (G/L) account created before you decide to use FAM for the first time. Here are the steps you can follow to add a general ledger account in QuickBooks Desktop:

• First of all, you need to sign in to the QuickBooks account.
• Go to the Gear icon at the top, then click on Account and Settings.
• You need to select the Advanced tab.
• In the Chart of Accounts section, you need to click on the Edit (pencil) icon.
• You should check Enable the account numbers and Show them as well.
• Click on the Save Button and then hit Done.

Step 3. FAM Client Wizard

For opening the FAM Client Wizard, You need to go to the Accountant menu and select Manage Fixed Asset. Then, you need to choose the option which is most appropriate to your business. There are following available scenarios to choose from:

• Creating a new Fixed Asset Manager Client: This is for the first time users.
• Transfer of a Prior Year Fixed Asset Manager Client: This is available for revisiting users.
• Reconnection of the Accountant’s Review Copy with Fixed Asset Manager: This option will enable you to add current year assets into the company file.
• Restorage of a Current Fiscal Year QuickBooks on Fixed Asset Manager Client File: This option allows a Fixed Asset Manager Backup file to be restored.

Step 4. Add Asset in Fixed Asset Manager

Usually, when you have FAM and QuickBooks Desktop, these two platforms can sync with each other and import the available information on an automatic basis. This particular stage described in this section is only applicable if you have not set up your fixed asset accounts yet in QuickBooks Desktop or if your preference is to transfer all required information from FAM to QuickBooks Desktop. You need to add an asset to FAM:

• Select Add from the toolbar;
• Select F4 from your keyboard; or
• Select Add Asset from the Asset menu.
• Once the asset is added, you can use the top portion to add required information of the asset such as federal form used to report depreciation, description, and general ledger accounts that were created in QuickBooks Desktop.
• You can also use the lower portion to add depreciation calculation information including as cost, tax system, and depreciation method.

Step 5: Asset Synchronization

Although QuickBooks Desktop and FAM use different data files, they can sync information using either automatic or manual sync.

Automatic Synchronization

• Select Asset Synchronization Options from the FAM QuickBooks menu.
• After that, you have to select Both new and changed fixed asset items and Automatically when QuickBooks Fixed Asset Manager opens on the From QuickBooks tab.
• After that, you have to select OK and refresh the program close Fixed Asset Manager.

Manual Synchronization

• You have to select Asset Synchronization Options from the FAM QuickBooks menu.
• By choosing “Update Assets from QuickBooks” from the QuickBooks menu, pick manually on the From QuickBooks tab.
• Now you have to select manually by selecting “Save Assets to QuickBooks” from the QuickBooks menu that is under the To QuickBooks tab.
• After that, you have to select OK, and then to refresh the program closes the Fixed Asset Manager and then make manual syncing available.
• Then you have to Reopen Fixed Asset Manager.
• Lastly, you have to choose Update Assets from QuickBooks or Save Assets to QuickBooks to sync information from the FAM QuickBooks menu.

Asset Synchronization: Sample Scenarios

• When entering a check, the small business owner enters an asset as a Fixed Asset list item. The accountant opens FAM after receiving the backup of the company files from the small business owner. He won’t have to enter all of the asset information again because the asset will be imported into FAM, allowing him to add depreciation details.
• The small business owner makes the choice not to use the list of fixed assets. The accountant exports assets to the item list after entering assets in FAM. The owner of a small company will have a current electronic copy of their fixed assets.
• The owner of a small business adds an asset to the list of fixed assets. The accountant syncs, edits, and imports the asset information into FAM. The small business owner will then have easy access to changes.

How to Use Fixed Asset Manager in QuickBooks Desktop

Tracking your fixed assets can begin now! Know how to complete many important Fixed Asset Manager (FAM) duties.

Assign an Account to Multiple Assets

Converting asset data from one version of QuickBooks Desktop to another or importing the assets into FAM, may leave some General Ledger accounts (G/L accounts). In FAM these may need to be manually assigned in FAM.

• First, you have to Open Fixed Asset Manager.
• Then you have to highlight all the assets that need to be assigned to a specific account.
• After that, you have to right-click the assets that are selected and then you have to select Assign G/L Accounts to Assets.
• Now you have to select the account and then you have to click OK.

Change or Add Depreciation method/setting

To calculate the current and old depreciation properly you may need to change or add the Depreciation Method for a fixed asset in order for FAM.

• You need to Open Fixed Asset Manager,
• Then you have to select Client Information from the File menu.
• Now you have to select the correct depreciation method for the depreciation basis from the Methods tab.
• If you want to save the changes you have to select OK.

Depreciate an old Asset

Even before you decided to use FAM your business must already have some fixed assets. If you want to record your fixed assets with correct depreciation then you have to follow the below steps:

In QuickBooks Desktop

• You have to choose Fixed Asset Item List from the List menu.
• Then you have to select Item, then you have to select New.
• Now you have to enter the details that are needed, then to close the New Item window you have to select OK.

In Fixed Asset Manager

• When the Asset Synchronization Log window will open you have to select Ok.
• Now you have to double-click the asset that you have created in the Schedule tab.
• You have to scroll down to the Prior Depreciation row on the Federal column, then you have to choose the amount that is displayed.
• By adjusting the AMT, ACE, Book, State, and Other columns you have to make the correct changes.
• At last, you have to select Save.

Export QuickBooks Fixed Asset Items into ProSeries Form 4562

• First, you have to go to ProSeries, then in QuickBooks Desktop, you have to create the file with the form that is the same as the form.
• In QuickBooks Desktop:
  • You have to create FAM assets
    • Firstly, you have to select Fixed Asset Item List from the Lists menu
    • Then you have to select Item and then you have to click New
    • Now you have to enter the Fixed Assets Information and then you have to select OK.
  • You need to import QuickBooks FAM data into fixed asset modules.
    • Choose Manage Fixed Asset under Accountant.
      Enterprise edition of QuickBooks: Company > Manage Fixed Asset
    • Then you have to select Create a new client for Fixed Asset Manager, then select OK twice and Next.
    • Select Next after entering the date.
    • Next after choosing the applicable basis.
    • Choose Next after choosing the Default Depreciation Method for Each Basis.
    • Choose a method for bringing the fixed asset items from QuickBooks Desktop into the Fixed Assets Module, then you have to click Next.
    • Next, you have to choose the asset type to save to QuickBooks’ Fixed Asset Item List.
    • In the Asset Synchronization Log window, you have to click Finish and then you have to click OK.
• In Fixed Asset Manager
  • First, you have to choose Export > ProSeries Tax > Export from the File menu.
  • From the list of Export ProSeries Tax Client Files, you have to choose the file
  • Now you have to select the client file and then you have to click Export.
  • Choose OK. You must understand the message. The export was successfully completed.
• In ProSeries
  • When you open the client file in ProSeries, the import should be displayed as Completed.
  • In the asset list of the ProSeries Form 4562 Depreciation and Amortization Schedule and Asset Entry Worksheets, all assets from QuickBooks Desktop should be visible.

Import Fixed Assets from Excel into the Fixed Asset Manager

As long as the third-party application can export data as a Comma Separated Value (.CSV) file, you can transfer information from it to FAM.

• Begin by opening Fixed Asset Manager
• You have to select Import from the File menu
• To start the Import Wizard you have to select Comma Separated(CSV)
• To complete the import you have to follow the options that are asked.

Select the Basis on Which to Post a Journal Entry

You can change the basis (Federal, Book, AMT, ACE, State, or Other) on which journal entries are posted in Fixed Asset Manager.

• You have to open Fixed Asset Manager first.
• Then you have to select Post Journal Entry to QuickBooks.
• Now you have to select the post basis that you want from the Basis to the post-drop-down menu.
• Then you have to post the journal entry as usual.

All of this can appear to be overwhelming though every step has been explained. But do not worry at all as at Dancing Numbers we understand this and have a team of experts to handle all of it. You just need to connect with them and ensure to mention your detailed query and our personnel will come up with the best suited solution for your business.

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Frequently Asked Questions (Faqs)