How do I record the purchase of a fixed asset across multiple payments?
This help guide article explains how you can record the purchase of a fixed asset across multiple payments, without creating multiple assets on the ExpensePlus Fixed Asset Register, which is what happens if you record multiple purchases to a fixed asset category.
Note: this methodology involves treating the first payments as expenditure, and capitalising the asset with the last payment made. You may therefore need to do this more than once if the purchase of your asset happens across multiple financial years (so that at the end of the first year, you have shown the purchases to date as fixed asset purchases rather than expenditure).
Warning: You should only record purchases as fixed assets (by coding them to a fixed asset category rather than an expenditure category) if you want to capitalise them. Your organisation will have a policy for the threshold for this. Smaller purchases which you don't want to be capitalised should simply be coded as expenditure instead.
Step 1: Set up your categories
You will need an expenditure category and a fixed asset category. You can set these up in your settings screen using the options highlighted below:
Step 2: Record your initial payments as expenditure
This is the easiest step! When you receive an invoice from your supplier, upload it as an Invoice to Pay from the purchases screen, as you would with any other supplier invoice. Record it to an expenditure category, and make the payment due.
Step 3: Make the last payment and capitalise the asset
When it comes to making the last payment, the process is slightly different as you want to capitalise the asset for its full value, despite only making a payment for the last portion. In the example below, we are purchasing a PA system, for which the total purchase value is £9,500, but £7,300 has already been paid. There is therefore a further £2,200 to pay in this invoice.
Firstly, raise another Invoice to Pay as in step 2, and fill in the 'Invoice Details' section as usual.
Next, under 'Budget Details', insert an additional line using the Add Line button, so there are two lines for data input.
In the first line, choose the fund and cateogry to which you've coded your initial payments (you can create multiple lines if these are in more than one place), and enter the negative reciprocal value of the amount spent to date. In this example, that's £7,300 so we've entered -7,300.
In the second line, choose a Fixed Asset Category and record the purchase of the whole asset for its total purchase value.
The net sum of these lines will then be the amount left to pay - in this example, this is £9,500 - £7,300 = £2,200
Top Tip: Fixed Asset categories are at the bottom of the category dropdown list.
Submit this invoice payment as usual for receipt check, approval, and payment.
Step 4: Check your expenditure category
The expenditure category to which you coded the initial payments should now have a balance of £0 (if it's only been used for this purchase).
Step 5: Set up the asset in your Fixed Assets Register
Your Fixed Asset will now appear on the Fixed Assets Register in ExpensePlus. Click the + icon to the right-hand side to enter depreciation (which will be coded to an expenditure category).
To help you better understand the Fixed Assets module as a whole, please visit the module overview page here.