The Fixed Asset Management lifecycle consists of several key stages that ensure effective tracking and management of fixed assets from acquisition to disposal. Here’s a detailed overview of each phase:
1. Planning and Acquisition
- Needs Assessment: Determine the need for new assets based on business requirements.
- Budgeting: Allocate budget for asset acquisition.
- Vendor Selection: Identify and evaluate potential vendors.
- Purchase Order Creation: Generate purchase orders in NetSuite for approved assets.
2. Asset Creation
- Record Setup: Create fixed asset records in NetSuite, entering details like asset type, cost, acquisition date, location, and useful life.
- Categorization: Classify assets into appropriate categories (e.g., equipment, vehicles, furniture).
3. Deployment and Usage
- Asset Allocation: Assign assets to departments, locations, or employees for use.
- Tracking: Monitor asset usage, condition, and maintenance needs. Utilize tags or barcodes for easier tracking.
4. Maintenance and Management
- Regular Maintenance: Schedule and document maintenance activities to prolong asset life and efficiency.
- Performance Monitoring: Evaluate asset performance and return on investment (ROI).
5. Depreciation
- Depreciation Schedule: Set up and manage depreciation methods (e.g., straight-line, declining balance) in NetSuite.
- Monthly/Yearly Calculations: Automatically calculate and record depreciation expenses to the general ledger.
6. Revaluation and Impairment
- Revaluation: Periodically assess the fair market value of assets, making adjustments if necessary.
- Impairment Testing: Identify and record any impairments in asset value due to market changes or damage.
7. Disposal
- Disposal Planning: Decide on the method of disposal (sale, donation, scrapping).
- Record Disposal: Document the disposal transaction in NetSuite, calculating any gain or loss.
- Update Records: Remove disposed assets from the fixed asset register.
8. Reporting and Compliance
- Financial Reporting: Generate reports for financial statements, including asset lists, depreciation schedules, and disposal summaries.
- Regulatory Compliance: Ensure adherence to accounting standards and regulations related to fixed assets.
9. Review and Audit
- Internal Review: Conduct regular audits of fixed assets to verify existence, condition, and compliance with company policies.
- Adjustments: Make any necessary adjustments based on audit findings.
Benefits of Managing the Lifecycle
- Improved Asset Utilization: Efficient tracking leads to better resource management.
- Cost Savings: Timely maintenance and accurate depreciation help optimize costs.
- Enhanced Financial Reporting: Accurate records ensure reliable financial statements.