Fixed Assets

I set up Fixed Assets in Business Central like a man walking barefoot across a floor full of Lego. There’re so many things to remember I nearly always painfully trip up.

Having said that, the first time I did it, it took me nearly a week. This time it was less than a day. There’s something to be said for repeating a task until you can’t get it wrong.

Here are the big bits of Lego that you might want to avoid.

There are sooo many things to set up before you can do anything fun like load the assets and transactional data. Posting Groups are always the obvious thing so start there. Lots of companies will have separate GL codes for different types of FA. I’ve always set up a Posting Group per FA Subclass Code meaning the two codes will be the same. Like all Posting Setups the FA one looks complicated but (depending on your client’s Chart of Accounts) it can be pretty straightforward

You could waltz off now and load the Assets but don’t. Finish off setting stuff up otherwise you’ll end up stumbling around going back and forth. Your check list looks like this:

  • Depreciation Book
  • No. Series
  • FA GL Journal
  • FA Journal
  • FA Journal Setup

Deprecation Books let you establish different methods of depreciation. Should you need to you can have more than one per each Asset. I’ve never encountered a situation where it was necessary, so I normally set up a single one called COMPANY. There’s a ton of stuff that you could use for fine tuning here and it’s worth spending some time checking it all out. My go-to settings are

Default Final Rounding Amount is the amount you’re prepared to allow BC to scoop into the final depreciation so as not to leave small amounts left to be depreciated in the final depreciation of the Asset. With these settings I’ll leave anything over £10 to be depreciated next time. However, my current client owns a lot of expensive plant and so I’d set theirs much higher as the sums involved monthly are much higher.

You’ll notice that all the GL Integration settings are off. This is crucial when loading all of the opening balances. If you’re intending for all of your FA postings to simultaneously post to the GL you’ll switch these back on before you post your first depreciation. Similarly, the Allow Changes in Depr. Fields is switched on. It’s almost a nailed on certainty that there will some issues with the dates supplied by your client and you’ll need to be able to change things.

You’ll need a No. Series for Fixed Assets and for FA Journals. If you’re using the original FA’s numbers from the legacy system set the number series to Manual Nos. and uncheck the Default Nos. (but switch back afterwards)

The two Journal templates will need to be set up but don’t panic this is just the same as setting up other journal templates. However…there’s one other thing you’ll need to do if you want to avoid this message:

This weird little blighter is hidden deep. Don’t use the Tell Me box to search for it. That’s exactly what they’re expecting you to do. No, you have to go and look here

You have to say which journal templates you’re going to use where. If you don’t do this, literally nothing you try to do that involves posting a journal will work and it’ll be horribly frustrating.

OK. You can load stuff now. You’re going to need two Configuration Worksheets:

  • Fixed Assets 5600
  • FA Depreciation Book 5612

The first is nice and easy. You’re just loading the basic details of the Fixed Assets, Number, Description. You can add dimensions here too. And don’t forget the Posting Group. If you’ve followed my advice from earlier this’ll be the same as the FA Subclass.

The FA Depreciation book is a different matter. This is where you dictate how the Asset will be depreciated. You can decide on the depreciation method. I’m not going to lie: I’ve only ever used Straight-Line and Manual. Straight-Line does what it says: if you’ve got £1200 to depreciate over a year, it’ll depreciate at £100 a month. Manual, on the other hand, does what it says. It skips the depreciation and allows you to set the amount yourself. If you have assets that don’t need to be depreciated (Land is a common one), use Manual as the depreciation method.

You’ll also add the acquisition date (when the asset was bought), the Depreciation Starting Date and Ending Date. This is where the exercise can sometimes go awry when you’re doing this for a client using data from their legacy system. You need the Start and end date so that BC can calculate the number of depreciation months and years. Don’t be tempted to put these into your configuration worksheet: BC will ignore them and you’ll go mad loading and reloading the data to try to make them appear. Well…you do if you’re me anyway. My chronic inability to remember this is the reason for this blog post!

The trick is to do a bit of excel jiggery pokery to calculate the necessary end date. But watch out for leap years!

The Fixed Depr. Amount is there to save your bacon when the client’s dates and amounts don’t deliver the depreciation they are expecting. You can use this field to set the monthly depreciation to the required amount. You might have to go back and play with this after you’ve loaded everything and run your first depreciation.

Now it’s time to load the figures. You’re trying to get back to the NBV for each asset. You need to do this as three journals: Acquisition Costs, Depreciation to the last Year End, Depreciation YTD. If there’s been any Appreciation or Write-Downs it might be worth including them on a separate journal.

Once everything’s loaded and the NBV’s match the source data, run a test Calculate Depreciation to check everything’s in order. If it’s not check back – I bet it’s to do with dates. When those are fixed and you’re happy with the results remember to turn the GL Integrations back on and the Allow Changes in Depr. Fields OFF before posting your first round of Depreciation.

And there you have it. Fixed Assets for beginners (and me for the next time I do it)

Year End: Or…How to Close the Year and Close Income Statement

The process of Closing the Income Statement in Navision or Business Central (or Year End as most of us normal mortals call it) creates a journal which debits all the income and credits all the expenses in the P&L and creates a balancing entry in the Balance Sheet, usually the GL for P&L Brought Forward.

Year End can be run as many times as you like which enables you to run it both at your actual Year End and after posting adjustments following an audit. The screenshots here are all taken from NAV 2019 but the commands, menus and principles are all the same in Business Central.

Go to “Accounting Periods” and highlight the last month of the financial year you wish to close

  1. Click “Close Year”

  2. This locks the month end dates so that they cannot be altered

  1. Now go to “General Journals” and create a new template as shown

  2. In Chart of Accounts click on “Close Income Statement” and fill in the pop up as shown
  3. In the “Document No” field fill in a doc no that will distinguish your year end postings from your other General Ledger postings.
  4. In the “Retained Earnings Acc” field, click the dropdown and chose the General Ledger (GL) code you want to save your retained earnings to (usually P&L Brought Fwd)
  5. Under “Posting Description” number the field so that you can distinguish between journals if you need to run it more than once
  6. Populate the “Dimensions” field with your default dimensions again, to allow for ease of navigation later. It’s important to remember to do this as failure to do so can lead to reporting problems down the line.
  7. Click “OK” and this will create the journal.
  8. Check the journal and post.

The journal has now been posted and is dated with the year end date prefixed with a C

This denotes a date – in the example shown – between 24:00 on 29/10/17 and 00:00 on 30/10/17 and can be used in filters

Steps 1 – 4 only need to be performed once each year. If you come to do a second year end (say after audit adjustments have been posted) then you can start at step 5.

Note: it’s useful to make a note of the last G/L Entry number so you can easily identify entries that have been posted back into the year after this process has been run.