NetSuite Fixed Asset Management: A Step-by-Step Guide

Did you know that managing your company’s fixed assets can be a game-changer for your profitability? It’s not just about keeping track of equipment and buildings—it’s about making smart decisions that drive growth and profitability. An effective approach to asset management ensures that your resources work for you, not against you. Let’s dive into how this strategy can take your business to the next level! 

 

Introduction:

In the dynamic landscape of business operations, managing assets effectively is essential for sustaining both financial stability and operational efficiency. Fixed assets—such as buildings, machinery, and equipment—are critical long-term resources that impact a company’s financial health. Proper management of these assets helps minimize downtime, reduces unnecessary costs, and enables smarter decision-making for future investments, all of which contribute to long-term profitability and success.

 

What is a Fixed Asset?

A fixed asset is a long-lasting, tangible item that a business uses in its regular operations to generate income. These assets are not meant to be sold or quickly converted into cash within a year. Examples of fixed assets are properties, industrial equipment, electronic devices, and transportation vehicles. Unlike current assets like inventory or receivables, fixed assets depreciate over time due to usage and aging, which is factored into financial reporting. Depreciation helps businesses account for the asset’s gradual loss in value, enabling more accurate financial statements and more efficient resource allocation over time.

Why Fixed Asset Management is Crucial?

Managing fixed assets involves monitoring the entire life cycle of these resources—from acquisition to retirement. Fixed asset management includes the following essential steps:

• Acquisition: Recording the purchase of the asset and adding it to the company’s records.
• Depreciation: Distributing the cost of an asset across its useful life as an expense.
• Revaluation: Updating the asset’s recorded value to match its present market worth.
• Maintenance: Ensuring the asset remains operational and in good condition.
• Disposal: Properly removing the assets from the company’s books when it’s no longer useful.

Efficient fixed asset management ensures that companies can keep track of their resources, comply with accounting standards, and make informed decisions about future investments and asset usage.

 

NetSuite Fixed Assets Management SuiteApp

NetSuite offers a powerful solution for managing fixed assets through its Fixed Assets Management SuiteApp. This app provides businesses with a streamlined process for tracking and handling their assets, from acquisition to disposal. This is how it simplifies the process of managing assets:

• Automation: Reduces manual tasks by automating the asset management process.
• Integration: Connects asset management directly with core financial systems for seamless tracking.
• Custom Depreciation Schedules: Provides flexibility in defining depreciation schedules based on business needs.
• Comprehensive Reporting: Generates detailed reports on asset performance, depreciation, and value.
• Lifecycle Management: Tracks each asset’s journey, from its purchase to its disposal.

 

Setting Up Fixed Asset Management in NetSuite

Before you begin, ensure that your NetSuite account is configured correctly for fixed asset management. Here's how to enable the necessary features:

• Head over to Setup -> Company -> Enable Features.
• Within the SuiteCloud section, enable the following features:
  • Custom Records
  • Custom Transactions
  • Client SuiteScript
  • Server SuiteScript

Enabling these features will allow you to track and manage assets efficiently within NetSuite.

 

Installing the Fixed Assets Management SuiteApp

Follow these steps to install the Fixed Assets Management SuiteApp in NetSuite:

• Head over to Customization -> SuiteBundler -> Search & Install Bundles.
• In the search bar, look for the Fixed Assets Management bundle, or use the Bundle ID 508242.
• If you already have the bundle (ID 285767) installed, you don’t need to install the bundle (ID 508242).

 

This SuiteApp will enhance your asset tracking capabilities, making the process more efficient.

Creating Asset Types

Asset types define the different categories of assets within your system. They determine how assets are grouped and tracked in reports. Here’s how to create a new asset type:

• Head over to Fixed Assets -> Setup -> Asset Types -> New.
• Fill in the required details:
  • Name: Choose a descriptive name for the asset (e.g., "Office Equipment").
  • Description: Provide a brief description of the asset type.
  • Accounting Method: Pick the default depreciation method for the specified asset type.
  • Residual Percentage: Define the expected value of the asset at the end of its useful life.
• Once you have entered all the required details, click Save to finalize the creation of the asset type.

 

Asset types allow you to customize the handling of different categories of assets, making it easier to manage them over time.

Setting Up Depreciation Methods

In NetSuite, depreciation methods define how the value of an asset is expensed over its useful life. Apply the following steps to establish a new depreciation method:     

• Head over to Fixed Assets -> Setup -> Depreciation Methods -> New.
• Enter the following information:
  • Name: Give the depreciation method a name.
  • Description: Provide a brief explanation of the depreciation method.
  • Depreciation Period: Choose whether depreciation will be calculated monthly, annually, or through other methods such as "Annual Depreciation with Monthly Posting."

Depreciation methods allow businesses to account for the loss in value of their assets accurately and consistently.

 

Adding a New Asset Record

These steps will guide you in adding a new asset to your system:

• Head over to Fixed Assets -> Lists -> Assets -> New.
• Enter the necessary details for the asset:
  • Name: Enter a descriptive title for the asset.
  • Asset Description: Enter a concise overview of the asset type
  • Asset Serial Number: Assign a unique serial number for identification.
  • Asset Type: Choose the relevant asset category from your pre-configured options.
  • Asset Original Cost: Provide the purchase cost of the asset.
  • Depreciation Method: Choose how the asset will depreciate (e.g., Straight-Line, Declining Balance).

After entering all the information, click Save to create the asset record.

Real-Life Use Case:

Background:

Let XYZ Pvt Ltd, a growing tech company, needed an efficient system to manage its assets, including laptops, office furniture, coffee machines, computers, and servers. Manual tracking through spreadsheets had become inefficient and error prone.

Solution: NetSuite Fixed Asset Management SuiteApp

The company implemented NetSuite’s Fixed Asset Management SuiteApp to streamline asset tracking and management.

Steps Taken:

• Asset Categorization: XYZ Pvt Ltd set up asset types such as "Laptops," "Office Furniture," "Coffee Machines," "Computers," and "Servers." Each category was assigned appropriate depreciation methods.
• Depreciation Methods:
  • Laptops and Computers: Depreciated using the Declining Balance Method, reflecting rapid value loss due to technological advancements.
  • Office Furniture and Coffee Machines: Used the Straight-Line Method, reflecting steady, predictable depreciation.
• Automated Tracking: NetSuite automated asset tracking, reducing manual errors and linking asset data directly with financial reports.
• Lifecycle Management: The company was able to track each asset from acquisition to disposal, ensuring accurate valuation and timely disposal of outdated equipment.

Benefits:

• Efficiency: Automation of processes helps save time and minimize the likelihood of human mistakes.
• Informed Decisions: Real-time reporting helped in deciding when to replace or maintain assets.
• Compliance: Accurate records ensure compliance with accounting standards.
• Cost Savings: By accurately tracking asset depreciation and maintenance schedules, XYZ Pvt Ltd was able to extend the lifespan of its equipment and avoid unnecessary purchases.

 

Conclusion:

Effective fixed asset management is essential for businesses to optimize resources and maintain financial stability. By tracking assets throughout their lifecycle, companies can maximize returns, ensure compliance with accounting standards, and make informed decisions. Automation and accurate depreciation tracking streamline processes, reduce errors, and enhance operational efficiency. Integration with financial systems further improves accuracy and reporting. With the right tools, businesses can extend asset lifespans, lower maintenance costs, and achieve higher ROI. Ultimately, a robust fixed asset management strategy safeguards valuable resources and supports long-term growth, contributing to overall organizational success and financial health.