How to create a Fixed Asset

What is Fixed Asset?
Fixed assets are like the long-term helpers in your business. They're not directly turned into products you sell, but they're essential for making those products. They're like valuable tools that you invest in to use for a long time. 

They help you make money over and over again, even though they might a little worn around the edges over time. Just like you wouldn't lists a loaf of bread as a fixed asset in your bakery, you wouldn't list things like office supplies or short-term investments as fixed assets in your business.



How to create a Fixed Asset in Biztory?

1. Go to Accounting and click Fixed Asset.

2. Click on Add New.

3. Fill up the form.
4. If you don't have an asset category, you are able to create one here.

5. You will encounter a create new Asset Category popup, and fill in the details.

6. Click Save, and you successfully created a Fixed Asset. 

What is Depreciation?

In accounting, depreciation is a way to track this decrease in value for fixed assets like ovens, vehicles, computers, and buildings. It's not like the oven literally loses weight or shrinks, but its ability to help your business make money gets weaker.

How does Depreciation works?

1. Estimate the oven's useful life: How long do you think it will be a valuable tool in your bakery? Maybe 5 years, maybe 10? This is called depreciation period.
   
   
2. Calculate the depreciation expense: Divide the oven's original cost by it's depreciation period. This tells you how much of its value "gets used up" each year. For example, if the oven costs $1,000 and has a 5-year depreciation period, then each year, you would record a depreciation expense of $200.
   
   
3. Reduce the oven's book value: Every year, subtract the depreciation expense from the oven's original cost. This gives you the oven's book value, which is how much it's worth according to accounting records.

So, even though your oven is still physically there, its value on the balance sheet (your business's financial report) keeps going down as it depreciates. This is important because it gives a more accurate picture of your business's financial health. It wouldn't be right to keep listing the oven as its original $1,000 cost even though it's not worth that much anymore.

How to run Depreciation in Biztory?

1. Click on Run Depreciation 

2. Choose the purchase date of your fixed assets in this date field.

3. Choose the month on how long do you want to run the depreciation.

4. Click Preview and you'll see the list of your Fixed Asset on that Purchase Date.

5. Click Confirm, and you successfully run your Depreciation.

How to read Fixed Asset Report in Biztory

1. Click on Report on the menu tab and click on View More.

2. In the Report Hub, you can search up Fixed Asset Report and click on it.