Introduction
Welcome to our guide on how to purchase a new asset using the Empress system. This feature can greatly enhance your business processes by allowing you to manage and track your assets more efficiently.
Introduction to Asset Purchasing in Empress
Purchasing a new asset in Empress means creating a record of a tangible or intangible item or resource that your business owns. This could be anything from a piece of equipment to a software license or even a patent. By tracking these assets in Empress, you can keep a record of their value, manage their use, and plan for their replacement or disposal.
Step-by-Step Guide to Purchasing a New Asset
Let’s dive into the process.
Step 1: Create an Asset Category
The first step is to create an Asset Category. This feature allows you to group similar assets together, making them easier to manage and track.
Step 2: Create a Related Item
Next, you’ll need to create a Related Item with the ‘Is Fixed Asset’ option enabled. This allows Empress to recognize that you’re creating a new asset.
Step 3: Enable ‘Auto Create Assets on Purchase’ (Optional)
For added convenience, you can enable the ‘Auto Create Assets on Purchase’ option. This will automatically create asset records when you make a purchase, saving you the extra step of creating them manually. But remember, this step is optional and can be skipped if you prefer to manually create your assets.
Step 4: Follow the Purchase Cycle
Now, follow the standard purchase cycle to initiate the purchase of your asset.
Step 5: Enter the Asset Location
When you’re receiving the item, make sure to enter the Asset Location in the Items table of the Purchase Receipt or Purchase Invoice. This will help you to keep track of where your assets are located.
Step 6: Submit a Purchase Receipt
Once you’ve received your asset, you’ll need to submit a Purchase Receipt. If you’ve enabled ‘Auto Create Assets on Purchase’, your asset records will be created automatically at this point. You can then enter any additional details about the asset manually from the Asset form.
Understanding Accounting Entries
When you submit the Receipt entry, accounting entries are automatically posted. The specifics of these entries depend on whether ‘Capital Work In Progress Accounting’ is enabled in the Asset Category of your purchased asset.
If this option is enabled, the capital work in progress (CWIP) account is debited, reflecting that the asset is not yet available for use. Once the asset is available, the CWIP account is credited and the corresponding asset account is debited.
If ‘Capital Work In Progress Accounting’ is disabled, the receipt entry will be made against the corresponding asset accounts set in the Asset Category.
Empress also uses a temporary account called “Asset Received But Not Billed”, which gets credited when a Purchase Receipt entry is submitted. This account is then debited or reversed upon submission of a Purchase Invoice.
Conclusion
Purchasing a new asset in Empress is a straightforward process that can greatly enhance your business’ asset management capabilities. By grouping assets into categories, automatically creating asset records, and tracking asset locations, you can manage your assets more efficiently and effectively.
For additional support or resources, please visit our help center or contact our support team.