How to Set Up Depreciation in QuickBooks Online?

How to Set Up Depreciation in QuickBooks Online?

Once you set up the assets in QuickBooks Online, you may need to record the depreciation. This should be noted that QuickBooks Online does not depreciate the fixed asset automatically. Thus, you will have to track depreciation manually by using the journal entries. Please note that calculating the asset depreciation is not easy. You should ask for assistance from your accountant. For your convenience, we are writing how to set up depreciation in QuickBooks Online so that you can know the best ways to depreciate assets.

In this particular guide, you will learn how to depreciate an asset in QuickBooks Online in two different ways. In addition, we will highlight how you can record the depreciation by creating a Journal Entry. If required, you can depreciate the asset automatically in QuickBooks Online.

How to Add Depreciation in QuickBooks Online?

To add depreciation in QuickBooks Online, you can use two different ways. You can either go through the Chart of Account menu or Fixed Asset Item list. In the following discussion, we will talk about how to set up accumulated depreciation in QuickBooks Online using both methods. Let’s read ahead!

Set Up Depreciation using Chart of Accounts Menu

To get started, one has to create an account so that one can track depreciation. This can be done by going to the Settings menu. From there, you can select the Chart of Accounts, click the New button, select the Account Type and Detail Type. After that, you can name your account and save the details.

For knowing each step for how to depreciate an asset in QuickBooks Online, you can check out the following details:

  • Navigate to the “Settings” menu.
  • Then, click on the “Chart of Accounts” option.
  • Here, you can press the “New” button.
  • Now, choose the “Other Expense” option using the “Account Type” drop-down menu.
  • After this, go to the “Detail Type” drop-down menu and select the “Depreciation” option.
  • At this point, you can enter the name of your account.
  • Press the “Save and Close” button.

By following these steps, you can easily set up the depreciation for assets in QuickBooks Online. Once you are done creating the account, you can continue recording the depreciation.

Set Up Depreciation using Fixed Asset Manager

By using the Fixed Asset Manager, you can set up depreciation in QuickBooks Online. However, this method requires you to perform a series of steps. For instance, you need to add the Fixed Asset Item with the required details. Then, locate the Fixed Asset Manager to add the amount. Once done, you can export the Fixed Asset Items, import the Fixed Assets into Excel Fixed Asset Manager, and then choose the basis for Journal Entry Posting.

Let’s continue reading the following to know how to set up depreciation in QuickBooks Online using Fixed Asset Manager:

  • Launch “QuickBooks Desktop”.
  • Then, go to the “Lists” menu.
  • Click on the “Fixed Asset Item List” option.
  • Here, you can select the “Item” button.
  • Press the “New” button.
  • Now, you can enter the necessary details.
  • Press the “OK” button.

When the new item is closed, you can find the Fixed Asset Manager and pursue the following steps:

  • In the “Asset Synchronization Log” window, click the “OK” button.
  • Then, select the “Schedule” option.
  • Click twice on the created asset.
  • When you see the data details, find the “Federal” column.
  • Now, you can scroll down to the rows that state proper depreciation.
  • After this, select the “Amount” button.
  • Here, you can verify and make the required changes. The changes may include the State, ACE, Book, and AMT columns.
  • Then, press the “Save” button.

After performing these steps, you can export the fixed asset items. For this, you have to prepare the file with a form identical to QB Desktop. Have a look at the following steps to understand each step:

  • First of all, create the “Fixed Asset Manager Assets”.
  • Then, import the “QuickBooks Fixed Asset Manager” details to the “Fixed Asset Modules”.
  • Now, you need to find the “Fixed Asset Manager” file menu.
  • Press the “Export” button.
  • Here, you can find the file name “Export ProSeries Tax Client”.
  • Navigate to the “File” menu.
  • Once selected the client file, you can click on the “Export” button.
  • Click the “OK” button.
  • Find the “ProSeries” in order to show the status of your import.

List of ProSeries form 4562 Amortization as well as the Depreciation Schedule contains your assets. After performing these steps, you can import Fixed Assets into Excel Fixed Asset Manager. Follow these steps to know more:

  • Open “Fixed Asset Manager”.
  • Then, go to the “File” menu.
  • Click the “Import” button from the list of options.
  • Select the “CSV” file.

Later, you can follow the instructions given on your screen to complete the procedure. Now, you can select the basis for the journal entry posting. To do so, you can go through the following steps:

  • Launch “Fixed Asset Manager”.
  • Then, click on the “QuickBooks” option.
  • Here, you need to select the “Post Journal Entry” to “QuickBooks”.
  • The “Option basic” can be used to post menus.
  • Press the selected posting basics located at the bottom of your screen.
  • Now, “Post the Journal Entry”.
  • Once done, move to the “General Ledger”.
  • To get started, turn your account to “Multiple Assets”.
  • Then, add or update the depreciation settings or mode.

This is how you can set up the depreciation in two different ways. Although the Chart of Account method is easier than the Fixed Asset Item list method, both perform differently.

How to Enter Depreciation in QuickBooks Online Automatically?

If you want QuickBooks to depreciate the asset automatically then you can use the Recurring feature. This will allow you to track the depreciation automatically. All you have to do is choose the Suitable asset account, enter the required details in the Information filling page, select the Recurring option, and save the template. To know how to set up depreciation in QuickBooks Online, you can pursue the following instructions:

  • Click on the “New” button.
  • Go to the “Account” column and choose the “Suitable asset account” from the options.
  • When you see the “Information filling” page, you can enter the necessary details.
  • Then, select the “Recurring” option.
  • Save the template to track the depreciation automatically.

By using these steps, you can set the account as recurring which means QuickBooks will automatically record the depreciation.

How to Record Depreciation in QuickBooks Online?

When you have an account to track the asset and depreciation, you can create the Journal Entry so that you can record the lost value. To create the Journal Entry, you are required to click on the New button, choose the asset account you wish to track, follow our guide to import journal entries in QuickBooks . Thereafter, you can enter the depreciated amount in a Credits section. After this, pick your Depreciation account and add the depreciation amount in a Debits section.

To know how to add accumulated depreciation in QuickBooks Online with step by step details, look for the following points:

  • Click on the “+New” button.
  • Select the “Journal Entry” option.
  • Here, you can choose the asset account on the first line by using the “Account” drop-down menu. Make sure you pick the asset account you wish to track the loan.
  • After this, you can go to the “Credit” column and add the depreciated amount.
  • Move to the second line and choose the “Depreciation” account you have created recently. You can use the “Account” drop-down menu to choose the account.
  • Once done, add the same depreciated amount. But this time, add the amount in the “Debits” column.
  • Press the “Save” button.

Now you have learned how to track depreciation in QuickBooks Online. As you save the details, the depreciation can be tracked easily using the Journal Entries in QuickBooks Online.

In a Nutshell

By adding the depreciation of assets, you can track them easily in QuickBooks Online. In this guide, we have already given you easy steps to set up the depreciation using Chart of Accounts and Fixed Asset Manager. Besides that, you can set the recurring feature for automatically recording the depreciation of assets. We hope you have understood how to set up depreciation in QuickBooks Online.

Do you want to set the recurring reminders for payment or customize the QuickBooks Online dashboard? Read the following guides to know more:

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