How to Run Depreciation in NetSuite

Are you struggling to properly account for asset depreciation in NetSuite? Worry no more, as this article will guide you through the steps of running depreciation in NetSuite. With accurate and timely depreciation calculations, you can ensure your financial records are up-to-date and in compliance with accounting standards. Let’s dive in!

What is Depreciation?

Depreciation is a term used in accounting to describe the gradual decrease in the value of an asset over time. It is a method used to allocate the cost of an asset over its useful life. Depreciation is crucial for businesses as it allows them to accurately reflect the value of their assets on their financial statements. By spreading the cost of an asset over its useful life, depreciation enables businesses to account for factors such as wear and tear, obsolescence, and other factors that may affect an asset’s value. Ultimately, depreciation helps businesses to track and manage their assets for financial reporting purposes.

The concept of depreciation has been around since ancient times, as it was used to account for the wear and tear of chariots in ancient Egypt. Over time, various methods of calculating depreciation have been developed, including the straight-line method, the declining balance method, and the units of production method. Nowadays, depreciation is an essential aspect of financial reporting and is utilized by businesses of all sizes and industries to accurately assess the value of their assets.

What is NetSuite?

NetSuite is a cloud-based business management software that offers a wide range of functionalities, including accounting, finance, inventory, and customer relationship management. It serves as a unified platform for businesses to streamline operations, increase efficiency, and make data-driven decisions.

With NetSuite, companies can automate processes, gain real-time visibility into their financials, and improve collaboration across departments. Whether you are a small startup or a large enterprise, NetSuite provides scalable solutions to cater to your specific business needs.

Interesting fact: In 2016, NetSuite was acquired by Oracle, further solidifying its position as a top cloud ERP provider.

How to Set Up Depreciation in NetSuite?

Properly tracking and managing depreciation is crucial for any business, and NetSuite offers a comprehensive solution for this task. In this section, we will discuss how to set up depreciation in NetSuite. This includes creating a depreciation schedule, selecting a depreciation method, and setting up a depreciation book. By following these steps, you can accurately and efficiently manage your assets’ depreciation within the NetSuite platform. Let’s dive in and explore the process of setting up depreciation in NetSuite.

1. Create Depreciation Schedule

To generate a depreciation schedule in NetSuite, simply follow these steps:

1. Access the NetSuite application and go to the ‘Fixed Assets’ section.
2. Click on ‘Depreciation Schedules’ and select the ‘New’ button to create a new schedule.
3. Enter all necessary details, including the name, start date, end date, and frequency of depreciation.
4. Choose the appropriate depreciation method, such as straight-line or reducing balance, based on your business needs.
5. Select the assets that should be included in this schedule from the asset list.
6. Specify any additional parameters, such as depreciation convention or bonus depreciation, if applicable.
7. Review the schedule details and save it to generate the depreciation entries for the specified time period.
8. Once saved, run the depreciation process to calculate and post the depreciation amounts for the selected assets.

By following these steps, you can easily create a depreciation schedule in NetSuite to track the value of your assets over time.

2. Set Up Depreciation Method

To set up a depreciation method in NetSuite, follow these steps:

1. Navigate to the NetSuite homepage and log in to your account.
2. Go to the Setup menu and click on the Accounting tab.
3. Under the Assets section, select Depreciation Methods.
4. Click on the New Depreciation Method button.
5. Enter a unique ID and a descriptive name for the depreciation method.
6. Select the applicable depreciation type, such as straight-line, declining balance, or units of production.
7. Specify the useful life of the asset and the depreciation start date.
8. Choose the frequency of depreciation, such as monthly, quarterly, or annually.
9. Configure any additional settings or options based on your business requirements.
10. Save the 2. Set Up Depreciation Method and ensure it is properly assigned to the relevant assets.

3. Set Up Depreciation Book

Setting up a depreciation book in NetSuite involves the following steps:

1. Create a new depreciation book in the NetSuite system.
2. Specify the book’s name, currency, and accounting method.
3. Set Up Depreciation Book: Define the asset classes and sub-classes for the depreciation book.
4. Assign depreciation methods to the asset classes.
5. Set up the depreciation rules, such as useful life and salvage value, for each asset class.
6. Configure other book-specific settings, such as asset numbering and tax options.
7. Review and save the depreciation book settings.

How to Run Depreciation in NetSuite?

As a NetSuite user, understanding how to run depreciation is crucial for accurate financial reporting and compliance. In this section, we will discuss the two methods for running depreciation in NetSuite: manual and automatic. By the end, you will have a clear understanding of how to properly run depreciation in your NetSuite account, ensuring accurate and timely financial information. Let’s dive into the details of each method and how it can benefit your business.

1. Manually Run Depreciation

Manually running depreciation in NetSuite involves following a few simple steps:

1. Go to the Asset Management module in NetSuite.
2. Select the desired asset or assets for manual depreciation.
3. Choose the option to manually run depreciation.
4. Enter the desired depreciation date and any other relevant details.
5. Click on the “Run Depreciation” button.

Tip: Before manually running depreciation, be sure to ensure that all necessary data is accurate and up-to-date to avoid any errors in the calculations.

Remember, manually running depreciation in NetSuite allows for more control and flexibility in managing your assets.

2. Schedule Depreciation to Run Automatically

To automatically schedule depreciation in NetSuite, simply follow these steps:

1. Go to the NetSuite Dashboard and navigate to the Fixed Assets module.
2. Select the “Depreciation” tab and click on “Schedules”.
3. Click on the “New” button to create a new depreciation schedule.
4. Choose the desired frequency for depreciation calculation, such as monthly, quarterly, or annually.
5. Set the start date and end date for the depreciation schedule.
6. Specify any additional criteria, such as the depreciation method and book.
7. Enable the “Automatic” option to schedule the depreciation to run automatically.
8. Save the schedule and NetSuite will automatically calculate and record depreciation according to the specified frequency.

By scheduling depreciation to run automatically, you can ensure accurate and timely calculations, streamline asset management, and easily generate financial reports. This feature eliminates the need for manual intervention and reduces the risk of errors. Take advantage of this option to save time and improve efficiency in managing your assets.

What Are the Benefits of Running Depreciation in NetSuite?

Running depreciation in NetSuite can provide businesses with a multitude of benefits. In this section, we will discuss the advantages of utilizing NetSuite for depreciation calculations. From ensuring accuracy and timeliness to streamlining asset management and simplifying financial reporting, running depreciation in NetSuite can greatly improve the efficiency and effectiveness of a company’s financial operations. Let’s take a closer look at each of these benefits and how they can positively impact your business.

1. Accurate and Timely Depreciation Calculations

Accurate and timely depreciation calculations are crucial for financial management. To ensure precision, follow these steps:

1. Collect Asset Information: Gather all necessary data, such as asset cost, useful life, and salvage value.
2. Select Depreciation Method: Choose between straight-line, declining balance, or units of production to calculate depreciation.
3. Calculate Depreciation Expense: Determine annual depreciation expense by applying the chosen method.
4. Allocate Depreciation: Assign the expense to appropriate accounting periods based on the asset’s usage.
5. Update Asset Records: Adjust the asset’s book value by subtracting accumulated depreciation.
6. Verify Accuracy: Review calculations and cross-reference with financial statements for consistency.
7. Document: Maintain detailed records of depreciation calculations for reference and audit purposes.

By following these steps, businesses can ensure accurate and timely depreciation calculations in their NetSuite system.

2. Streamlined Asset Management

Efficient financial operations in NetSuite rely heavily on streamlined asset management. Follow these steps to achieve this:

1. Track assets: Take advantage of NetSuite’s asset management module to record and monitor all of your company’s assets.
2. Create asset records: Enter all necessary information for each asset, including purchase date, cost, useful life, and depreciation method.
3. Automate depreciation: Set up automated calculations for depreciation based on your chosen method and schedule.
4. Manage asset disposal: When an asset is sold or disposed of, update its record and track the financial impact.
5. Generate reports: Utilize NetSuite’s reporting capabilities to gain insights on asset utilization, depreciation expense, and upcoming expirations.

3. Easy Financial Reporting

Easy financial reporting in NetSuite simplifies the process of generating accurate and timely reports. To achieve this, follow these steps:

1. Create a customized financial report template based on your organization’s specific requirements.
2. Choose the relevant accounts and dimensions to include in the report.
3. Apply filters to refine the data and focus on specific criteria.
4. Group and summarize data based on your reporting needs.
5. Save the report template for future use.
6. Schedule the report to run automatically at desired intervals.
7. Export the report in various formats, such as Excel or PDF.

This streamlined process ensures that Easy Financial Reporting in NetSuite is easily accessible, accurate, and can be generated on demand or scheduled for regular delivery.

What Are the Common Challenges with Running Depreciation in NetSuite?

As a NetSuite user, you may have encountered difficulties when it comes to running depreciation for your assets. In this section, we will discuss the common challenges that users face while running depreciation in NetSuite. From complex asset structures to manual data entry errors and limited customization options, we’ll cover the potential roadblocks that can arise in the process. By identifying these challenges, we can better understand how to overcome them and streamline the depreciation process in NetSuite.

1. Complex Asset Structures

Complex asset structures can be challenging to manage when calculating depreciation in NetSuite. To overcome these challenges, follow these steps:

1. Ensure assets are correctly identified and categorized based on their structure and components.
2. Create a comprehensive asset hierarchy, taking into account parent-child relationships.
3. Assign appropriate asset classes and sub-classes for accurate depreciation calculations.
4. Utilize custom fields to capture any additional asset information.
5. Regularly review and update asset structures as changes occur.

To simplify this process, consider utilizing NetSuite’s customization options, such as custom forms and workflows. Providing regular training and documentation for users can also aid in effectively managing complex asset structures.

2. Manual Data Entry Errors

Manual data entry errors can have a significant impact on the accuracy of depreciation calculations in NetSuite. To minimize these errors, follow these steps:

1. Double-check all data entered into the system for accuracy.
2. Use validation rules to ensure that manual data entry is done correctly.
3. Regularly review and reconcile depreciation schedules to identify any discrepancies.
4. Implement user training and education programs to improve manual data entry skills.
5. Consider using data import tools to automate the process and reduce the risk of manual errors.

Pro-tip: Regularly auditing your depreciation data and performing reconciliations can help catch and correct any manual data entry errors, ensuring accurate financial reporting.

3. Limited Customization Options

Customization options for running depreciation in NetSuite may be limited, creating challenges for some businesses. However, there are still steps that can be taken to improve the process. Here are a few suggestions to consider:

1. Identify your specific customization needs.
2. Explore the customization options available within NetSuite.
3. Consult with a NetSuite expert or developer to find workarounds or customizations that can address your needs.
4. Consider integrating third-party applications or plugins that offer additional customization capabilities.
5. Regularly review NetSuite updates and enhancements to see if any new customization options have become available.

Fact: NetSuite’s extensive network of partners and developers provides a wide range of customizations and integrations to cater to specific business requirements.