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Creating and depreciating an asset

When you purchase a business asset — like a new display case for $4,800 — here's how to set it up in CloudFFL OS so depreciation is tracked automatically.

Step by step

  1. Go to Accounting → Accounting → Assets (or Accounting → Assets depending on your menu layout).
  2. Click New.
  3. Fill in the asset details:
    • Asset Name — a descriptive name like "Retail Display Case - Main Floor"
    • Original Value — the purchase price ($4,800.00)
    • Acquisition Date — the date you purchased it
    • Asset Account — the account where the asset value is held (e.g., "Furniture and Fixtures")
    • Depreciation Account — the expense account for monthly depreciation charges (e.g., "Depreciation Expense")
    • Journal — the journal where depreciation entries are posted (typically "Miscellaneous")
  4. Set the depreciation parameters:
    • Method — Straight Line is the most common for small businesses. It divides the cost equally over the useful life.
    • Duration — the number of months (e.g., 84 months for 7 years)
    • Residual Value — what the asset will be worth at the end of its life. For most fixtures, this is $0. For vehicles, you might set a residual value.
  5. Click Confirm to activate the asset.

What happens next

Once confirmed, CloudFFL OS:

  • Creates a depreciation schedule — a list of all future monthly entries
  • Each month, posts a depreciation entry automatically (e.g., $4,800 ÷ 84 months = $57.14/month)
  • Reduces the book value of the asset by that amount each period

You can view the depreciation schedule on the asset record. Each line shows the date, the depreciation amount, and the remaining book value.

Example: $4,800 display case over 7 years

MonthDepreciationRemaining Value
Month 1$57.14$4,742.86
Month 2$57.14$4,685.72
Month 12$57.14$4,114.32
Month 84$57.14$0.00

You don't need to do anything each month. Once the asset is set up, CloudFFL OS posts the depreciation entries automatically. They show up in your P&L as a depreciation expense and reduce the asset value on your balance sheet. Your monthly close just got one less manual task.

Creating an asset from a vendor bill

If you purchased the asset through a vendor bill (which you should for proper record-keeping):

  1. Record the vendor bill as usual.
  2. On the bill line, set the Account to your asset account (e.g., "Furniture and Fixtures") instead of an expense account.
  3. After confirming the bill, go to Assets and create the asset referencing the purchase.
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