Asset management is the process of managing or organizing the assets of a company by proper tracking, maintaining and disposing, or selling off of the asset. The task of the asset management team is to manage the operations cost-effectively. Moreover, Asset management will include the management of machines which in turn includes maintenance and handling of equipment failure. A company may have to handle different types of assets including current assets, non-current assets, and fixed assets.
Let us see how to manage assets using Odoo 14 accounting.
For this, we can go to the Accounting module and check the Accounting Menu. Below this menu, we can find a segment named Management where the Assets management menu will be described. We can click open the Assets menu to create and manage the assets of the company.
In Odoo there are different ways to create assets:
1. Create assets directly from Assets
2. Create assets using vendor bills
In regards to the Asset creation from vendor bills, once the bills are created and confirmed then the Assets will be created automatically in Odoo. However, in any form of asset creation before creating Assets we should configure the Asset models
Configuring Asset Models
The configurations of the Asset Models can be done using the configuration menu. Here we can go to the Management Segment and click on the Asset Models. Moreover, we can use Asset Models to manage the Asset Entries. That means we can set the depreciation of Asset value for a particular period. We can either use an Asset model for a single Asset or use the model to manage multiple Assets.
Create and Manage Asset models
We can create Asset models and for each Asset, we can select the model further then the depreciation method has to be selected. In regards to Asset depreciation we can find three depreciation methods here:
1. Straight Line - Depreciation is calculated in a linear way here. That means we calculate the total depreciation value and it is divided by the number of years. So the depreciation amount will be equal every year. The graph of this depreciation model will look like a straight line graph.
Moreover, we can find a column to add duration.
2. Declining - If the Asset is set to be functioning in the Declining depreciation we can set a digressive factor when selecting this option. Further, then we have to multiply the total depreciation amount with the declining factor, this process has to be repeated until the duration of the depreciation of the Asset. Under the depreciation table of the Asset, we can find the declining factor and duration of the respective depreciation.
3. Declining and then the straight line - Upon choosing the depreciation as Declining and then straight line we get a combination of straight line and declining depreciation. Moreover, in this case, the depreciation value for the first year will be calculated based on the Declining method and the amount for next year will be decided by comparing the values we get while using a straight line and declining method.
Prorata Temporis
This field helps us to decide from which date the depreciation has to be calculated. It could be either from the date of creation of the asset where the depreciation start date by the Prorata Temporis is assigned as the date of purchase of the Asset or the date of acquiring it. On the other way, you can set the depreciation rate as any date for the depreciation to start no matter which Fiscal period or financial year you are functioning with. If the depreciation starts by the first day of the month then the depreciation factor is applied for 30 or 31 days to the Asset value. However, if the depreciation date starts after the month has started let say the 15th or 16th day of the month then the depreciation factor is applied for only half of the month starting from the day of the defined the depreciation
Accounting
In regards to the Accounting management of the Assets, we have a dedicated Accounting section where the Finance management aspects can be described in detail. Moreover, we can add the following fields here.
Fixed Asset Account: The account used for the purchasing of the assets can be documented using this account.
Depreciation Account: The Depreciation Account is used to record the depreciation of the value of the Asset.
Expense Account: This can help us to enter the periodic expense entries in regards to the Asset.
Journal: We can add the journal here and define the journal entries.
Make Changes in Fixed Asset Account
We can also make changes in fixed asset accounts from the Chart of Accounts by using the SETUP and EDIT option and the form depicted to you, we can find Asset Options. These options will help us to automate the assets. Moreover, we have three options that are available here No, Create in Draft and Create and Validate. Furthermore, we have to choose the Create and Validate Option here which will depict you with more fields such as;
Manage Items- Enabling this we will be able to manage multiple assets based on the quantity mentioned in the bill line.
Asset Model- we have to select the asset model from the drop-down menu.
Finally, Save it and we have completed the creation and the modification of the Fixed Asset Account.
Vendor bill
Our next task is to create a vendor bill for the product. Let me describe the operation of the Vendor Bills through an example, we can choose the product like a computer and then select the previously created Computer Account which is a fixed account for the product. Moreover, we can add the quantity of Computers and the account will remain the same for all the products. In addition, we can add the quantity and price as well. Further, the next step is to confirm the bill and after confirming we get the Asset icon on the top.
Moreover, One asset can be found there, upon clicking on it you can find the Asset Name, First Depreciation Date, Book Value, Depreciable Value, Currency, Status, and many more aspects of the Asset.
Asset Value
We can find the asset values including the original value and the acquisition date in this form.
It is when Assets are valued for calculating the tax.
Depreciation Method
This is the Method and Duration and the Date of commencement of depreciation.
Current Value
We can find Currency, Not depreciable value, Depreciable Value, Book Value, and many other options. We can change the Depreciable Value by changing the bill to draft using SET to DRAFT. Moreover, we can check the depreciation status after every year that appears automatically on the depreciation board. Furthermore, under the related Purchase menu, we can find the purchase details of the product and you can confirm the Depreciation Value of it to post the entries automatically. Moreover, the entries will be posted automatically on the date of depreciation.
Modify Depreciation
You also have the provision to Modify Depreciation by clicking the respective tab. Additionally, we can add modification reasons and add new values and click the Modify option that is available.
How to sell Assets or Dispose of Assets?
You can sell or dispose of the Asset from the Assets menu. And upon the sale is conducted to a customer you can send the Customer Invoice and add Loss Account
How to create new Assets from the Assets menu of Odoo?
Fo the creation of new Assets you can follow the path
Odoo Accounting > Assets > CreateHere, we can add products and define the Assets and other values based on them.
For the creation of an Asset from the Purchase bill;
You can follow the path Accounting > Journal > Purchase. Then you have to initially select a bill from the list of bills defined. Further, then we will get an option to select the action, and here, we can select to create Assets.
Watch Video:
These are the different ways to create Assets and manage Depreciation Values of the Assets in operation.