How to add equipment to your finance?

In business finance, assets are resources owned by the company that provide future economic benefits. Assets are essential to operations and are recorded on the balance sheet to reflect their value over time. They can be physical (like machinery) or non-physical (like patents), and are typically categorized as short-term or long-term depending on how long they are expected to benefit the business. To learn more about how assets are categorized, see the difference between long-term and current assets.

• Short-Term Assets (Current Assets): These are assets expected to be used, sold, or converted into cash within a year.
  
  Examples include: Cash, Inventory, and Prepaid expenses.

• Long-Term Assets (Fixed or Non-Current Assets): These are assets that provide value over multiple years and are not intended for immediate sale.
  
  Examples include: Buildings, Equipment, Vehicles, and Machinery.

Equipment purchased for business use (like manufacturing tools, computers, or office machines) is considered; long-term asset because it supports operations for several years. When you add equipment to your finance module, it is not just the purchase cost that matters, it’s also how that asset is depreciated over time.

For more information on selecting the useful life of a long-term asset, refer to the guide on Depreciation, Amortization, and Determining Asset Life.

Depreciation is the process of spreading the cost of an asset over its useful life.

i.e., if you purchase equipment for $10,000 with an expected life of 5 years and a salvage value (estimated resale value) of $1,000 (10%).

Your annual depreciation expense would be calculated as:

($10,000 - $1,000) ÷ 5 = $1,800 per year ($150 per Month)

This guide will take you through the steps to add equipment in your finance module, including how to enter its cost, set depreciation, and assign salvage value, ensuring accurate financial tracking.

Steps to Add Equipment:

1

Open your finance forecast module and go to the Working Capital section.

Under this tab, click on the Assets option to begin adding equipment.

2

Click on Add Asset to start entering the equipment details under an asset group.

3

A forecast form will pop up.

• Here, enter a suitable name like Equipment and Machinery.
• Select the asset type as Long Term, since equipment typically provides value over several years. Enable the toggle if the asset existed before your plan’s start date.

4

Choose how you want to enter the purchase amount: One-time purchase, Constant amount (recurring), Varying amounts over time.

Then enter the  amount paid and select the purchase month.

5

Define the  useful life of the asset in years and months (e.g., 5 years, 0 months).

You can also check Do not depreciate if you want to retain the full value without calculating depreciation.

Input the  salvage value (%) of the estimated value at the end of its useful life.

6

Choose whether you plan to  resell the asset after its useful life. Select Yes or No based on your intentions.

Then click on the  save.

7

Once saved, the system will generate a detailed forecast sheet for the asset, including: Capital investment, Depreciation, Accumulated depreciation, Resell values, and gains/losses (if applicable).

Properly adding equipment as a long-term asset in your finance module helps ensure your forecasts and reports are accurate and complete. From tracking depreciation to managing asset value over time, these steps are essential for better financial planning.