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Posted June 20, 2025

FAQ: What's the process for managing fixed assets we have paid for but have not placed into service yet?

When you prepay for a fixed asset, but do not place it into service immediately, follow this process to ensure accurate accounting and fixed asset tracking:

1. Use a Prepaid Account
On the AP Invoice, use a prepaid expense account instead of a Fixed Asset account. This ensures no fixed asset is created prematurely.

2. Create the Fixed Asset
When the asset is actually placed into service, manually create the fixed asset record with the correct date. Follow the steps in Creating Fixed Asset to create the Fixed Asset.

3. Record a Journal Entry
Record a journal entry to move the amount from the prepaid account to the appropriate fixed asset account.