Companies commonly need to construct a Fixed Asset over a span of time (e.g., Building / Plant & Machinery) and subsequently wish to monitor the billing components for a specific job. Once the asset is fully developed, they desire to recognize it within the Property, Plant & Equipment and begin recording its depreciation. There are various methods to handle this need within NetSuite, and I will outline the steps that can be taken to facilitate the management of Capital Work In Progress within the Fixed Assets Management Module.
Steps to Oversee Capital Work In Progress in NetSuite
Step 1: Setting Up the Capital Work In Progress Account
Navigate to Lists > Accounting > Accounts > New and create an account by entering information such as Account Number, Account Name, Account Type, and Subsidiary details as shown in the screenshot below.
Step 2: Create Non-Inventory Items for Components Required for Capital Work In Progress
Go to Lists > Accounting > Items > New and establish Non-Inventory Item for Purchase. Enter details including Name, Unit of Measure, and specify the Expense Account as ‘Capital Work In Progress’ created in Step 1. Under the Preferences tab, ensure the checkbox for ‘Can be Fulfilled/Received’ is set to True based on your business requirements.
Step 3: Create Vendor Bills for Component Purchases
Users can either directly create a Vendor Bill for the acquisition of components required for the asset development, or they can go through the Purchase Order process. For simplicity, I will focus on creating Vendor Bills. To create the Vendor Bill, navigate to Transactions > Payables > Enter Bills, and fill in details such as Vendor, Memo (indicating the Job Number), and Item (as established in Step 1). All bills pertaining to Capital Work In Progress should be recorded in the same manner as outlined in this step.
Step 4: Generate the Saved Search Report to Monitor Capital Work In Progress
Create a saved search report to track the Capital Work In Progress against a specific Job. The report will yield results for costs accumulated against the project after applying the filter for that Job.
Step 5: Capitalize the Asset When Ready
Once the asset is prepared for capitalization, the user may proceed to post the corresponding general entry in the system that reflects the accumulated amount for that Job (refer to Step 4).
Step 6: Use the Entry for Asset Proposal Screen
After entering the above journal entry, it will be accessible for the Asset Proposal Screen to generate the Fixed Asset. This entry will be linked to Fixed Assets, allowing for traceability of the history of components used in the asset’s development by searching the memo of the journal entry against the saved search report outlined in Step 4.
