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Asset Accounts

Your company will have many different types of assets. Basically, assets are grouped into two main types:

  1. Current Assets
  2. Long-term Assets

Current Assets

Your current assets is also known as your short-term assets. These are assets that you can use at very short notice, for example your cash or bank accounts. Current assets are sub-grouped into:

  1. Cash and Bank Accounts
  2. Accounts Receivable
  3. Stocks (Inventory)
  4. Other Current Assets

Cash and Bank Deposits

Cash and bank accounts are your most liquid assets. This is the money you use every day. Your cash and bank accounts are listed as payment methods, when paying invoices or entering customer payments.

Accounts Receivable

Your accounts receivable tracks the money your customers owe you.

Stocks

Stocks is the current value of your stock. When you close a financial period, you can set the value of your stock.

Other Current Assets

An example of other current assets would be shares your company holds in a listed company. The criteria for classifying an asset as a current asset is that you can turn it into money in reasonably short time.

Long-term assets

Long-term assets are also known as capital assets. These are assets used by a company for day-to-day operation, and are not easily converted into money at short notice. Long-term assets are grouped into:

  1. Fixed Assets
  2. Other Long-term Assets

Fixed Assets

Fixed assets are assets you use to run your business. For example machinery, fixtures and cars. Fixed assets are written off over time, for wear and tear. Before you can enter the supplier invoice for a new fixed asset, you need to create the fixed asset. This is because you have to register information that is used to perform write-offs. There is also a routine for disposing of a fixed asset, for instance when you have sold it or it has been destroyed.SMARTEDGE has functionality for automatic write-offs on fixed assets. Go here to read more about fixed assets.

Other Long-term Assets

Other long-term assets are usually long-term financial investments.