[3 min read]
An accountant we collaborate with recently told us that, in their experience, it did not.
Their team used an external spreadsheet to record fixed assets and calculate depreciation for a mutual client. This is common practice and provides a familiar working paper for the year-end accounts.
As the client’s bookkeepers, however, we work with the live Xero file throughout the year.
We had configured the fixed asset register so that book depreciation could be calculated and posted within Xero as part of the ongoing bookkeeping process.
This meant that, by the time the accountant was preparing the year-end accounts, much of the work had already been completed.
The information was already in Xero
The depreciation figures were available through two reports:
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The Depreciation Schedule shows movements, values and book depreciation.
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The Fixed Asset Reconciliation compares the register with the associated balance-sheet figures and identifies any difference.
The accountant’s spreadsheet and Xero were therefore producing substantially the same information.
That was why we suggested comparing the two and, once everyone was satisfied that Xero was accurate, retiring the spreadsheet.
Our intention was not to question the accountant’s process or expertise. It was to avoid their team recreating information that was already available for review.
The setup requires expertise
Of course, removing the spreadsheet only makes sense if the fixed asset register can be relied upon.
The register is not a magic button.
The start date, asset types, account mappings, depreciation methods and opening balances must all be correct. Existing items also need to be entered accurately, with their cost, accumulated depreciation and net book value reconciled to the balance sheet.
A reliable process is then needed for registering new purchases, running depreciation and dealing with changes and disposals.
This initial work requires time, expertise and careful checking. However, it is largely a one-off investment.
Set it up once, then keep saving time
Once the register has been configured and reconciled, Xero can calculate and post book depreciation within the accounting system.
The register still needs to be maintained and reviewed, but there is no need to repeat the full calculation in a separate spreadsheet every reporting period.
That can remove duplicated work:
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Each month, when depreciation is calculated and posted
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Each quarter, when management accounts and balance-sheet figures are reviewed
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Each year, when the accountant prepares the year-end accounts
Spending time getting the setup right once can therefore create ongoing savings month after month and year after year.
Accountants and bookkeepers bring different expertise
This situation also illustrates how accountants and bookkeepers can complement one another.
Accountants bring year-end, tax and advisory knowledge. Bookkeepers may spend more time with the live Xero file and the practical detail of how transactions and reports flow through it.
Used collaboratively, both perspectives can improve the system.
Automation does not replace the accountant’s professional judgement or responsibility. It removes repeatable calculation and posting work, providing reliable information for the accountant to review.
The professional work remains important. The duplicated administration does not.
Practical support for accounting firms
Accounting firms understandably concentrate much of their time on compliance, year-end accounts, tax and advisory work. They may not have the capacity to explore every practical Xero nuance across every client file.
That is where experienced bookkeeping support can complement the firm’s expertise.
Whether your firm manages bookkeeping internally or helps clients keep it in-house, The Company That Counts can configure the fixed asset register, review an existing setup and establish a reliable process.
We can also show your team—or your clients—how to maintain the register, run depreciation, reconcile the reports and identify when something needs attention.
The aim is to invest the time needed to get the register working properly once, then benefit from the time saved every month, quarter and year.
How much time could your team save if the fixed asset register worked as part of Xero, rather than beside it?
