Process: Fixed Assets – Constructing a Pile of Work?

Staff on construction site

Are you keeping copies of the invoices for your capex reconciliation? Dig them up now and create a folder in AP to keep track of capital equipment purchases. This could be a physical file or PDF’s of the documents.  Why not add them to the depreciation schedule (construction in process) now since you are thinking about it? Don’t forget delivery and installation costs too. If your own employees are installing equipment make sure you keep track of their time correctly. Typically a capex project could have multiple pieces and different timing. Review with the project manager or department head to make sure that everything is coded correctly. You might also check on the quality or delivery schedules for a supplier. This might affect progress payments or completion deadlines. Better to get ahead of a large capex project and know what might happen if earlier deadlines are not met or costs are beyond what is expected.

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