What is considered a Fixed Asset in Accounting?

Fixed asset in accounting
Reading Time: 4 minutes

What is considered a Fixed Asset in Accounting?

Summary: Assets are essential for a company to grow and generate revenue. Assets display the financial health of any organization. Plus, these assets are classified into many types like fixed assets when documented in the balance sheet. Each accounting period, its value is depreciated. Investors consider huge assets as a positive sign to invest.

Quote for Fixed Asset

Assets are resources owned by a company to execute business processes and aid in generating economic value for the business. Assets can be divided into two types – Fixed assets and current assets.

Current assets are a company’s resources that can be converted into cash within a year. Cash, cash equivalents, accounts receivable, stock or inventory, marketable securities, and prepaid expenses are some examples of fixed assets.

What is a Fixed Asset?

Fixed assets are resources a company uses for a long time to conduct business operations and generate revenue. Any business uses these fixed assets for more than one accounting period. Fixed assets cannot be sold immediately. They are used for many years, and each accounting period, the value of these assets is depreciated. Property, plant and equipment (PP&E) are a company’s fixed assets.

Fixed assets can be categorized into two types – Tangible assets and intangible assets. Tangible assets are physical assets that can be touched, such as buildings, land and equipment. Intangible assets are resources with no physical presence. For example, goodwill, trademarks, patents and licenses are Intangible assets.

<<Also Read: What is Fixed Asset ? | Meaning, Benefits and Examples>>

Example of Fixed Assets

I am listing some examples of fixed assets :

Tangible Assets

  • Land
  • Building
  • Vehicles
  • Computer hardware
  • Industrial Machinery or equipment
  • Furniture
  • Office Supplies

Intangible Assets

  • Software
  • Copyrights
  • Patent
  • Goodwill
  • License

Fixed Asset in Accounting

Fixed assets are purchased to perform business functions for the long term. These assets can deliver substantial economic value in the future.

Fixed Asset Accounting records all the financial activities from the purchase of the same to the disposal of the asset. It includes the record of the entire lifecycle of an asset – purchase, depreciation, audit, revaluation, impairment and disposal. Accounts for each fixed asset are maintained.

Accounting rules and regulations must be followed to maintain uniformity in a company’s financial statements. In India, the Institute of chartered accountants of India(ICAI) sets rules and regulations for accounting.

<<Also Read: Asset transfer from CWIP to Fixed Asset>>

Fixed Asset Accounting Cycle


The purchase of the fixed asset is documented on the balance sheet. It includes the total cost of the asset, shipment costs, and installation price recorded in the journal. Additionally, it accurately records if the fixed asset was purchased by paying the total price, instalments, or exchange.


Fixed assets are depreciated periodically. In the case tangible assets, its depreciated and intangible assets are amortized. All the accounting actions are documented in the ledger.

The standard methods used to depreciate fixed assets are the straight-line method, double declining balance, sum-of-the-years digits and units of production.


Revaluation of fixed assets is the increasing or decreasing value of investments compared to the market value.


The period in which the market value of the fixed asset is lesser than the value recorded on the balance sheet. It is also known as writing down.

<<Also Read: The Scope of Financial Management >>


After a fixed asset completes its useful lifecycle, it is disposed of by telling, trading or scrapping it. Simultaneously, these assets are eliminated from the accounting records. Finally, you can calculate the gain or loss of the asset you disposed during that particular accounting period.

Fixed asset - examples

What’s the Difference Between Total Assets and Net Assets?

A company has assets and liabilities. Companies accumulate assets normally to increase revenue. All the assets are registered on the balance sheet of a company. Net assets are the total value of assets a company owns, subtracting all the liabilities. Net assets are also referred to as net asset value. For an entity, net assets are pivotal because it gives vivid information on what a company owns and owes. Plus, it reflects the financial health of a company.

Net Assets calculation

Let’s look at the formula to calculate net assets.

Net Assets = Total Assets – Total Liabilities

Total Assets

Total are the assets owned by a company to procure economic value in the future. It includes cash, accounts receivable, inventory, equipment and many more. Companies own and acquire more assets to display financial strength and generate huge income in the future. Total Assets are divided into two categories – current assets and long-term assets.

Total Assets = Liabilities + Owner’s equity

Assets are significant for a company. There are many types of assets. All the assets together showcase the financial health of a company. If your company has more assets and fewer liabilities, it is a sign of yes for the investors. To grab a lot of projects, clients or investors, your company must display healthy finances.

In any firm, assets are documented on the balance sheet. It’s not easy to maintain all the records of fixed assets manually. There is a lot of software now that maintains, records and calculates the accurate value of all the assets for many accounting periods. They are also highly secured software. So it costs a lot to make an accounting mistake. Rely on the technology to get the best benefits for the good health of your company.

Why use business intelligence software in 2022?

Business intelligence software
Reading Time: 4 minutes

Summary: Business intelligence software involves business data while representing convenient views like dashboards, graphs, charts, and reports. BI tools help business users to get various types of data such as historical, current, semi-structured, unstructured, in-house, and third-party data. However, users can also check the data in order to analyze insights into the business performance. 

Business intelligence software

Organizations use the valuable insights gained from business intelligence software and data analysis to enhance improved decisions, analyze market trends, and check problems while finding relevant business opportunities and revenue. 

Let us see the significance of business intelligence software along with its types. 

Dive down!

The Prominence of BI Software 

The International Data Corporation has recently envisaged that business analytics and big data will increase the $400 Bn global market showing a massive jump from 2019. Organizations from different businesses now understand the numerous benefits of business intelligence software and its competitive business edge. So, let us see the benefits of BI Software for your business. 

<< Also Read: How can Business Intelligence significantly improve your ERP software?>>

Fetch growth insights- 

The primary definition of BI software means gaining essential insights. However, you can also optimize BI sales opportunities and customer divisions. You can combine relational databases and multi-data models with real-time data and cross-sectional department connections. Through this, you can control a massive amount of data and surface things in varied ways.

On the other hand, you can assess supply, growth areas, market position, and more. Data is drawn in the term of real-time and checked via collaboration while improving market sense. For example, consumers having support/sales can share reviews with the top management. This gives an exact scenario of the current market status.  

Business intelligence software

Resolve emergency issues-

If you have an urgent crisis, it can be resolved with accurate information. BI software has an ad-hoc feature that helps you check data and create insights in just a few minutes. You can easily make informed decisions after the escalation of the crisis. The software has a wizard interface, and these solutions help you locate and extract critical data while generating reports. 

Access ground data quickly-

To access real-time ground action, you can leverage business intelligence software. With it, you don’t have to wait in long queues to collate or process raw market data from central departments such as marketing support/ sales. The software has excellent multi-dimensional analytics that can be parallel used by teams. One thing is that data is dynamic and shifts with market conditions right from the start. 

<<Also Read: Manage and view Business Intelligence report in Sage 300>>

Many BI tools have been intuitive for fresh users, so data analysis is extensively leveraged across many companies. Significant employees easily sweep ground data and can be quickly sorted, cleaned, and inserted into the central repository. This empowers the company with the latest data. Also, BI software solutions get connection tools that share the best insights and practices. 

Business intelligence software

Get more significant insights-

BI solutions have typical features, including scorecards and dashboards as well. These features help senior business persons get a more comprehensive view of the company’s extensive performance. Metrics can be personalized to go with the KPIs and real-time reports creation.

Dashboards help plot the business status throughout the entry range. Also, scorecards can be set to offer periodic images of the organization’s progress through its goals. The milestones and metrics are personalized to align with the objectives and overall strategy. 

Precise prediction-

The advanced BI solutions get predictive analytics and forecasting, which helps you predict future outcomes. The tools help leverage recurring, present patterns, and critical patterns to get precise forecasts. The capability to predict actions is connected to the flexibility and agility in industries including retail, tech, and entertainment. 

Types of Business Intelligence Software 

Suppose you ask how the BI software work depending on its type. However, the best way to get the kind of it is the reason the business intelligence software. Usually, business intelligence software includes three main functions packaged, standalone application, or a part of a suite. 

Let us now see its different types. 

Data Discovery 

In the data discovery function of business intelligence software, the real intelligence factor is unveiled in which the data silos are properly mined and thoroughly combined for business insights.

Today, most BI tools stand for data mining tools capable of integrating with various business solutions and datasets. These tools include mailing lists, reports, spreadsheets, web content, and more. Usually, business intelligence software pours all this data into a central platform. Here, processing takes place along with the BI asset.


business intelligence software


Most data discovery solutions include online analytical processing, usually considered its self-classification. In the case of OLAP, it is just the processing section of the broad data discovery. However, it requires various data discovery tools, including relational database, semantic analytics, predictive analytics, and report writing to clear out the intelligent elements.

The tools easily parse data and can carve enormous data sets into small digestible sections while offering meaningful words. 

Data management 

Business intelligence has the significant function of cleaning the data. Remember that raw data is entirely messy as well as different. However, the raw data requires to get ready for processing, including analytics/ reporting. A data management BI software leverages a simple approach for archiving and indexing. This will make sure raw data exists.

Also, business intelligence software leverages ETL functions (Extract, Transform, Load) to collect data from various sources while loading them into a target platform such as spreadsheets, data warehouses, and data containers. In most cases, business intelligence software involves data management as a prominent element. 

<< Also Read: Why do companies need both ERP and Business intelligence?>>

Reporting platform 

A few business intelligence software solutions emphasize the way data is represented, becoming quite popular among technical users. However, these solutions deliver great visualizations that ease complex data, dashboards highlighting KPIs, customized outputs, and scorecards that showcase thorough business health with good value. 


Different components of data warehouse

components of data warehouse
Reading Time: 5 minutes

Summary: Data warehouses include vast amounts of past data specifically intended to resolve queries and analyze data. This blog post will let us learn what a data warehouse is and components of data warehouse.


components of data warehouse

What is a data warehouse?

The data warehouse is a data management type specifically crafted to stimulate business intelligence operations, reporting, and analytics. It also supports other regulatory requirements so that organizations can convert their data into valuable insights that lead to entire data-driven decisions. A data warehouse saves current as well as past data in one place while acting as a single source of truth for a business. 

In business operations, data continuously flows from various operating systems like ERP and CRM, external resources, IoT devices, and more. However, in the past few years, data storage places have been hugely transformed into multiple locations, including the public, on-premise, and private cloud. Learn about significant components of data warehouse.

<<Also Read: What Are Data Silos And How Do Companies Handle It?>>

Significant Components of Data Warehouse 

As per the data warehouse architecture, a data warehouse has four components- ETL tools (Extract, Transform, Load), central database, access tools, and metadata. These components of data warehouse are specifically designed for enhanced speed so you can get the results faster and flawlessly analyze data on the go.

Let us now see the components of the data warehouse in detail. 

components of data warehouse

1. Warehouse database

Warehouse database is the first one among the components of data warehouse.

Central database-

It keeps all business data in the data warehouse while making it easier to report. There are various database types in which you can store the specific data types in the warehouse. These database types include-

Analytics database-

These databases help manage and sustain analytics of data storage. 

Cloud-based database-

Here, the databases can be retrieved and hosted on the cloud so that you do not have to acquire hardware to set up a data warehouse. 

Typical rational databases-

These are row databases used on a routine basis. 

2. ETL (Extraction, Transformation, Loading) Tools 

ETL tools are the central components of data warehouse and help extract data from various resources. This data is then transformed into a suitable arrangement and is later loaded into the data warehouse. They allow you to extract data, fill mislaid data, highlight data distribution from the central repository to BI applications, and more. 

Simply put, data is pulled from resources and altered to align the data for fast analytical consumption. It is carried out by a variety of data integration strategies, including ETL, ELT, bulk-load processing, real-time data duplication, data quality, data transformation, and more. 

3. Metadata

Metadata is termed as ‘data about your data.’ It is one of the major components of data warehouse. Metadata tells you everything about the usage, values, source, and other features of the data sets in the warehouse. Additionally, business metadata includes a context to the technical data as well. It describes the method to access the data, where it resides, and how well it is structured. Metadata is also classified as business meta-data having information which gives users a simple understanding of the information warehouse. 

Metadata offers interactive and easy access to the users, which helps them understand the matter and find get the data. Its management is carried out through the repository and other accompanying software. The software relies on a workstation and easily maps the source to the target database. Also, it creates code and controls the operational data to the respective warehouse.

Since data warehouse is a project, you need a flexible approach to implement it as effectively as possible. This is where effective warehouse architecture comes into the scene. 

components of data warehouse

4. Access Tools 

Data warehouses make use of a group of databases as the primary base. However, data warehouse organizations can’t work with databases without using the access tools until a database administrator is available. But, to cope with the changing conditions, it becomes necessary to use data warehouse tools as the major components of data warehouse, including data mining tools, app development tools, OLAP tools, query/reporting tools, and more. 

Data mining tools-

They streamline the process of checking arrays and links in vast volumes of data with the use of statistical modeling methods. 

OLAP tools-

These tools aid in building a multi-dimensional data warehouse while allowing business data analysis from various points. 

Application Development tools-

They help develop customized reports. 

Query reporting tools-

With these tools, corporate report production is quickly done through spreadsheets, innovative visuals, and spreadsheets as well. 


5. Reporting layer 

The reporting layer in a data warehouse helps customers to get access to BI database architecture and interface. Its prime aim is to be a dashboard to bring data visualization, fetch needed information, and create reports.

The query and reporting tools include-

Dashboard tools-

These software applications display complex business information and metrics, allowing quick understanding. 

Data mining tools-

They enable customers to implement in-detail statistical and numerical calculations that identify designs and analyze trends along with data. 

<< Also Read: Things you did not know your Warehouse Management ERP could do>>

6. Additional components 

There exist some additional components of data warehouse in a few data warehouses. They are-

  1. Logical data marts-
    It is an altered view of the significant data warehouse. But, logical data marts do not exist physically as an independent data element.
  2. Operational data store-
    It is an integrated database of operational data while its sources contain legacy systems. It also includes near and current term information. 
  3. Dependent data marts-
    It is a physical database that fetches all the information from the data warehouse. 

components of data warehouse

7. Data warehouse bus 

It is among the main components of data warehouse. The warehouse bus indicates the flow of data in a data warehousing bus system and has a data mart. It is a level that helps users transmit data and is also used to partition data produced for a specific group. 

Benefits of a Data Warehouse 

A precisely designed data warehouse is quintessential to carrying forward a successful analytics program. The primary functions of a data warehouse include dashboards, analytical tools, and reports that are quintessential for organizations. It offers appropriate data-driven decisions while assisting you in making the right decision on developing a new product and inventory. An adequately properly designed components of data warehouse helps execute queries too quickly. It offers higher advantages over on-premises and traditional versions. 

Let us now see some benefits of a data warehouse:

  1. Advanced business analytics- With DW, decisions can be made easily while also allowing access to data from different resources and removing the redundancy of making decisions on inappropriate data. 
  2. Integration- DWs develop consistency through various data types and integrate them well.
  3. High data quality- Data cleansing cases are developed by the entire system and are stored in the worklist for the following processing. 
  4. Quick queries- The primary purpose of data warehouses is explicitly developed for data analysis and retrieval. You can quickly draw vast amounts of data with very little support from the IT department. 


Top 10 ERP Vendor Evaluation & Selection Criteria

Reading Time: 5 minutes

Summary: ERP software has become the bedrock of modern-day businesses. Companies across all industries are implementing ERP software for automating their operations. But here comes the tricky part. Preparing a list of selection criteria for finding the right ERP vendor is one of the most challenging elements of ERP implementation. It requires market knowledge, communication with various stakeholders, referring to numerous testimonials, analyzing vendors’ market reputation, and fixing the final price.


What is an ERP system?

Enterprise Resource Planning (ERP) system is a business management software that automates processes. It collects business-critical information, facilitates the free flow of data between various stakeholders, and allows only authorized stakeholders to access data. The most significant benefit of ERP software for ERP vendor is that employees can focus on mission-critical tasks instead of wasting their time in redundant activities like gathering customer information, reconciling data across multiple software, and replying to trivial customer queries. 

Top-10 ERP selection criteria

1. ROI

ERP software can help you save operational costs. Remember the following points while implementing ERP software:

  • In what business areas will you save costs after implementing the ERP software? For example, faster financial reconciliation, speedy deal close, automating manual tasks, better inventory management, finding customers with high-buying potential, and estimating changing market demands and customer preferences.
  • Can the new ERP software reduce hardware & software implementation costs or software licensing agreement fees?
  • This report tells that the average budget per user for ERP is USD 8,265. Therefore you should estimate your ROI one year or five years down the line so that ERP implementation turns out to be a financial success for you. 
  • What new capabilities will the ERP software help you achieve? Will it allow you to provide excellent customer service, achieve business intelligence reporting capabilities, decrease shipping time, improve e-commerce and warehousing capabilities, or achieve real-time business reporting. 


2. ERP functionalities

The ERP market has saturated for ERP vendor. As a result, you will find thousands of ERP systems with varied functions and abilities. So, it would be best if you were well versed with your company’s specific challenges that will help you select the right ERP software. 

Here’s a list of questions that you must remember while selecting an appropriate ERP software:

  • What features does your current business management solution lack?
  • What is the primary reason for purchasing a new ERP system?
  • What manual processes do you desire to automate with the new ERP system?
  • What business areas do you wish to transform by implementing ERP software?
  • What new functions might you require in the future?

Prepare a list of essential ERP features and ask all prominent senior management individuals to examine them. 

Also Read: What Is ERP? How Does It Work?

3. Industry experience

ERP software can be divided into two major categories: Generic ERP and industry-specific ERP. Figuring out which ERP software is ideal for your organization is an essential task. First, you must ask the following questions: 

  • Which industry do you belong to — manufacturing, banking, healthcare, hospitality, automobile, etc.
  • Which software vendor would you select — Sage, Microsoft, Infor, Oracle, Netsuite.
  • Which ERP implementation partner would you choose?
  • What would you prioritize — Implementation fees or vendor reputation & experience?

4. Implementation project considerations

After selecting an appropriate ERP software and the correct implementation partner, you should focus on other aspects during the implementation phase:

  • Senior management support: Are you receiving enough support from top management and key leaders of other departments? 
  • Employee technical expertise: Is your workforce ready to learn how to operate the new ERP system?
  • Data migration strategy: Do you have temporary systems where you can safely store your critical business data until the new ERP system is fully installed?
  • Maintenance and upgrade: Do you have a separate IT team to maintain and upgrade the ERP system, or do you need a third-party vendor to handle your IT challenges?

5. ERP vendor viability

There are numerous ERP vendors in the market. Remember the following points while selecting one:

  • Product viability: How well is your product performing in the market? What is the future scope of your product? How many resources do you invest in research and development for developing new versions of existing products?
  • Customer base size: How many clients actively use your product?
  • Financial condition: Is your company performing well financially, or do you face difficulties regularly.

6. Additional features

We have already seen that ERP software provides multiple benefits to companies of all sizes and across all industries. But it also has a broad range of additional features that you should remember while selecting one for your company, such as:

  • UI/UX simplicity
  • Security from cybercriminals
  • Can integrate with other business management solutions
  • Business Intelligence
  • Customizable
  • Can forecast future sales 
  • Minimal downtime


7. Scalability 

ERP implementation process doesn’t end with the deployment process. Few years down the line, you might want new features based on the emerging market needs and changes in customer preferences. Do you think your present ERP software can deal with future challenges?

If not, you might need customizations in your existing ERP. This is where scalable ERP software comes into the picture. It fits well with your current business plans and with your future strategy too. A scalable ERP software can mesh with your organization’s strategic direction, whether entering into new markets or merging and acquiring another entity.

8. Avoiding Risk

Risk management plays a vital role while implementing enterprise-level business management solutions like ERP and CRM systems

Here’s a list of factors that have a significant impact on the risk quotient of the ERP implementation process:

  • Selecting the right third-party vendor.
  • Vendor viability
  • Price
  • Support from senior management
  • Project planning

It would help if you began by preparing a list of crucial business processes fundamental to your company’s operations. It should also contain information regarding external integrations and compatibility with other systems. Moreover, end-user training and change management are also two key areas that help manage risk, so noting them down in the list would make sense. 

Now, refer to this list throughout the ERP selection and implementation process to reduce the risk quotient. 

Also Read: Why the Future is all about Bots for Enterprise Vendors?

9. References & Testimonials

Feedback plays a vital role while selecting the right ERP software. Talk with your business partners, colleagues, and other market players to discover which ERP software would be the best for you. Don’t limit your research to social media and the internet. Visit stores and talk face-to-face with people to select the right ERP software that fits well with your organizational needs. 

10. Post Go Live

How would you handle the challenges that arise after the ERP implementation process is complete? 

Do you have an in-house IT team to look after that? 

Or would you depend on an external partner?

Prepare a well-thought plan to handle your ERP implementation process to maximize your ERP investments.


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At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. You can also write to us at sales@sagesoftware.co.in.

Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.

Top trends that will dominate the supply chain in 2021

Supply Chain
Reading Time: 3 minutes

Technological advancement will revamp the supply chain industry in 2021.

2020 has been a bad year for every industry, especially those where person-to-person contact is essential. The supply chain industry involves the close collaboration of business stakeholders — including companies, vendors, suppliers, distributors, wholesalers, retailers, and the end-user — which involves a significant health risk. The global lockdown has also affected the movement of goods. Things won’t fall back on track until an effective vaccine is available. The only alternative is maximizing the use of technology.

This article will shed light on the top supply chain trends in 2021:

1. Supply Chain control towers are coming

Visibility plays a significant role in every business. But it isn’t enough. You also need to come up with an effective solution. Supply chain control towers use AI and advanced algorithms to identify potential challenges (predictive analytics) and suggest resolutions for the same (prescriptive analytics) automatically based on real-time data. You will need these “anticipate, sense, and respond” abilities to operate optimally in 2021. 

2. Omnichannel presence will increase

The global pandemic has been the toughest for companies that relied solely on their brick and mortar stores. On the other hand, businesses operating through multiple platforms — retail, e-commerce, direct-to-door — haven’t had to face many problems. Supply chain companies that focus on consolidating demand across various channels will maximize their revenues and cut operational costs. Others will dwindle into oblivion.

3. Information delays will diminish

2020 taught supply chain businesses the significance of sharing business-critical information at the earliest. Countless companies shut down because of disruptions in their supply networks that diminished their ability to provide an adequate response to the pandemic. 2021 will see a significant rise in the installation of real-time IoT systems that will reduce time lags and update companies about supply chain challenges. 

4. Direct-to-Consumer will flourish

The Direct-to-Consumer method has several benefits:

a. By removing intermediaries, supply chain companies can directly sell to end-users at retail prices and maximize their profits.

b. Intermediaries often dilute the brand’s reputation. Using the direct-to-consumer model of selling, supply chain companies can directly interact with consumers and increase the final product’s price.

c. Supply chain companies can better understand the customer’s needs, wants, and ambitions and deliver accordingly.

d. The conventional market route demands respect for the contract’s terms and conditions signed between different parties. It can sometimes cause significant financial loss. By reaching the customer directly, supply chain companies can escape from getting into such contracts.

5. Constant monitoring of the supply-demand ratio

The supply chain companies that didn’t rely on software to monitor the supply and demand ratio have been devastated by the pandemic. In 2021, companies will implement software solutions for planning the following:

a. Sourcing of raw materials.

b. Monitoring the inventory levels and placing orders automatically when they go below the set threshold.

c. Selecting an appropriate vendor, distributor, and supplier for local and global platforms. 

d. Reallocating products in real-time.

e. Forecasting demand and supply ratio based on historical data.

Global demand-supply matching (GDSM) will provide a competitive edge to supply chain companies in 2021. It will allow them to use resources judiciously that will help maximize the profit and cut operational expenses. 


2021 has been a bad year for businesses of all kinds, especially for supply chain companies that cannot function optimally without coming in close contact with people. Some companies have begun implementing technology to boost their operations, while others are lagging. Those who fail to adapt to the new normal will have to either close their operations or see a significant chunk of their customer base moving to their competitors. 

At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. To know more about it,  You can also write to us at sales@sagesoftware.co.in

Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.