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Accounting for Capital Expenditure

In ProfitSee, you can budget for capital expenditures and compare against actuals, while viewing the 3-Way Cashflow Forecast and impact on cash on hand. Learn how to budget and account for capital expenditures.

Capital Expenditure is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. Line items brought in under the account type Fixed Assets can be included in the Analyst™ and 3-Way Cashflow Forecast, as well as Scenarios. Only those Fixed Assets with debit transactions of a positive value will be shown. 

 

Chart of Accounts 

ProfitSee will automatically map the chart of accounts upon initial synchronization. If you are using Xero or QuickBooks Online, these articles can assist in making sure the accounts are categorized correctly.

1. At any time, go to the Data Entry tab and select the Chart of Accounts section to review and make changes to your account mapping. 

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2. Review to make sure all of your capital expenditure line items are categorized under the account type "Fixed Assets". 

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Budgeting

1. To budget for your capital expenditures, go to the Budgeting Tab, and select the budget data entry section. Here you can build a budget for each capital expenditure line item; which are always at the bottom of the screen. 

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The Analyst™

1. Once you've reviewed and set a budget for your capital expenditures, you can then go to the Financials Tab and select the Analyst™ report to see how your actuals compare against the budget. Green means you are performing as good or better than expected, while red means you are performing worse than expected. You can go back and edit the budget in Step 2 at any time.

 

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Forecasting

1. After measuring performance, if you'd like to see how these budgeted capital expenditures are going to affect cash on hand going forward go to the Forecasting Tab, and select the 3-Way Cashflow Forecast. 

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What-if Scenarios

1. You can also view the impact on net income of what-if scenarios involving capital expenditure items by going to the Scenarios Tab, and selecting the "View" section once you've built your scenario components.

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Thanks for reading! If you have any other questions please contact your account manager, or reach out to our support team at support@myprofitsee.com