Expense Monitoring

​

Step 1: Configure Financial Accounts and Cost Centers

1. Verify or Create Asset-Related Accounts
   • Navigate to Accounts > Chart of Accounts.
   • Confirm you have:
     • Fixed Asset Accounts (e.g., “Fixed Assets – Vehicles,” “Fixed Assets – Equipment”).
     • Expense Accounts (“Maintenance Expense,” “Repair Expense”).
     • Accumulated Depreciation and Depreciation Expense accounts.
     • Disposal/Gain-Loss accounts (for when assets are sold or retired).
   • If any are missing, click New to add them, specifying Account Type (Fixed Assets or Expense).
2. Set Up Cost Centers
   • Go to Accounts > Cost Center List.
   • Create cost centers to track expenses by location (e.g., “Plant A”), department (e.g., “Production”), or project (e.g., “Expansion Project”).
   • For each cost center, assign a parent if needed for roll-up reporting (e.g., “Production” → parent “Operations”).
3. Assign Default Cost Centers on Assets
   • Open an asset record under Assets > Asset List (e.g., Asset-1001 – CNC Mill).
   • In the Financials section, set the Cost Center where ongoing expenses should default (e.g., “Production”).
   • Save the asset so that any expense entry or depreciation linked to this asset automatically tags that cost center.

​

Step 2: Record Asset Acquisition and Capitalization

1. Create a Purchase Invoice for the Asset
   • Under Buy > Purchase Invoice > New, enter:
     • Supplier, Invoice Date, Due Date.
     • In Items, add the asset line:
       • Item Code (if you manage fixed assets via Item Master) or a generic “Asset – Equipment” entry.
       • Quantity = 1, Rate = Purchase Cost (e.g., $50,000).
       • In Expense Account, select the relevant Fixed Asset Account (e.g., “Fixed Assets – Equipment”).
       • Cost Center should default from the asset record, but you can override if needed.
   • Attach the vendor invoice PDF under Attachments for audit trace.
   • Click Save, then Submit to record the capital purchase.
2. Create Asset Record (If Not Already Created)
   • Go to Assets > Asset List > New.
   • Enter Asset Code, Asset Name, Purchase Date, and Cost (match the Purchase Invoice).
   • Link to the newly created Purchase Invoice under Supplier Invoice.
   • Set the Asset Category (which defines depreciation method and useful life).
   • Set Cost Center (verifies expense will flow correctly).
   • Save and Submit. The CGIC App will:
     • Capitalize the cost into the Fixed Asset Account.
     • Automatically create an Accumulated Depreciation schedule based on the category.

​

Step 3: Link Expenses to Assets

1. Maintenance Tasks and Costs
   • When completing any Maintenance Task (preventive or corrective), ensure:
     • Consumed Items are logged (spare parts automatically move from inventory and debit “Maintenance Expense”).
     • Labor Hours and External Service Invoices are linked back to the Asset and tagged with its Cost Center.
   • After costs are approved (see the “Record Maintenance History” doc), the CGIC App posts journal entries that debit Maintenance Expense accounts and credit Inventory or Accounts Payable.
2. Depreciation Entries
   • Under Assets > Depreciation > Run Depreciation, run the depreciation process monthly or quarterly.
   • The CGIC App will:
     • Debit Depreciation Expense (expense account).
     • Credit Accumulated Depreciation (balance sheet contra-asset).
     • Reduce the Book Value on the asset record.
3. Asset Disposal or Retirement
   • When an asset is sold, scrapped, or retired:
     • Open the Asset record and click Dispose Asset.
     • Enter Disposal Date, Sale Proceeds (if any), and Cost Center for gain/loss posting.
     • The CGIC App calculates:
       • Book Value at disposal.
       • Gain/Loss = Sale Proceeds − Book Value.
     • It posts:
       • Debit Accumulated Depreciation to clear it.
       • Debit Cash/Bank (if sold) or write off.
       • Credit Fixed Asset Account for original cost.
       • Debit/Credit Disposal Gain/Loss account for the difference.

​

Step 4: Review Asset Expense Reports

1. Asset Maintenance Cost Report
   • Go to Maintenance > Reports > Asset Maintenance Cost Report.
   • Filter by Asset, Date Range, or Cost Center.
   • Click Refresh to see:
     • Total Maintenance Cost (broken into Materials, Labor, External) per asset.
     • YTD Maintenance Spend, comparing against any maintenance budget if configured.
   • Export to CSV/PDF for review by Maintenance and Finance teams.
2. Asset Depreciation Schedule Report
   • Under Maintenance > Reports > Depreciation Schedule Report, set:
     • From Date / To Date (e.g., Jan 1 – Dec 31, 2025).
     • Asset Category or specific Asset.
   • Click Refresh to view period-by-period depreciation amounts and cumulative accumulated depreciation.
3. Asset Value and Expense Ledger
   • Navigate to Assets > Reports > Asset Value and Expense Ledger.
   • Filter by Asset or Cost Center.
   • Click Refresh to see a consolidated ledger:
     • Acquisition Cost, Capitalized Date.
     • Maintenance Costs (sum of all related tasks).
     • Depreciation (cumulative).
     • Disposal Entries (if applicable).
     • Net Book Value at each period.
4. Budget vs. Actual Expense Report
   • Under Accounts > Budget > Budget vs Actual Report, filter:
     • Fiscal Year, Cost Center, and Expense Account (e.g., “Maintenance Expense – Equipment”).
   • Click Refresh to see:
     • Budgeted Amount vs. Actual Expense.
     • Percentage of budget utilized.
     • Variance amounts, highlighting overages.

​

Step 5: Set Budgets and Expense Alerts

1. Create or Update Budgets
   • Navigate to Accounts > Budget > New (or open an existing budget).
   • Specify:
     • Fiscal Year (e.g., 2025–2026).
     • Cost Center (e.g., “Production – Plant A”).
     • Expense Account (e.g., “Maintenance Expense – Equipment”).
     • Budget Amount for each period (Monthly or Quarterly).
   • Save the budget—CGIC App will now track actual expense postings against these numbers.
2. Configure Expense Threshold Alerts
   • Go to Setup > Email Alert > New.
   • Set:
     • Document Type: GL Entry (to trigger on general ledger postings).
     • Condition: When Account equals “Maintenance Expense – Equipment” AND Cost Center equals “Plant A”.
     • Threshold: For example, if Debit Amount > $10,000 for that account and cost center in a single posting.
     • Recipients: Asset Manager, Accounts Manager.
     • Email Template: “Alert: High Maintenance Expense for cost_center .”
   • Save and Enable the alert.
3. Over Budget Notifications
   • CGIC App can automatically notify when actual expenditures exceed budget:
     • Under Accounts > Email Alert, create an alert with:
       • Document Type: Budget.
       • Condition: actual_amount > budget_amount.
       • Recipients: Finance Controller, Department Head.
       • Include fields like Cost Center, Account, Budget Period, Variance in the email template.