At Puzzle, we believe accounting should work for founders, not against them. Instead of wrestling with manual depreciation spreadsheets, Puzzle automates the lifecycle of your equipment, electronics, and furniture.
Here is how you can manage your fixed assets directly within the platform to keep your balance sheet accurate and your tax season stress-free.
1. Identifying and Categorizing Assets
Puzzle simplifies the "capitalization" process by automatically flagging potential assets for your review.
Automatic Suggestions (The Drafts Tab): When you categorize a transaction to a Fixed Asset account (like Electronics or Furniture), Puzzle monitors the cost. If a transaction meets your capitalization criteria (typically $2,500 or more), it won't just sit in your activity feed—it will automatically appear in the Drafts section of your Fixed Assets tab.
The Review Process: Think of the Drafts tab as Puzzle saying, "We noticed you bought a piece of equipment; do you want to set up a depreciation schedule for this?" This keeps your potential assets organized in one place until you're ready to activate them.
Manual Conversion: If a smaller item needs to be capitalized, you can manually "convert" any transaction into a fixed asset directly from your Transaction feed or the Fixed Assets view to move it into your active tracking.
(Located in your Transaction drawer when you select the transaction) 👇
(Located in the Fixed Assets tab) 👇
2. Setting Up Your Depreciation Schedule
Once an asset is identified, you need to tell Puzzle how to spread the cost over time.
Select Useful Life: Choose the duration (e.g., 3 years for a laptop, 5–7 years for furniture).
In-Service Date: Pick the date the asset actually started being used.
Automated Journal Entries: Once saved, Puzzle automatically calculates the monthly depreciation. It handles the heavy lifting:
Debit: Depreciation Expense
Credit: Accumulated Depreciation
The Result: Your monthly burn rate becomes more predictable because you aren't "taking the hit" of a large purchase all in one month.
How Puzzle Handles Your Accounting Entries Automatically
Once you submit a fixed asset, Puzzle takes care of the journal entries for you — no manual bookkeeping required. Here's exactly what happens behind the scenes:
1. Capitalization Entry (on the purchase date) Puzzle posts an initial journal entry in your Accrual General Ledger to "capitalize" the expense — meaning it moves the cost out of your operating expenses and onto your balance sheet as an asset.
In your Cash General Ledger: the expense is recorded on the transaction date under the expense account you categorized it to (e.g. Computers & Hardware).
In your Accrual General Ledger: an additional entry is posted on the same date to capitalize the full amount, moving it from the source account into the balance sheet cost account you selected for that asset.
💡 Why doesn't the Fixed Asset account show up as a category option on my transactions page?
That's intentional. Puzzle expects you to categorize the purchase to the operating expense account first (e.g. Computers & Hardware), and then mark it as a fixed asset on the Fixed Assets page. The Fixed Asset account is handled automatically from there — from there, you choose (or a preset supplies) the specific balance sheet cost, depreciation expense, accumulated depreciation, and source accounts — you're not meant to assign the Fixed Asset account directly to a transaction.
2. Monthly Depreciation Entries (ongoing) At the end of every month, for the entire length of your depreciation schedule, Puzzle automatically posts a journal entry in your Accrual General Ledger to record that month's depreciation expense, using the depreciation expense and accumulated depreciation accounts you configured for that asset. No action needed from you.
3. Customizing Your Depreciation Accounts & Asset Types
Every company's chart of accounts is a little different, so Puzzle now lets you control exactly which accounts each fixed asset posts to — instead of relying on a single default mapping.
When you add or convert a fixed asset, the New Asset form lets you set:
Balance sheet cost account: the asset account on your balance sheet where the capitalized cost lives (e.g., a specific Computers & Hardware or Furniture asset account).
Depreciation expense account: the expense account debited each month as the asset depreciates.
Accumulated depreciation account: the contra-asset account credited each month, offsetting the original cost.
Source account: the account the cost is capitalized out of — typically the operating expense account you originally categorized the purchase to.
Asset Types (Presets): Puzzle provides built-in Asset Type presets — Computers and Hardware, Furniture, and Software — each pre-configured with a typical useful life and account mapping. Select a preset from the Asset Type dropdown and the balance sheet cost, depreciation expense, accumulated depreciation, and source accounts auto-fill.
4. Real-Time Tracking & Adjustments
Your fixed assets shouldn't be a "set it and forget it" mystery. In the Fixed Assets Tab, you can:
Monitor Book Value: See the original cost versus the Accumulated Depreciation to know the current "Net Book Value" of your assets at a glance.
Pause or Stop: If an asset is no longer in use or you need to adjust the schedule, you can pause depreciation with a click.
Rollforward Reports: Generate and export reports that show the movement of your assets—essential for your tax CPA or during an audit.
Note: You can export the Asset Roll Forward as a CSV or Excel file — useful for sharing with your CPA or during an audit.
Pro-Tips 👍
Feature | Why It Matters |
Unlocked Periods | If you add an asset with a "start date" in the past, ensure that accounting period is unlocked so Puzzle can post the catch-up entries. |
Asset Disposal
| If you sell or scrap a computer, you can stop the schedule in Puzzle. You'll just need a quick manual entry to record any gain or loss on the sale. |
Matching Principle
| By using Puzzle’s automation, you ensure your expenses match the revenue the assets help generate, keeping your GAAP reporting clean for investors. |
FAQs
Q: How does Puzzle identify transactions as fixed assets?
A: Puzzle suggests that a transaction be recorded as a fixed asset when two conditions are met: the transaction is categorized to a fixed asset category (e.g., Furniture or Computers and Hardware), and its dollar amount exceeds $2,500.
Q: Can I manually add fixed assets if Puzzle doesn't identify them automatically?
A: Yes. Navigate to the Fixed Assets tab to convert an existing transaction into a fixed asset or to manually add a new fixed asset.
Q: Can I place a fixed asset in service in a locked period?
A: For fixed assets getting placed in service retroactive to some time in the past, there cannot be any locked periods during the intervening months between the placed-in-service date and today's date.
Q: What happens if I mistakenly place a fixed asset in service?
A: Select "Void" to remove a fixed asset. This will also reverse the auto-generated capitalization and depreciation journal entries.
Q: How does Puzzle calculate the depreciation expense for each fixed asset?
A: Puzzle uses straight-line depreciation over the useful life of the asset with a “half-month” first-month convention and the assumption that the asset will have no end-of-life salvage value.
Q: What if I dispose of a fixed asset? Will Puzzle automatically calculate the gain or loss?
A: Not yet. Stay tuned, as we will be rolling out this functionality in the coming months. For now, you can record the gain or loss using manual journal entries.
Q: Can I export the fixed asset rollforward report?
A: Yes, on the Fixed assets tab, there is a toggle for the “Asset Rollforward” in the top left. You can export this view in CSV and Excel format.
Q: Are there any additional costs associated with using the fixed asset management features in Puzzle?
A: Fixed assets are available on all our plans at Puzzle.
Q: How frequently are depreciation schedules updated in Puzzle?
A: Puzzle automatically updates depreciation schedules at the end of each month; recording the proper accruals as a depreciation expense.
Q: Can I customize which accounts are used for an asset's depreciation entries?
A: Yes. When adding or converting a fixed asset, you can select the specific balance sheet cost account, depreciation expense account, accumulated depreciation account, and source account for that asset. This gives you full control over how each asset flows through your chart of accounts.
Q: What are Asset Types, and can I create my own?
A: Asset Types are built-in presets — Computers and Hardware, Furniture, and Software — that auto-fill the useful life and account mapping (balance sheet cost, depreciation expense, accumulated depreciation, and source) when you select one. They're provided by Puzzle rather than user-created, but you can adjust any individual account after applying a preset.