Accounting
Hardfin is designed to allow operational tracking of assets for a hardware-as-a-service (HaaS) business, while seamlessly integrating with your general ledger (GL) accounting system.
Hardfin can operate as an asset subledger that integrates with your general ledger (GL) accounting system. This subledger structure maintains detailed asset-level tracking while posting summarized journal entries to your GL. This implementation follows the same integration patterns as enterprise ERP systems such as SAP, Oracle, and NetSuite.
Hardfin can be used to augment such enterprise ERP systems as a full-feature asset tracking platform for HaaS businesses, or to complement less sophisticated accounting systems such as QuickBooks Online or Xero.
Hardfin as asset subledger
An asset subledger maintains detailed transaction and balance information for specific asset categories, providing granular tracking that supports operational decisions and audit requirements while rolling up to summarized GL postings.
Subledger architecture
Hardfin's subledger architecture separates detailed operational tracking from financial reporting:
Detailed tracking in Hardfin - Full SKU-level detail for all inventory and fixed-asset transactions operates in real time, without the need for periodic reconciliation or balance sheet adjustments. This includes:
Individual asset serial numbers and metadata
Product SKU breakdowns for all transactions
Complete movement and deployment history
Detailed cost basis components (acquisition costs, deployment costs)
Asset-level depreciation calculations
Summarized posting to GL - Journal entries aggregate to account-level totals at the SKU level, without asset-level detail. This is done by the monthly closing workflow to ensure that the GL is always in balance. This includes:
Monthly operational journal entries by transaction type
Account-level balancing and reconciliation
Adjustment entries for prior-period true-ups
Standard chart of accounts integration
This separation allows operational teams to analyze detailed asset movements while finance teams work with clean, summarized GL postings that match standard accounting workflows.
Integration with ERP systems
Hardfin's subledger implementation mirrors standard ERP subledger patterns:
Account-level reconciliation - The adjustment entry operates at the account level, avoiding the need for clearing accounts between different balance sheet areas. Details are included at the SKU level for easy reference. A single consolidated adjustment spans inventory, fixed assets, and all related accounts.
Audit support - While GL postings are summarized, all detailed SKU-level and asset-level breakdowns remain available in Hardfin to support auditor inquiries, operational analysis, and variance investigation.
Locking and period close - Hardfin locks balances by account and SKU internally, creating a frozen snapshot for easy reconciliation. This detailed lock enables precise tracking of what changed, but adjustment journal entries post only account-level aggregates.
The monthly close process for this implementation is detailed in Monthly close process.
Best practices
Balance sheet reconciliation
Reconcile Hardfin's asset balances to your GL monthly:
Inventory reconciliation - Compare Hardfin's inventory balance (by SKU if needed) to GL inventory accounts. Investigate any differences before period close.
Fixed assets reconciliation - Compare Hardfin's fixed asset balances and accumulated depreciation to GL fixed asset accounts. Trace differences to timing of deployments, disposals, or depreciation calculations.
Clearing account management - Ensure inventory clearing (GRNI) and asset disposal clearing accounts net to zero after all invoices and journal entries post.
Cost basis policy documentation
Document your cost basis methodology:
Simple cost basis - Document the standard cost applied to each product SKU and how you determine that cost (e.g., average purchase price, standard bill of materials cost).
Advanced cost basis - Document which costs are included in acquisition costs vs. deployment costs. Reference accounting guidance (e.g., ASC 360) that supports capitalizing deployment costs. Maintain documentation of how you calculate allocated overhead or labor costs.
Adjustment entry review
When adjustment entries are material, investigate root causes:
Data timing differences - Determine if adjustments result from transactions processed after period close in your other systems (e.g., late invoices, backdated receipts).
System integration issues - Check whether adjustments indicate problems with data synchronization between Hardfin and other systems.
Understanding adjustment drivers helps you improve processes and reduce future adjustments.
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