If you run QuickBooks Online on Essentials or Plus, there is no button that calculates depreciation for you. It is easy to assume a full-featured accounting system tracks fixed assets the way it tracks bills and invoices. It does not, unless you are on the Advanced tier. Intuit's own support article is direct about it: "QuickBooks Online doesn't automatically depreciate fixed assets. Instead, you need to manually track depreciation using journal entries" (Intuit, "Depreciate assets in QuickBooks Online").
This article covers what that means in practice: where fixed asset tracking actually lives in the QuickBooks Online lineup, how Essentials and Plus users record depreciation today, a worked monthly entry, and what to weigh if you are deciding between upgrading, building a spreadsheet, or keeping the register somewhere else and posting into QuickBooks Online each month.
Where fixed asset tracking lives in the QuickBooks Online tiers
QuickBooks Online is sold in tiers: Simple Start, Essentials, Plus, and Advanced, each adding capability on top of the last (Intuit, "Account plan comparison"). Essentials and Plus cover the core bookkeeping most small businesses need: invoicing, bills, bank feeds, and on Plus, inventory, project tracking, and class or location tracking. Neither tier includes a fixed asset register or a depreciation engine.
The fixed assets feature is an Advanced-only addition. Intuit's help article on the feature describes what it does once you are on that tier: you enter an asset's purchase date, cost, useful life, and depreciation method, and "the app automatically creates the depreciation schedule," posting entries "on the 1st day of each month" (Intuit, "Add and manage fixed assets in QuickBooks Online Advanced"). It supports straight-line and an accelerated declining-balance method, lets you enter an asset that already has accumulated depreciation from a prior system, and produces reports grouped by asset or asset type.
That leaves a real gap for the Essentials and Plus population: a company with a fixed asset register but not enough other reasons to justify the jump to Advanced, which also raises the user limit, chart-of-accounts limit, and adds features (role-based permissions, batch operations) a smaller company may not need. Upgrading a whole subscription tier to get one feature is a real cost, not a rounding error, and it is worth being clear-eyed about before doing it.
What Essentials and Plus users do today
Absent the Advanced feature, depreciation in QuickBooks Online is a manual journal entry, made on whatever cadence the company closes its books (usually monthly). Intuit's own instructions for this are short: create a journal entry, debit the depreciation expense account, credit accumulated depreciation, save (Intuit, "Depreciate assets in QuickBooks Online," cited above). The article also flags the part that matters most for a controller: QuickBooks will not tell you if the amount is right. It will post whatever number you type. The calculation, and the discipline to run it consistently every period, is on you.
In practice this means someone (often the controller, sometimes a bookkeeper who inherited the file) maintains a schedule outside QuickBooks Online, usually a spreadsheet: one row per asset, cost, in-service date, useful life, method, and a column per month. Every close, that spreadsheet produces one number per depreciation expense account, and someone keys a journal entry for it. This works until the spreadsheet's author leaves, a formula gets dragged wrong, or an asset is disposed of and nobody remembers to stop depreciating it.
A worked monthly entry
Sample Company buys a piece of shop equipment on January 1 for $24,000. It has no salvage value and a five-year useful life. Under straight-line depreciation, annual depreciation is cost divided by useful life:
$24,000 / 5 years = $4,800 per year
Monthly depreciation is that annual figure divided by twelve:
$4,800 / 12 = $400 per month
Each month, Sample Company's controller posts a journal entry: debit "Depreciation expense, equipment" for $400, credit "Accumulated depreciation, equipment" for $400. After twelve months, accumulated depreciation on that asset is $4,800, matching the annual figure, and the asset's net book value on the balance sheet (cost minus accumulated depreciation) has dropped from $24,000 to $19,200. Scale that by however many assets are on the books and the arithmetic is straightforward per asset, but tedious and error-prone as the count grows, especially once assets are added, disposed of, or transferred mid-year and the monthly figure has to change partway through.
Book depreciation is not tax depreciation
The entry above is book depreciation, the figure that goes on the financial statements. It is calculated differently from tax depreciation, which for most property placed in service after 1986 follows the Modified Accelerated Cost Recovery System, and can be accelerated further with the Section 179 deduction or the bonus depreciation allowance (Internal Revenue Service, Publication 946, How To Depreciate Property). A company usually needs both figures: book depreciation for the general ledger and the audited financial statements, tax depreciation for the return. QuickBooks Online, with or without Advanced, only produces the book-side journal entry you give it. Confirm the tax-side calculation and elections with your tax preparer; that is a separate schedule, not something to derive from the general ledger entry.
The three practical paths
For an Essentials or Plus company with a real fixed asset count (more than a handful of assets, or any mix of methods and useful lives), there are three ways to handle this, each with a real tradeoff:
Keep the spreadsheet, keep posting manually. No new cost, but no controls either. Nothing locks a closed month, nothing stops someone from editing January's numbers in June, and nothing produces an audit trail showing who changed what. For a five-asset company that may be acceptable. For fifty assets across several locations, expect an auditor to ask how the schedule is protected from later edits, and have an answer.
Upgrade to QuickBooks Online Advanced. This gets you the built-in fixed asset feature and its automatic monthly posting, but also means paying for the full Advanced tier, including capabilities (higher user limits, role permissions, unlimited chart of accounts) the company may not need yet. It is a reasonable choice if those other Advanced features are also on the roadmap.
Keep the register outside QuickBooks Online and post the entry from there. This is the same shape as the spreadsheet approach, but with a purpose-built register instead of a spreadsheet: locked periods, an audit trail of who changed an asset and when, and support for more than straight-line if the company needs declining balance, sum-of-years-digits, or units of production. Steda is a register built for this: a fixed asset register with those depreciation methods, a period close with locked months, and journal entries posted to QuickBooks Online. Every path still ends the same way, with a number landing on the general ledger every month. The question is only where that number comes from and how much control surrounds it before it gets there.
Whichever path a company chooses, the number itself only has to be consistent, documented, and reproducible next month, next year, and in front of an auditor. That is the bar, not the price of the QuickBooks Online subscription.