Pallets and crates: asset or stock?
Whether a logistics business should treat pallets and crates as fixed assets or stock, how each is recorded in Achekam, and the policy to agree first.
By Achekam · · 5 min read · For Logistics businesses in South Africa, Nigeria, Kenya
Ask a warehouse manager how many pallets the business owns and you will get a shrug. Some are in the racking under shippers' goods, some are on trucks heading to customers who may or may not send them back, some are stacked broken behind the dock, and a few hundred belong to a pallet pool and were never yours at all. Crates, stillages and roll cages tell the same story. Yet together they can be one of the larger sums a logistics business spends on equipment each year, and they often vanish into "general expenses" without anyone deciding that they should.
The right home in the books depends on what the pallets are for. This article sorts them into three kinds, explains how each is recorded in Achekam, and sets out the policy you should agree with your accountant before the next pallet order arrives.
Pallets you keep, pallets you sell, pallets you swap
Start with what actually happens to them.
| Kind | What happens to it | Usual home in the books |
|---|---|---|
| Kept | Used in your own racking and on your own vehicles, over and over, for more than a year | A fixed asset, depreciated |
| Sold | Goes out with the customer's goods and is charged for, or never comes back | Stock, or a cost of the job it went out on |
| Swapped | Exchanged one-for-one with customers or a pool, so you hold a balance rather than particular pallets | A matter for your accountant: often a deposit or a pool balance |
The middle row is the one people miss. If a pallet leaves on a delivery and you either sell it to the customer or write it off, it behaves like stock or a consumable, not like equipment. The bottom row depends on the terms of the exchange scheme or the pool contract, and is worth reading carefully before deciding anything.
Fixed assets at cost with depreciation
Pallets, crates and stillages that you keep and reuse belong on the fixed-asset register. In Achekam, a business adds assets to the register at cost and depreciates them monthly by straight line or reducing balance, with a journal posted each month. When assets are scrapped or sold, the register disposes of them and posts the profit or loss.
Recording pallets one at a time would be absurd. The practical approach is to register them in batches: one asset per purchase, such as "Plastic pallets, order from supplier, month and year". That gives each batch a cost, a start date and a depreciation charge, and lets you dispose of a batch, or part of it, when it is written off. AccountingTools' note on the fixed asset register describes the listing every business should keep, with each asset's cost, location and depreciation details, which is a sensible standard for pallet batches too.
Two cautions. Achekam does not work out tax wear-and-tear, so the tax allowance on pallets is calculated separately, by you or your accountant. And depreciation is an estimate: pallets in heavy use may be finished long before the useful life you picked, so look at write-offs each year and adjust the life for new batches if the evidence says so. For the same register applied to vehicles, see depreciating trucks and trailers each month.
Stock items and counts
Pallets you sell, or pallets you hold to sell or charge out, can be kept as stock. The Item Master in the Accounting menu creates products on the server with a SKU, name, category, selling price, cost price, opening quantity and VAT treatment. It needs the Point of Sale, Warehousing or Wholesale add-on.
With the Warehousing add-on, a business keeps stock locations such as warehouses, stores, bins and vans, with the quantity on hand at each. A stock count sets a location's quantity to what was counted and records the difference as an adjustment. For pallets that means you can count each depot's stack, see how many have gone missing since the last count, and have a record of the difference.
Why counts do not reach the ledger
This is the limit to plan around. In Achekam, stock counts, wastage, transfers and opening quantities do not post to the general ledger. Only till sales and till returns move the inventory account.
So if you keep sellable pallets as stock and a count shows a shortfall, the quantity in the Item Master changes but the value in your balance sheet does not. Someone has to post a manual journal to bring the ledger into line, and that someone needs a clear rule for doing it. A simple routine:
- Count pallets at each location on a fixed day.
- Note the adjustment the count records.
- Value the shortfall at the pallet's cost price.
- Post a journal for the loss and keep the count sheet with it.
The same limit applies to every other stock item a transport business keeps, which is why tyres, spares and depot diesel in stock follows the same pattern.
A policy to agree with your accountant
Most of the confusion around pallets comes from never having written down a rule. Agree a short policy and apply it to every purchase:
- Which pallets are assets. For example, reusable pallets and crates kept for your own operations.
- The smallest batch you register. Below an amount you agree, a purchase can simply be expensed. Choose the amount with your accountant; there is no one right answer.
- Useful life and method. Straight line is easiest to explain; reducing balance front-loads the charge for equipment that wears quickly.
- What counts as stock. Pallets bought to be sold or charged out with deliveries.
- How pool or exchange pallets are treated. Based on the contract, not habit.
- Who counts, how often, and who posts the write-offs.
Write it down, keep it with the year-end file, and apply it the same way every year. Auditors and lenders care far less which reasonable treatment you chose than whether you applied it consistently.
Getting started
Gather last year's pallet and crate invoices, sort each purchase into kept, sold or swapped, and take the list to your accountant with a draft of the policy above. Then add the kept batches to the register at cost, set up the sellable ones in the Item Master, and put the first count on the calendar.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
