The Background:
Freightways has an extensive fully owned and operated portfolio of logistics and information management brands across New Zealand and Australia. As a leader in the transport and logistics industry with a complex lease portfolio, they realised that the implementation of the new IFRS 16 accounting standards was going to be a huge undertaking.
They initially engaged their auditors for advice and after their initial assessment of IFRS 16, quickly dismissed spreadsheets as a viable solution for complying with the new standard. Due to the sheer number of leases across their network of businesses, the complicated IFRS 16 calculations could not have been sustainably maintained through spreadsheets.
After realising they needed a software solution, LOIS was identified and chosen as a low to medium cost, standalone solution, that could integrate into their existing systems.
Each business within the Freightways group had its own finance team who maintained their own lease spreadsheets and stored documents in different locations. Therefore, LOIS‘ ability to manage all of these leases in one centralised location provided extra value which helped with the business case to the Board.
The Implementation
Once onboard, the LOIS support team (who are made up of Chartered Accountants) quickly took the pressure off, they not only understood the software implementation aspect of the project but were also ready and on hand to answer any questions arising from an accounting perspective.
The implementation project was managed by one key point of contact within the LOIS support team. They were the driver in preparing Gantt charts to show the key milestones involved in the process, organising weekly progress meetings and guiding Freightways step by step through the implementation process.
They also arranged for a whole tranche of Freightways lease data to be uploaded, which freed up internal resource to focus on the accounting implications.
The Outcome
IFRS 16 is not a one and done project, it needs to be maintained on an ongoing basis. It is a business-as-usual task, but now that all the data is in LOIS, they don’t have to worry about the accounting calculations. They have full confidence in LOIS to process and generate the right outputs, the only thing they can get wrong is the input!
Additionally, using LOIS has given Freightways’ auditors peace of mind. IFRS 16 was seen as a high area of risk, therefore, they have taken a lot of comfort knowing that Freightways is using a tried and tested, working software solution. In many instances, Freightways were talking to their auditors through IFRS 16, rather than vice versa.
“It’s been great dealing with the LOIS team, they have been very supportive throughout the whole implementation process and beyond into BAU. They responded quickly to any queries and made the transition much easier than anticipated.”
Stephen Micallef, Group Financial Controller
At Quadrent, we provide our clients with a software solution designed to manage and report on their leased assets. Our world-leading SaaS solution, LOIS, is designed to assist in creating a robust process that effortlessly guides you in accounting for all leases to maintain IFRS 16 compliance and uncover hidden ROI savings within leasing.
Discover how leasing can be a cost-effective and efficient way to access and manage the assets your business relies on.
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