Don’t Suffer From Stockholm Syndrome, Make the Change

We have all done it, stuck with something that is suboptimal at best, and downright useless at worst. And it’s no different when it comes to looking at your systems and processes. So often human nature is to simply put up with suboptimal systems or processes, as it’s just easier to go with the flow rather than create extra work in the short term to review, assess and implement new options.

This is certainly true in the glamorous realms of IFRS 16 lease accounting. There are plenty of articles and stories about accountants wedded to Excel spreadsheets to do mind numbing, tedious tasks with plenty of opportunity for material errors. Almost all of these same accountants would also accept that Excel is not the perfect solution for lease accounting, but hey, it is definitely free and the boss doesn’t want to spend money!

Excel spreadsheets are not free

In recent conversations with finance teams, we have found that their month-end process were taking, on average, up to five days! Therefore, by actually factoring in the opportunity cost of those five days it can quickly be seen that Excel is certainly not free and in fact is costing considerable employee time.

The same companies since implementing our specialist IFRS 16 lease accounting software, LOIS, are now completing these tedious tasks in less than a day. That’s a significant saving, you can simply apply the cost of the software against the four days of employee salary cost you have got back and see the positive benefits of paying for a system! I can assure you than unless you are a bona fide Excel guru paid like a student McDonald's worker, the software will certainly pay for itself.

Lease accounting should be automated

The second thing we often hear is, “We have a system, it’s just not very good, but we just don’t have the time to change it, as its too time consuming.” This is not unsurprising since many companies raced out and implemented a lease accounting system without a real understanding of their requirements, the important components relevant to their business and an understanding of the need for task automation. This left many companies with systems where the accounting is an afterthought and although systemised, there is little automation, leaving many reconciliation processes to be completed to ensure the numbers actually make sense.

Another common problem is that you need to be a rocket scientist to drive the system and with inevitable turnover in staff, someone has lost the manual, and going back to the support team is even worse than pulling teeth!

Migrate to an IFRS 16 lease accounting system in only 2 weeks

This has been a real hurdle for some time as people don’t want more work in the short term even if it makes their life easier in the long term. To that end, we can now guarantee a short turnaround, in most cases only 2 weeks and at a significantly cheaper cost (time and money) than when you first converted to the new IFRS 16 standard. We also have standardised business migration processes in place that mean the implementation cost will be fully covered by the time savings from using the system for only two months.

Combine this with the business case that gives you back considerable time over the year and you will be sipping margaritas on the beach in no time. This is all before we talk to you about the commercial opportunities from having all your leasing data in one central place. Anyone for some free ROI to show the boss around your company’s poor leasing decisions?

The process for change is easy as 1, 2, 3.

1. Note down the pains of the current process/solution

2. Identify when your current contract is expiring

3. Reach out to us - we can show you that a system implementation need not be a chore, even if it's IFRS 16

PS. This is not just my opinion, checkout one of our actual case studies:

Local, qualified support you can count on – Tegel case study

Integrate across multiple ERP systems and global locations – BlueScope case study

Give your auditors IFRS 16 peace of mind – Freightways case study

PPS. To assist you in making the case for change and get the investment signed off by your senior decision makers, we have created an editable template that will help you to create a Business Case for Lease Accounting Software.