Lease Accounting System Migrations Are Easier Than Ever: Here’s Why.

Since the IFRS 16 standard came into effect in January 2019, many companies have transitioned from a compliance-only approach using spreadsheet-based systems to using lease accounting software. A lease accounting system makes IFRS 16 more accurate. It provides companies with a central repository for storing their lease data, which optimises the management of their leases to generate the best return on investment (ROI) possible for every lease. While transitioning from a spreadsheet-based system to a lease accounting system can seem daunting at first, advances in the available software systems and working with an expert team mean that migrating to a lease accounting system is easier than ever before. Keep reading to learn what makes a lease accounting system migration seamless.

A lease accounting system provides verification

Unlike spreadsheets, a lease accounting system provides companies with the tools and resources to ensure IFRS 16 compliance from the point of implementation. Where applicable, it also helps companies address historical inaccuracies in their lease accounting records. The level of accuracy afforded with a lease accounting system and the time savings that a system provides are some of the key reasons that organisations choose to migrate to a lease accounting system. 

Like any system migration, it can be a lot of work at the start. This is because historical data needs to be gathered and reviewed to ensure everything is set up correctly. However, the migration process is smooth and efficient with the right system and team. For example, companies with a portfolio of over 100 leases usually need to spend around five days collating all the information required for system migration. From here, an expert team such as Quadrent’s LOIS team of professionals will work on implementing LOIS. This process typically takes two weeks, depending on the state of current data systems. The initial outlay of time invested in system migration ensures everything is correct and the company can gain as much value as possible both from its lease portfolio and the software system it is implementing.

Is a lease accounting system migration simple?

In short, once a company has gathered all the information required for the lease accounting system, the migration and implementation are relatively straightforward. And once this process is complete, finance and accounting professionals enjoy the accuracy of having to make fewer subjective judgement calls, automated reporting, industry benchmarking of data points such as Incremental Borrowing Rates (IBRs), and data analytics to gain the insights needed for a more strategic approach to lease management. These financial, operational and strategic benefits demonstrate the far-reaching impacts of migrating to a lease accounting system, paying great dividends on the initial outlay of work required at system migration.

Reduce your IFRS 16 workload by 75% with Quadrent’s LOIS

Migrating from spreadsheet-based systems to a lease accounting system can be a lot of work at the outset. However, by using LOIS you can cut your month-end IFRS 16 process down from five days to one, using the time saving to realise the strategic benefits of a lease accounting system. Not only can LOIS help companies get their IFRS 16 calculation correct, but over time a wealth of lease management data is stored centrally that can later be analysed to make better commercial decisions.

Join other companies who are using LOIS. Our team of CA-qualified accountants have in-depth specialised leasing knowledge and, therefore, can help you get the most value out of your assets while addressing growing ESG requirements and reporting expectations. Click here for more information.