1. Expect the unexpected
The deadline for compliance has changed many times – just one example of the unexpected changes surrounding implementing the new lease accounting standards.
While it might feel a little daunting to face this uncertainty, preparation can help you get ready to take on the challenges of implementation. We’ve seen public companies that have already gone through the process of implementing the new standards, and even though they encountered unexpected challenges, they have met compliance requirements. If there is one thing we have learned from their experience, it is the importance of planning for the unexpected.
This mindset allows you to keep your focus on compliance with the new lease accounting standards. As you prepare, be confident that a greater understanding of your lease accounting position will help you answer important questions and solve problems later on.
2. Prepare your lease accounting data
To prepare, gain a greater understanding of the leases you have across your entire organization. Here’s how you can begin:
- Gather your lease population information. Whether you have many leases or a smaller portfolio, be methodical about how you gather your data. One piece of advice: Don’t do it by yourself. Bring in a specialist who can equip you with a template and a simple process for gathering the most essential details of your leases.
- Collaborate with key stakeholders. Many companies are not aware of all their lease agreements. To overcome this gap in visibility, create and communicate a system for departments to report their leases.
- Be diligent in the details and avoid rework. Gathering complete data is time-consuming but essential. As you prepare your data, ask important questions like, are there options to extend the lease? Are leases attached to an index? Are the leases contingent on external events such as revenue share? It takes less time to resolve these types of questions before you input your leases than to deal with inaccuracies later on.
3. Invest in the right lease accounting software
If just thinking about preparing your data in this way gives you a headache, you might need to invest in software that can quickly and accurately help you calculate your leases.
Explore these four essential areas when you’re considering lease accounting software:
- Ease of installation. How easy is the software to download? Does it allow you to be up and running in a matter of minutes?
- Accuracy. What types of calculations will you need? How accurate will they be? How will the software help you to meet compliance requirements with ease and accuracy?
- Simplicity. How simple is the software to use? Are the features complex or overkill for what you need?
- Effectiveness. Was the platform designed for lease accounting? Or is it too general because it has been adapted from a different platform altogether?
If you’re like most of the accounting professionals we have helped navigate through the new lease accounting standards, the issue is not whether you can calculate to meet compliance; it’s about your need to focus on greater priorities. You’re highly skilled and you can learn the new standards and calculate the leases. But choosing lease accounting software that is accurate, simple to use, and easy to install can help decrease your workload – so you can focus on higher-value projects.
