It’s National Scavenger Hunt day! And many accounting organizations are in the midst of a scavenger hunt of their own. Not just today, but all year-long accounting teams will be searching through file shares, document repositories and enterprise applications for copies of their leasing contracts. Below is a list of 15 recommendations on where to find your lease agreements.
Are you looking for ways to accelerate your lease accounting project? Read our ten strategies for speeding up the implementation cycle and lowering your risks. Learn short-cuts you can take throughout the lifecycle of the project – whether you are just getting started or have already started shopping for software.
With the implementation deadlines for the new lease accounting standards approaching in the coming years, many Controllers and accounting organizations are considering Lease Accounting Software. At some companies, the business justification for investing in a specialized software application is straightforward. Developing the systems, processes and controls to support major accounting changes is viewed simply as a “cost of doing business.” But at a number of other companies we have spoken to, there may be a need to provide a more detailed business case to support the investment.
With the deadline for the new lease accounting standards getting closer more and more companies are beginning the process of collecting data needed for the transition. At first glance, the process to collect lease accounting data seems straightforward. Read each of the lease contracts and extract key terms such as base and variable rent; payment frequency and timing; and end-of-term options. But before you jump head-first into reading contracts, we would recommend taking a few minutes to understand the common pitfalls and mistakes that other companies have made collecting lease accounting data.
For many companies the data collection process will be the biggest implementation hurdle on the path to complying with the new lease accounting standards. Few organizations have a centralized repository to track all of the information about their real estate and equipment leases. As a result, companies will need to go through a process to identify which data needs to be collected and where to find it. Once located the data will need to be abstracted from contracts, validated to ensure its completeness and reconciled between systems to confirm its accuracy.