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Estimating the Implementation Timeframe

How long will it take to comply with the new accounting standards? Estimates vary from 6-12 months to 12-24 months. The real answer is that you won’t know until you get started and get knee-deep into the analysis. In our experience, the project implementation time frame will be influenced by the current state of your lease accounting, the complexity of your equipment leasing program, and the availability of key stakeholders to participate in the project.

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Creating a Project Plan

As with many major projects, the more investment you make upfront to properly scope, cost, and plan for the project, the lower the risk of a delay or budget overrun. A critical first-step in implementing the new lease accounting standards is defining a project plan. You will need to identify the major phases of the project – assessing the current leasing program, selecting a software vendor, collecting leasing data, applying the accounting policies, and transitioning to the new standard. You will also need to identify the key milestones, approximate timeframes, and task owners. Get a head-start by downloading our customizable project plan template.

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Developing a Budget

A key factor in the success of your lease accounting initiative will be dependent upon properly budgeting for the incremental resources and costs needed to successfully complete the project. Most companies will need to purchase a specialized lease accounting software application. And they will need to get help from outside consultants to implement the software – especially with collecting and populating all the necessary leasing data. However, lease accounting budget planning will be challenging as there are few, if any, external benchmarks available to use as a foundation for your estimates. No large companies have implemented the lease accounting standards yet.

Beyond Compliance – Optimize to Save 10% on Your Leasing Program

The Silver Lining of the New Lease Accounting Standards

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Making a Business Case for Investment in Lease Administration

Accelerate Your Lease Accounting Budget Planning Cycle by Demonstrating an ROI from the Project

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Savings from Equipment Lease Management

At most companies the leasing processes for IT, fleet, and equipment leases have been neglected with little investment in processes or systems to manage these assets. As a result, many companies have highly inefficient equipment leasing programs that are creating unnecessary costs and performance drags on the organization. The good news is that you may realize seven-figure cost savings in the next 12 to 18 months by implementing best practices for equipment lease administration.
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Savings from Real Estate Lease Administration

At many companies the real estate leasing process has not yet been fully optimized. Subleases are poorly managed, over-billing by landlords goes unchecked, and critical contract dates to expand or renew at discounted rates are missed. Case studies have demonstrated that companies that apply best practices to real estate lease administration can realize savings of 2-4% of their real estate portfolio.

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Savings from Lease Accounting

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.” However, 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..
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Next: How to Implement?

Learn How to Find All Your Leases and Implement ASC 842 and IFRS 16