Talent and Staffing – A Key Challenge for Lease Accounting
To comply with the initial deadlines most companies started with a project team staffed with a mix of headquarters personnel and outside consultants. Accounting policy and financial reporting experts from the Controllers staff set new policies, selected new systems, and defined new controls. Staffers from consulting firms did much of the heavy lifting by reading through leasing contracts, abstracted data, and loaded it into systems. Once implementation was completed, the project team needed to be replaced with full-time, in-house personnel.
Given the technical accounting complexity associated with leasing, some companies decided that a new shared service center needed to be created using a similar structure to those already in place for payroll, fixed assets, and collections. The specific roles and responsibilities vary from company to company, but all lease accounting centers of excellence own the record-to-report lifecycle performing key functions such as booking and classification of new leases, modifications and reassessments of existing contracts, and accounting for termination and buyouts at end of lease.
Industry Benchmark Study
In December 2019, we surveyed approximately 100 companies about the staffing, responsibilities, challenges, and benefits realized from their new lease accounting centers of excellence. Survey respondents were finance and accounting professionals at US-based publicly traded companies with over $1 billion in annual revenues. Our goal was to establish an industry benchmark that companies could use to compare the resource levels, organizational models, and talent profiles of their leasing centers of excellence to those of their peer group. The results of the study are outlined in the infographic below.