One thing we hear from prospective clients who use Excel to perform their lease accounting is “we just have a few leases and do our calculations manually.” For some of the larger companies we hear “our adjustments are not material and it has a low audit risk.” Both are valid statements, but besides the obvious risk of errors, what are often overlooked include:
- Cost to the organization in maintaining lease agreements
- The additional time added to the monthly close cycle
- The opportunity to proactively manage all the company leases as you would your fixed assets
The whole intent of the lease regulations was to treat leases as assets and liabilities, but unfortunately in some situations it has just became a calculation required for financial reporting.
The Black Owl lease accounting solution was created not only to provide accurate calculations for the IFRS and US GAAP lease accounting standards, but to truly optimize and streamline how lease information is captured and reported.
The regulations for lessee and lessor accounting are complex. Just using Excel to create lease schedules and journal entries misses so many of these important calculations. Black Owl Lease provides a reliable system of record, strong audit trails, robust access, and change controls, in addition to eliminating the risk of errors or misstatements.
In today’s global economy, time is limited, and staff must take on more roles and responsibilities. This increases the risk of errors and takes time away from other key financial management activities.
As many of you prepare for your upcoming year ends, please take a moment to consider how you manage your lease accounting today and consider that there is a better way.
We look forward to showing you how we can help improve your lease accounting practices and processes.
The team at Black Owl Systems wishes everyone peace, joy and prosperity throughout the coming year.