The Scoop on ASC 250: Accounting Changes, Restatements, Errors, and ...
Overcoming Lease Accounting Hurdles With Technology
Accounting departments aren’t what they once were and that, our friends, is a good thing. That’s not to say, of course, that the traditional and somewhat static perception of accountants from decades past was ever necessarily bad or even accurate. However, given today’s dynamic, ever-changing world of digital transformation, accounting and finance are now vanguards of technology for forward-looking enterprises and that, once again, is a very good thing when promptly embraced and effectively implemented.
As Exhibit A for this notion, Embark asks you to look at the recent and significant changes in lease accounting brought on by ASC 842. While our guides to the changes for both lessors and lessees are undoubtedly helpful, transitioning to the new standards can still be a laborious, involved process that consumes time, effort, and resources better spent elsewhere.
That is precisely where technology can play such an impactful role in something like the new lease standards. Rather than devoting already limited resources to the transition, technology can actually add value to the process, infusing it with a streamlined efficiency that allows enterprises to dedicate those resources towards other areas that target growth and innovation. Simply put, technology can significantly ease your lease accounting woes, and Embark is just the group of experienced folks to show you how.
Start With the Right Software
Choosing the right lease accounting software is an integral part of realizing the tremendous efficiencies offered by streamlined, accurate data. Obviously, you want to use the most appropriate solutions for your enterprise's specific goals and demands, ideally from a well-respected vendor with significant experience in lease accounting that adheres to any required compliance standards. When going through the many options currently available in the marketplace, pay particular attention to the platform's ability to handle specific needs like lease portfolio characteristics, foreign currency translations, and international reporting standards if applicable to your operations.
Likewise, the lease accounting platform should be user-friendly with a straightforward UI, robust modules to mold itself around your needs, and produce pertinent disclosure reports. With key members from your accounting department, form a cross-departmental team that will evaluate the current state and guide the scope and direction of future state processes involving procurement, asset management, and month-end close procedures.
Embark can be a valuable partner in this particular stage, not only helping you choose the most appropriate vendors and products but also guiding you through the implementation process to make sure your lease accounting platform functions properly and according to your expectations.
Efficient Processes, Accurate Inputs
Centralized and efficient processes are the heart of accurate and reliable accounting, not just in lease operations. However, considering the many moving parts involved with lease transactions, the efficient collection of information, as well as accurate data inputs, makes technology especially potent for your lease accounting needs.
While many organizations hear terms like processes and inputs and immediately think of robotic process automation (RPA), Embark prefers to take a far more agnostic approach to the tools and technology we recommend and implement. Yes, RPA is absolutely astonishing within its range of core competencies but, when it comes to lease accounting, Embark happens to think that other solutions might be more appropriate.
Of course, no two enterprises are alike and processes are like snowflakes between different companies so it’s always a matter of what technology solutions fit your specific needs and goals best. No matter what solution or set of solutions is most appropriate for you and your lease accounting, however, proper implementation is of paramount importance. Always be certain to invest sufficient time and resources towards understanding your enterprise's particular demands as well as the processes that will yield the most benefit from technology. Otherwise, you're defeating the entire purpose of implementing technology in the first place, not just for your lease accounting procedures but the entire organization as well.
Improved Decision Making
Between the streamlined data throughput from an effective lease accounting software platform to the remarkable accuracies, value, and efficiencies afforded by RPA-driven processes, accounting can quickly become a vital source of reliable information for your decision-makers while also conveniently monitoring your lease transactions. With technology, management can make fully informed, well-educated decisions on lease events including amendments to add or remove assets and lease term options like duration, terminations, and renewals.
The right lease accounting platform will produce standardized reports customized to your organization's specific needs, allowing your enterprise to make quick but sound decisions on lease agreements that can drive everything from renewal options to proactive asset management.
The centralized data gathered, organized, and streamlined through technology can also vastly improve communication between your different departments, eliminating the information silos between diverse teams like purchasing, real estate, IT, and accounting. In other words, your accounting team can be a critical linchpin to all levels of the organization, providing reliable financial analysis on lease spend and help guide future strategy.
Accounting is changing with the times, now a crucial component of strategy rather than the straightforward number crunchers of old. Given the high degree of fluidity and mobility required to navigate a dynamic lease environment successfully, technology can lend your lease accounting accuracy, efficiency, and productivity that will benefit your entire enterprise. Let Embark show you the value that lease accounting systems, RPA, and other innovations can bring to your lease operations. ASC 842 doesn’t have to induce night sweats in this brave new world when Embark leads the way.