It’s been more than six years since the first implementation deadline of the “new” lease accounting standards. Although the standard has become business as usual, some companies may be finding their current lease accounting solution is not as efficient as they initially believed. Many companies decided to account for their leases in Excel and are realizing a lease accounting software solution would provide better audit documentation and faster, more detailed reporting.
Lease Accounting Software Transitions: Common Challenges
The implementation of the lease accounting standards was a significant undertaking for many organizations. The prospect of transitioning to a new software solution, even with the promise of increased efficiency, can be just as daunting, particularly because it often necessitates the re-entry of all lease data. Recognizing this challenge, FinQuery has developed a solution to simplify the process of switching from your current lease accounting software to the LeaseQuery platform.
One of the main challenges in transitioning between lease accounting software solutions lies in the calculation of the lease liability’s present value. Although the lease accounting standards require the lease liability to be measured at the present value of the lease payments, they do not provide an explicit formula for this calculation. This lack of a standardized formula can lead to calculation discrepancies between different software solutions or when performing the calculation manually in Excel. Reconciling these differences when switching to a new software can be a complex and time-consuming process.
Furthermore, variations can also arise from the way a particular solution calculates the short-term liability or rounds the straight-line total lease expense. These inconsistencies, while seemingly minor, can result in variances that are undesirable from an accounting perspective. Accountants strive for precision and accuracy, where numbers balance to the penny. Therefore, the prospect of switching software solutions and introducing potential variances is far from ideal.
How to Overcome Lease Data Migration Obstacles
LeaseQuery’s Existing Balance Migration solution is designed to facilitate the seamless transfer of your current lease data into LeaseQuery. This solution eliminates the need for historical data entry and reduces the complexities associated with transitioning to a new lease accounting software provider.
Migrating to a new lease accounting software can seem daunting, especially if you’re mid-lease. But with LeaseQuery’s Existing Balance Migration feature, transitioning your lease accounting onto our platform is easier than you might think.
Here’s how it works:
Start at Any Point in Your Lease Term
You have the flexibility to begin your lease accounting in LeaseQuery at virtually any point during the lease term. Simply select your desired amortization start date, and LeaseQuery will handle the rest.
No Need to Recreate History
Forget about the tedious task of recreating past lease actions or inputting all your historical data and previous lease changes. With Existing Balance Migration, you only need to provide your current lease liability and right-of-use (ROU) asset balances.
Easy Data Entry
Focus on the future, not the past. You only need to input payment details from the migration date forward, along with a few other key data points. This simplifies the transition process and saves you valuable time and effort.
Automated Amortization and Journal Entries
LeaseQuery takes care of the heavy lifting. Once you’ve provided the necessary information, our software automatically generates the amortization schedule and journal entries needed to transition your lease accounting onto the platform.
Benefits of Existing Balance Migration:
- Simplified transition: Easily migrate your lease accounting without recreating historical data.
- Time savings: Reduce the time and effort required to get started with LeaseQuery.
- Improved accuracy: Minimize the risk of errors associated with manual data entry.
- Faster compliance: Get compliant with lease accounting standards (ASC 842, IFRS 16, GASB 87) more quickly.
Leverage the Benefits of LeaseQuery
Once your leases are migrated to LeaseQuery you can leverage the benefits of the solution’s AI-powered lease entry, excellent support services, and detailed lease accounting solution. LeaseQuery’s AI-powered lease entry automates the extraction of key lease data from lease agreements, reducing the risk of manual errors and saving valuable time. Our dedicated support team is available to provide assistance and guidance whenever you need it. And our comprehensive lease accounting solution ensures that you have the tools and insights you need to effectively manage your lease portfolio and comply with the latest lease accounting standards.
