Two main reasons explain why a majority of companies are far behind the pace of change of standards. First, most companies are still focused on implementing another big accounting change―revenue recognition (ASC 606), which has deadlines starting at the end of 2017. Second, many of the software vendors who offer lease accounting applications are not yet ready to support the new standards. Attendees at the FEI conference expressed concerned about their ERPs not being able to cope up to the accounting demands of the new standards, and the impact it will have on their auditing trial.
LeaseAccelerator offers an Enterprise Lease Accounting software application designed to help companies transition from the current Accounting Standards Codification (ASC)840 and IAS 17 in use today to the newer ASC 842 and IFRS 16 starting in 2019. “We are one of a few companies ready to support the new standards today, because we started building our accounting engine back in 2009 and have evolved in lockstep with the changing rules,” said Michael Keeler, Founder and CEO of LeaseAccelerator.
Our software was built from the start to support the controller’s need to manage lease accounting across the enterprise
Keeler regards the ‘competitive sourcing’ capability to be a rare example of a solution that satisfies compliance requirements but also offers a significant cost savings opportunity. This capability surfaced when the CFO and Treasurer of Cummins Inc., a diesel and natural gas engine manufacturer, was looking to improve equipment leasing processes. With LeaseAccelerator, the company reduced cost of equipment leases, established policies and controls, prepared for new lease accounting standard, and experienced better lease portfolio management with increased visibility. As a result, Cummins Inc. embraced an average cost savings of 8 percent per lease.
Operating in the multi-trillion dollar global leasing market, LeaseAccelerator is poised to disrupt it. Summarizing the idea, Steve Keifer, VP of Marketing at LeaseAccelerator says, “Leasing is one the last few big business processes in corporate America that has not been disrupted with technology. But that is about to change. The new lease accounting standards are forcing companies to rethink their approach to leasing and the role that technology can play.”