Addressing the biggest questions, related to the implementation of IFRS 16 software
Whenever a new regulation, rule and/or law comes into effect, businesses have to make amendments and changes to the way they do certain things. With regards to leasing accounting, the name of the game is now IFRS 16. It’s the latest in lease accounting standardization and is the most recent and up-to-date set of rules, according to which, businesses must conduct this form of bookkeeping. It would be too challenging without the help of IFRS 16 software on hand, but just saying that it will solve all the issues won’t convince everyone. In this article, we’ll focus on the biggest questions that entities have with regards to IFRS 16 lease accounting software and its implementation.
First off – how much is the IFRS 16 software worth to a business?
In any way shape or form, investments have to pay off. Whether it be monetary value or other benefits, if you spend money on something, you want to get that money back (and then some). So, it’s only logical to wonder whether buying and/or licensing IFRS 16 software is a worthwhile investment.
From the angle of most of its users and those who chose to implement it – yes, it is worth it. To begin with, you have a centralized source of data, related to all leasing accounting. Numbers, forecasts and other important data points aren’t scattered around and instead, can be found in one spot. Old data (e.g. Excel spreadsheets) can usually be imported for more continuity. IFRS 16 accounting software also should reduce the total time it takes to complete certain manual tasks.
Case studies from various developers and their clients have shown that even mid-sized teams saved over 10 hours each week, just from having such software set up. Multiply the cost of 10 working hours and you have yourselves an area worth five-figures of savings annually.
Is the software adaptable?
Moving on from the value of the investment, and now sceptics could worry about whether the software tool is adaptable to the local needs of their company. Even though the IFRS 16 standard is the same everywhere you go, there are some unique nuances to every accounting operation, making almost every single company unique in this regard. But, the fact of the matter is that if you make the right choice, your dedicated IFRS 16 lease accounting software can even be module, ready to be tailored and built around your ever-changing needs.
Cloud-based software tools are especially great in this regard. Making changes and needed alterations for those tools is more than quick, with devs and IT teams being able to update and/or rework your access map and the list of available tools within a day or two… That’s immensely quick, especially considering that updates and changes to a software tool, installed on-premises would disrupt the entire process chain whilst cloud-based tools can be updated during night time and without too much disruption whatsoever.
How well will it hold up to the test of time?
When introducing something like a new software, businesses have to be sure that it will hold up for the long-run instead of being something that’s only valuable for a day. With a set of outlined rules like there is with IFRS 16 standard, nothing major will probably change for a while. Even with minor improvements, there isn’t a need for huge overhauls for the interface as well as the feature list. This means that over time, your software shouldn’t really lose functionality. This means that tenured employees will only get more used to it and that should bring a smoother introduction process for newcomers to the organization.
It’s really short-sighted to believe that the needs of your organization are going to stay the same. If business relies on stability all the time and isn’t embracing change every once in a while, it can lead to stagnation and loss of market share. That is a slow but sure road towards going out of business which means that each and every niche, area and crevices of these areas must be explored looking for new and improved opportunities. Most IFRS16 software tools are continuously updated as the developers try to make their tools relevant and up-to current demands of users.
Is it better than plain simple calculators?
Some accounting teams have been using calculators. And as they’re usually cheaper than IFRS 16 software, they’re not nearly as functional and lack the depth, needed for high-quality lease accounting. If you have a very small amount of data to handle, an Excel template might be enough but for companies with client portfolio, variable rates and a very high attention to detail, IFRS 16 leasing software for accounting is by far the more superior option.
Calculators won’t get updates; they won’t necessarily even house the features which you need the most.
How hard is it for new staff to learn the use of IFRS 16 software?
Moving on from software to another or transitioning from one way your staff was used to doing their job, to another is hard. And the most challenging part is training and/or retraining current or future staff on the nuances and intricacies of the new software. Luckily, most developers offer live demos and training programs that help users get up to speed quickly.
For example, when you have a software tool that’s based on Microsoft Dynamics, it is going to have a familiar feel and look to the Microsoft Office suite that everyone already knows and uses. Such a similarity makes the transition and learning curve – smoother.