Whether you’re adopting GASB 87 or GASB 96, transitioning to the new standards is a process that, while may feel overwhelming, can be much easier with the right tools. If your organization is struggling to adopt the new standards, it’s time to consider using a reliable software solution.
This article breaks down the best reasons and rebuttals to use when convincing your board to approve the expenditure for a GASB software solution.
Explore the pitfalls of Excel
Excel is one of the most commonly used tools for accounting. While your organization may already be using Excel for some of its accounting and financial reporting tasks, it isn’t the best option for your transition to GASB 87 because it can hinder compliance.
To help make this case, it’s important to properly explain all of the pitfalls that come with using Excel to your board. Some of the biggest problems with Excel include:
- Lower reporting accuracy
- Data security risks
- A massive time commitment
- Extensive lease maintenance
- Little visibility into lease changes
Excel may seem like one of the least costly options for compliance, but this does not factor in the potential for manual errors and extensive revisions. Investing in a reliable lease accounting software to transition to the new standards leads to a lower overall cost when you factor in the employee time saved.
Justify the investment
One of your most challenging tasks is convincing your board to spend money. Accounting is viewed as an overhead or support service and should not require capital expenditures. However, investing in reliable accounting software will end up saving your organization time and money in the future.
The penalty for not accurately transitioning to the new standards is steep, including restatement of financials, loss of your constituents’ confidence in the organization, and potential fines. With these costs, your organization cannot afford to not use any solution available for transition. Yet, your board might not appreciate hearing these less than positive outcomes. Instead, justify the necessity for a software solution by focusing on what can be gained:
Increased efficiency
A software solution purpose built for lease accounting with government accounting in mind can help prepare the transition journal entries necessary for compliance and the conversion entries for annual governmental reporting in accordance with the requirements under both GASB 34 and GASB 87.
With lease accounting software, you can transition and conduct new accounting going forward without adding to the current headcount. You may even reduce the workload of the staff already present, allowing employees more time to use on other tasks.
Comprehensive reporting
One of the silver linings of converting to the new lease accounting standards is greater visibility to your lease portfolio. With software, you can take this perk even further. When all of your lease data is entered into one system, budgeting and forecasting rent expense becomes an effortless task. Customizable reports allow you to fulfill any ad hoc reporting request from management with ease.
Audit preparedness
Improving the auditing process can save you time and money. When you use lease accounting software, you are able to grant your auditors read-only access to your lease accounting documents and reduce the amount of time your staff and the auditors required to gather documentation. A system-based audit trail is accurate and thorough, so there are no surprises for you or your auditors.
Prevent employees from experiencing burnout
Transitioning to the new standards is a major endeavor that will impact most of your organization in some way, but will particularly affect accounting functions. Managing it without the right tools can leave employees feeling overwhelmed. Acquiring a software solution sends the message that you value your employees’ time and can function as a morale booster for your team. In the midst of The Great Resignation, any perceived advantage for employees is helpful.
Summary
Using a lease accounting solution like LeaseQuery as you adopt the new GASB standards is the smart move for your organization. While building your case to your board may take some time and research, it’s worth it to unlock financial insights and ease your adoption of the new standards. Organizations that have invested in software solutions are more effective at tackling the transition.
Be fully prepared to convince your board. Schedule a consultation and demo of LeaseQuery to see our accounting software in action.
