The Background
InfraBuild are Australia's only fully vertically integrated steel manufacturer spanning scrap metal recycling, steel manufacturing and downstream distribution.
With over $5 billion in revenue per year, and 5000 staff across Australia, Hong Kong, China, USA and Poland, InfraBuild required a new lease accounting software solution that was cost-effective, simple to understand, and stand-alone so it could be centrally implemented but accessed on a decentralised basis, across all of the company’s global locations.
The organisation had originally transitioned to IFRS 16 in July 2019, using a US based lease accounting software vendor. However, this quickly presented some month-end process challenges at the corporate level.
Their original software provider did not have a dedicated GL function with detailed ERP mapping of transaction types and GL accounts. Therefore, as a workaround InfraBuild had to use Alteryx analytics software to create a GL template, and then complete a lot of manual conversions to generate the journals for their month-end process. This took 4-5 days a month to complete, greatly impacting on all seven of their business areas, as all seven finance business partners had to run this process, then at the corporate level they had to pull it all together.
Relying on Alteryx was also adding to the time and costs. Not being IT experts, when InfraBuild’s finance team were faced with Alteryx IT technical issues, they had to outsource to a Big 4 consultant to fix. The total costs from external third parties and extra internal resources were starting to add up.
The Change
After running this inefficient, and expensive month-end process for multiple years, they started to research potential new lease accounting software solutions. After talking to their trusted advisors, they were given a couple of suggested options. From these they narrowed down their short list to two vendors.
After the consultation process, LOIS lease accounting software (delivered by Quadrent) was chosen as a more cost-effective option with a robust GL functionality and mapping process. The detailed GL mapping structure in LOIS means that all the necessary information is included in the GL export file, that can then seamlessly be uploaded into any ERP.
The Outcome
The LOIS implementation is now shaving 2-3 days off InfraBuild’s month-end process, especially when using LOIS’ bulk upload functionality for new leases and modifications. Additional time saving is achieved due to the elimination of manual intervention when creating their journal file. They are now also able to run real-time IFRS 16 reporting whenever they need to.
In addition to the standard LOIS features, InfraBuild also added our ‘Sandpit’ add-on feature. The Sandpit is a budgeting and forecasting tool (which was not available through their previous software solution). It is designed to let LOIS users model and investigate the financial impact of future adjustments to their lease portfolio without impacting the live data.
Initially, the migration of 1600 leases can seem like a daunting task. However, LOIS’ local team of chartered accountants are lease accounting experts that were on hand to ensure the process went smoothly with very few reconciling differences.
Program Director, Hayley Williams, was able to support InfraBuild throughout each step of the migration process, assisting in manipulating their data into the LOIS bulk lease upload template, and helping to identify and rectify any reconciling differences at the end of the process to ensure no material adjustments were required.
Program Director, Hayley Williams, did a great job helping us migrate 1600 leases to LOIS with minimal impact, supporting us promptly with any technical issues. Using her experience and expert lease accounting knowledge, she was also able to help us optimise our month-end process through LOIS.
Shirley You, Group Financial Reporting Manager
At Quadrent, we provide our clients with lease accounting software solutions designed to manage and report on leased assets. We work to deliver long-term cost-savings across your organisation and assist with all facets of equipment finance needs, from providing operating leases to asset management, IFRS 16 compliance and reporting. Our world-leading LOIS lease accounting solution is designed to assist in creating a robust process that effortlessly guides you in accounting for all leases to maintain compliance with IFRS 16 and uncover hidden ROI savings within leasing.
Discover how leasing can be a cost-effective and efficient way to access and manage the assets your business relies on.
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