Why using spreadsheets is a risk when it comes to IFRS 16 compliance

According to a poll in a recent Quadrent webinar with Deloitte South Africa, 74% of attendees still rely on Excel or other spreadsheet software to manage their lease accounting compliance, despite IFRS 16 being in effect since 2019. While spreadsheets may have been a quick fix during the initial transition, they’re now a source of inefficiency, risk, and missed opportunity.

Why are so many businesses still stuck in Excel, and more importantly, what can they do to move forward?

“Just get it done”

When IFRS 16 came into force in 2019, most finance teams were under pressure to comply quickly. The result? A scramble to gather lease data and build basic models in Excel. For many, that spreadsheet became the default solution and is still in use today.

People got used to the extraneous effort of pouring hours and hours into a spreadsheet each month to realise data changes. This “Stockholm Syndrome” of compliance, where teams become numb to inefficiencies such as manually inputting lease data into a spreadsheet, has led to a culture of acceptance, and finance teams often don't have the resources to consider alternatives.

The risks of staying with Excel

Excel is flexible, familiar, and free. But it’s also fragile. Webinar panellist Werner Roetz, Partner at Deloitte South Africa, highlighted a common issue:

“Someone goes in to extract a number and breaks a formula. Suddenly everything breaks.”

Here are just a few risks of relying on spreadsheets for IFRS 16:

• Formula errors that go unnoticed until audit time
• Version control issues across multiple users and files
• Manual data entry leading to inconsistencies
• Limited visibility into lease modifications and renewals
• No audit trail or system-level controls

These risks aren’t just technical - they’re strategic. Poor lease data can lead to inaccurate reporting, missed renewal deadlines, and costly audit findings. Switching to a purpose-built, IFRS 16-centric lease management platform is an important step to streamlining your business and reducing risk.

Why change feels hard

Many organisations hesitate to move away from Excel because they fear the complexity of implementing a new system. However, as Werner pointed out:

“This isn’t a full-blown ERP implementation. It’s a digitalisation of a specific function.”

The reality is that modern lease accounting solutions are designed to be scalable, user-friendly, and tailored to IFRS 16. With the right partner, implementation can be phased, supported, and far less disruptive than expected.

Manually inputting data into spreadsheets can be a compliance risk, yet 74% of our webinar audience admitted to using this outdated process.

What good looks like

Melissa Du Preez, Senior Manager at Deloitte South Africa and webinar panellist, painted a clear picture of best practice:

• A centralised lease repository with real-time access
• Automated notifications for renewals and renegotiations
• Integrated workflows between property, fleet, and finance teams
• Modelling tools to forecast and assess lease impacts
• Audit-ready outputs with full traceability

This isn’t just about compliance. It’s about empowering teams to make better decisions, faster.

The ROI of doing it right

Compliance is often seen as a cost centre. When done well, IFRS 16 can deliver real value. Some Quadrent clients with thousands of leases now complete their month-end IFRS 16 process in under a day using specialised lease management software solution, LOIS.

That equates to risk reduced, resources freed, and insights gained.

Where to start

If you’re still using Excel, here’s what you can do today:

1. Review your current process: Identify bottlenecks, risks, and pain points
2. Centralise your lease data: Even before automation, get your house in order
3. Explore fit-for-purpose solutions: Look for tools that match your portfolio size and complexity
4. Engage your cross-functional teams: Property, fleet, and finance must collaborate
5. Choose the right partner: Implementation support makes all the difference

Ready to move beyond Excel? Let’s talk about streamlining your IFRS 16 compliance.