Toward the end of 2020, we published a Lease Accounting Holiday Wish List for organizations that still need to adopt ASC 842, IFRS 16, and GASB 87. This is the fifth in a series of articles to provide detail for each of those wish list items.
5: Early Vendor Involvement
With many companies yet to adopt the new standard, we urge the decision-makers to pick vendors early to take advantage of the benefits that come with early vendor involvement.
The best analogy we can provide is to relate this to building a new home for your family. Would you try to do it yourself? Unless you have done it before, the answer is likely No – you wouldn’t try to build the house yourself. Now, let’s assume you’ve selected your builder and you have the anticipation of your dream home being completed in 8-12 months. Would you choose to get the builder involved prior to picking your lot, or wait until after you select your lot alone? What if your lot can’t handle the fully finished basement you had in mind? Or what if there isn’t the space for the driveway you wanted? Perhaps you didn’t think to check the local utility lines coming to the lot and therefore can’t have the gas range you planned for. In this hypothetical situation, the builder would eventually tell you your options would be to either spend more money to customize and correct – which requires more time or proceed against your original wishes.
Most would tell you to get the builder involved prior to picking your lot. This way, you can communicate your hopes, plan, and set expectations to ensure you have the best chances of getting your dream home on time and on budget.
The Lease Accounting implementation projects are similar. Trying to do this alone can likely result in many delays, headaches, workarounds and budget restraints as it will cost more than expected. You will likely either end with a product that is different than originally planned in order to stay on time and on budget, or eventually, you will get the ideal product but many months (or years) and dollars later. If you find yourself in this situation, you may realize in the middle of the project that it’s time to hire a vendor who has the needed experience to help get back on track.
We have seen this happen on several occasions – resulting in added time and added dollars to the project.
Take advantage of the fact that you are a Private company, yet to adopt the new standard. Vendors like Jackson Cross Partners have taken many clients through transition. Our experience of doing this many times makes us qualified partners.
Pick your vendors early. Take advantage of the experience we have in this space. Take advantage of our public company and early adopter clients who can serve as references for your teams. And don’t make the same mistake others before you have made in trying to do this alone.
We are ready for you.