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Revolutionizing Logistics & Supply Chain Efficiency through Advanced Data Engineering
Business Problem
The business problem in this case study is the need to implement and configure accounting standards (ASC 842, IFRS16, and IAS 17) for lease assets, transaction types, and classification types. The company is in the FMCG industry and was facing challenges with managing their lease assets, determining the correct accounts to be used, and ensuring compliance with accounting standards. This was causing a lack of visibility into their lease assets and negatively impacting their financial reporting and decision-making.
The company needed a solution that would allow them to configure and implement accounting standards for lease assets, including ASC 842, IFRS16, and IAS 17. They also needed a way to design asset classes for lease assets, determine the correct accounts to be used, and establish a process for manual depreciation. Additionally, the company needed a way to handle statistical postings from SLAN to SAP and define asset classes for synchronization with equipment master.
Furthermore, The company was struggling with compliance, regulatory and legal requirements and needed a solution that would provide them with the necessary data and reports to meet these requirements.
Overall, the company needed a comprehensive solution that would help them manage their lease assets more effectively, ensure compliance with accounting standards, and provide them with the information they needed to make better financial decisions.
Business Solution
The business solution for this case study was the implementation of a contract management system called SLAN (Lease Administration System). SLAN is specifically designed to comply with the new IFRS16 and 842 accounting standards, which state that operating leases should be recorded as ROU (Right of Use) assets and show on the balance sheet instead of just as an expense item in the P&L.
SLAN integrates with the company's general ledger (GL), fixed assets, and accounts payable systems. As part of the implementation, ROU asset classes, GL accounts, and transaction types were configured in the company's SAP system to accommodate the postings from SLAN. This configuration ensures that the lease assets are recorded correctly and in compliance with the accounting standards.
SLAN also provides a process for manual depreciation of the lease assets, which helps the company to maintain accurate financial records. The system also includes statistical postings from SLAN to SAP and defined asset classes for synchronization with the equipment master.
Overall, SLAN is a comprehensive lease management solution that helps the company to comply with accounting standards, manage lease assets more effectively, and provide them with the information they need to make better financial decisions. It integrates with GL, Fixed assets and Accounts Payable. As part of the pre-requisites ROU Asset Classes, GL accounts, Transaction types are configured in SAP to accommodate the postings from SLAN.
Technical Solution
The technical solution for this case study involved implementing a contract management system called SLAN (Lease Administration System) to help the company comply with accounting standards, manage lease assets more effectively, and provide them with the information they need to make better financial decisions.
The data is uploaded to the SLAN system via excel upload templates. There are separate templates for the MLA upload and the contract uploads. The data is uploaded in a disconnected mode, where the levels of approvals are followed. The MLAs are uploaded first, and then mass approved. Contracts and lease components are uploaded next, and then mass approved.
Once the contracts are mass approved, the system completes the assessment and classification, after which the assets are created and capitalized. The system runs the payments for these contracts in a batch input method in the background for catch-up, which is done in a disconnected mode. This ensures that the lease assets are recorded correctly and in compliance with the accounting standards.
Overall, the technical solution implemented in this case study was a contract management system called SLAN. It helped the company to comply with accounting standards, manage lease assets more effectively, and provide them with the information they need to make better financial decisions. The data is uploaded to the SLAN system via excel upload templates and the system runs the payments for these contracts in a batch input method in the background for catch-up. This ensures that the lease assets are recorded correctly and in compliance with the accounting standards.
Technologies
The technology used in this case study is a combination of SAP FICO and a contract management system called SLAN.
In this case study, SAP FICO was used to manage the company's financial data and processes, including accounts payable, general ledger, and fixed assets.
SLAN (Lease Administration System) is a contract management system specifically designed for lease administration. The purpose of SLAN is to be able to comply with the new IFRS16 and 842 accounting standards which state that the operating leases should also be recorded as ROU assets and shows on the balance sheet instead of just as an expense item in the P&L. SLAN mainly integrates with GL, Fixed assets and Accounts Payable. As part of the pre-requisites ROU Asset Classes, GL accounts, Transaction types are configured in SAP to accommodate the postings from SLAN.
SAP FICO and SLAN were integrated to provide a comprehensive solution for managing lease assets and complying with accounting standards. The data is uploaded to the SLAN system via excel upload templates and the system runs the payments for these contracts in a batch input method in the background for catch-up. This ensures that the lease assets are recorded correctly and in compliance with the accounting standards.
Overall, the combination of SAP FICO and SLAN provided the company with a comprehensive solution for managing lease assets, ensuring compliance with accounting standards, and providing them with the information they needed to make better financial decisions.
Customer Success Outcomes:
Compliance with accounting standards: The SLAN system helped the company to comply with the new IFRS16 and 842 accounting standards for lease assets, which ensured that their financial reporting and decision-making were accurate and in compliance with the regulations.
Improved lease asset management: The SLAN system provided a comprehensive solution for managing lease assets, which helped the company to determine the correct accounts to be used, establish a process for manual depreciation, and ensure compliance with accounting standards.
Increased visibility into lease assets: The SLAN system provided the company with a clear and accurate view of their lease assets, which helped them make better financial decisions.
Improved data integration: SLAN system integrates with the company's general ledger (GL), fixed assets, and accounts payable systems. This helped the company to have accurate and timely financial data.
Efficient process for lease management: The system uses excel upload templates for data upload, mass approvals, assessment and classification of lease assets, and payments for contracts. This helps the company to have an efficient process for lease management.
Reduced manual workload: The system allows for mass approvals and batch input method for payments, which reduces the manual workload and improves efficiency.
Overall, the customer was able to comply with accounting standards, manage lease assets more effectively, and provide them with the information they needed to make better financial decisions. The SLAN system helped the company to have accurate, timely, and compliant financial data and improved the process for lease management.
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