End-to-End Management of The Lease Lifecycle - … · As long-term innovation partners with SAP, Bramasol and Nakisa have brought together a ... business planning, etc. Some companies

End-to-End Management ofThe Lease Lifecycle

Taking Comprehensive Control of Your Lease Portfolio

Copyright © 2017 Nakisa Inc. - Bramasol Inc. All rights reserved. 2

Table of Contents 2

Executive Summary 3

Overview of the Lease Lifecycle 4

How Current Lease Administration Processes are Falling Short 5

Initiating A Holistic Approach 6

Comprehensive Step-by-Step Lease Administration Lease Definition Lease Set-up Lease Onboarding Lease Operation Lease Termination

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Putting It All Together 8

Implementation: Next Steps 9

About Bramasol, Inc. 11

About NAKISA® 12

Table of Contents

Copyright © 2017 Nakisa Inc. - Bramasol Inc. All rights reserved.3

Executive SummaryThis eBook provides a step-by-step look at the key elements in the lifecycle of a lease and details how a comprehensive end-to-end administration approach can improve efficiency, save money, reduce risk and assure compliance with new accounting standards.


Overview of the Lease LifecycleIt is not possible to effectively manage enterprise-wide leasing activities without understanding the context of the lease lifecycle. Without this context, leasing too easily can degenerate into a disjointed series of ad hoc decision points with a high risk of key information falling through the cracks.

For example, in many large organizations, the responsibility for initiating leases may be distributed to regional or local facilities but, without comprehensive control over the full lifecycle, subsequent key events can get overlooked. As a result, companies may unknowingly be paying a large price on evergreen leases that should have been reviewed and/or terminated but simply continue on because of the open-loop nature of such disjointed administration practices.Virtually every lease shares a common set of steps in the lifecycle, which can be defined as follows:

• Lease Definition – the “why” and “what” of the proposed lease (equipment specs, ROI, etc.)

• Set-up – the contract details, activation, term, payment processes, etc.

• Onboarding – the receipt, installation, acceptance and operational activation of the asset

• Operation – the payments, accruals, management, servicing, maintenance, etc. of the asset

• Termination – formal close-out of the contract at lease-end or another terminating event

Unless these steps are incorporated within a comprehensive automated lease administration process, your company is at significant risk of losing control over your lease portfolio, which will inevitably result in higher costs, wasted time and lack of visibility into the assets on your books. In addition, without such a process your company will likely be at risk of non-compliance with the new FASB and IASB lease accounting standards (ASC 842 and IFRS 16) that go into effect in 2019.

As long-term innovation partners with SAP, Bramasol and Nakisa have brought together a comprehensive set of solutions and expertise to help companies assess and prepare for the new FASB and IASB leasing standards. These solutions unify disparate leasing data and provide enhanced visibility for companies to make informed decisions on their lease portfolios, assets and liabilities while conforming with the new requirements.

Solutions Knowledge

Processes Experience


Some of the specific problems include:

• Businesses are paying a significant amount of money unnecessarily in evergreen fees for past term leases and lost assets.

• Leases are being managed inconsistently across business units using spreadsheets and other limited scope approaches.

• Lease contracts and records reside on paper in remotely dispersed filing cabinets with no way to provide comprehensive visibility.

• Lack of visibility causes sub-optimal decisions in areas such as lease-vs-buy, asset relocation opportunities and excessive cost of accumulated small-ticket items without an overall view.

• The current disparate processes, such as field-triggered/non-corporate leases, create major challenges in compliance with the new ASC 842 and IFRS 16 standards.

The following sections drill down for a deeper look at the lease lifecycle and detail how use of SAP Lease Administration by Nakisa can lay the foundation for implementing an end-to-end, closed-loop approach that maximizes efficiency, visibility, control, auditability, and cost-effectiveness of company-wide lease administration, while assuring compliance with the new standards.

How Current Lease Administration Processes are Falling ShortIn most companies today, CFOs are largely blind to the real picture of what’s going on in their companies’ lease portfolios.

Accounting Regulations

What do I need to do to prepare? What will be the impact on my financial statements?

Lease Management

How do I manage my leases efficiently?

Wasted Money

Am I paying for lost equipment, past-term leases and penalties?

Visibility

Are leases being signed that don’t have corporate visibility?


The first step on the path toward improved lease administration is to get everything into a single centralized repository. This may seem like a giant step but it is vitally necessary before any other real change can take place. Also, it doesn’t have to be as difficult as you might imagine.

SAP Lease Administration by Nakisa is designed from the ground up to provide a single, unified repository for all relevant lease information. The solution addresses the full lease lifecycle, including approvals and procurement, lease vs buy analysis, data abstraction, and each change event including and up to terminations, extensions, and asset retirement.

A single point of entry is used to collect all lease data into the unified repository, using extensible data collection formats to flexibility capture custom attributes depending on your business processes. The input mechanism also supports mass data importing from multiple contract sources for rapid and complete data capture.

The SAP Lease Administration solution also allows users to upload files and attach them to a specific contract, lease, or leased asset. The solution then allows the user to perform a “Data Tagging” link between the uploaded document and a specific meta data field in the lease solution. This helps with the audit trail and workflow approval process for quick access to the source data from where it was pulled from the master document.

Initiating a Holistic Approach

Within the single-source-of-truth repository, leases can be grouped together using a variety of criteria to allow for efficient posting of accruals and payments in bulk, as well as providing better visibility to avoid penalties, missed payments or e expense of evergreen rentals.

Designed for extensibility, the contract repository can seamlessly integrate related business processes beyond the lease accounting functions, such as equipment and real estate management, supplier management, business planning, etc. Some companies are even using the repository as a convenient method for managing all their revenue contracts in one place to make them better organized for interfacing with revenue recognition accounting solutions.


Comprehensive Step-by-Step Lease AdministrationLease definition is simplified and improved through the discipline of a centralized management process that brings new lease activity into a more formalized process. In addition to asking the right questions on every new lease proposal, the comprehensive approach helps establish best practices for leasing decisions throughout the organization. Analyzing the business impact of new contract by leveraging multiple scenario simulations and using analytics to visualize various scenarios helps to make every leasing decision better while supporting strategic decision-making and optimizing global assets.

With the integrated solution, lease set-up is streamlined and more comprehensive. Approvals processes are inevitably faster due to the features enabling users to quickly connect with key stakeholders. New leases and lease renewals are communicated between approval authorities to ensure all legal, financial and business implications are assessed, validated and addressed.

Lease onboarding is improved be establishing clear and consistent checkpoints for initiation, installation and acceptance of newly leased assets. Warranty start dates, quality inspection, sign-off on operability and even operator training records can all be incorporated into the leased asset database if appropriate, thereby establishing a comprehensive picture for every new leased asset that it put into service.

During the operational term of each lease, the software provides continuous insights into payment and accruals, as well as key tracking dates such as renewals and expiration. Alerts can be set to provide look-ahead notifications and/or missed deadlines. Scheduled maintenance and service records can be incorporated into the master database to assure compliance with service and warranty provisions, while keeping all leased assets in proper operating condition.

From a macro perspective, lease administration software enables you to visualize global lease exposure at a glance on an intuitive dashboard that breaks down the composition of your assets, including contract portfolio key dates, the value of leased assets and responsible organizational units. You can also save on time and costs by centralizing all your lease data in one single repository.

As the end of the contract term approaches, the system can automatically flag the need for review and decisions on key factors regarding termination, renewal, equipment returns, residual value, etc. This enables companies to proactively determine the appropriate lease-end actions to avoid the risk of having leases move into a shadowland state where non-action has led to invisibility. This eliminates the all too common situation today in which many companies have evergreen leases that are costing them significant expense and for which they may not even be receiving value any longer.

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This end-to-end lease lifecycle administration approach provides complete visibility into every step in the process and automatically prompts appropriate actions, while seamlessly surfacing visibility at both the individual lease level and across the whole leased asset portfolio.

With SAP Lease Administration by Nakisa, you can easily track, from start to finish, any changes made to the lease data as well as who made the changes. As a result, you maintain an audit trail of changes and decisions made throughout the data collection process and ensure traceability for compliance and reporting.

The end-to-end SAP Lease Administration solution enables the efficient interaction of multiple users with different professional profiles throughout the collection process to ensure data accuracy and integrity. A variety of users can collaborate by sending messages, receiving alerts, validating data accuracy and collecting changes during the life cycle of the lease as they occur. Consequently, it is easier to obtain validation and achieve data accuracy since information can be easily reviewed and shared amongst legal advisers, accountants, government bodies, consultants and other relevant stakeholders.

Not only does this approach improve the efficiency and accuracy of the end-to-end processes for lease management. It also lays the foundation and auditability for compliance with ASC 842 and IFRS 16 and, perhaps most importantly provides clarity of the big-picture through comprehensive analytics and reporting mechanisms.

End-to-end Lease Management

• Designed to provide visibility into lease exposure for assets and equipment

• Unification of data in a single repository

Lease Accounting & Compliance

• Full lease accounting capabilities from classification, accruals, and payments to disclosure and reporting

• Built for compliance with current and new leasing standards (IFRS 16 & ASC 842)

Analytics & Machine Learning

• Disclosure reporting for capital and operating leases

• A complete view of global lease portfolio from multiple perspectives

Putting It All Together


Implementation & Next StepsSAP Lease Administration by Nakisa is the result of many years of co-development between SAP and Nakisa, as well as collaboration and consultation with key expert accounting partners, and rigorous testing through the SAP Premium Qualification program. An end-to-end enterprise solution, SAP Lease Administration by Nakisa is a certified SAP Solution Extension and as such has been tested and validated to comply with SAP requirements for security, performance, supportability, accessibility and documentation.

A key enabler for optimizing implementation is the unique SAP Lease Administration architecture that provides real-time, bi-directional integration with SAP (or other ERP environments). This tight integration helps streamline compliance, accounting and reporting while reducing risk of input errors or out-of-date information. It also leverages your investment in SAP ERP by meshing seamlessly with financial and material management functions.

General Ledger

Material Management

Read, create, approve and release POs and link lease contracts to PO materials.

Have a complete record of your financial transactions and report both internally and externally.

Asset Accounting

Accounts Payable

Track, capitalize and manage your asset accounting quickly and easily.

Execute payments and dynamically create internal AP reports.

Equipment Management

Track serial numbers, usage, maintenance etc. and link assets to equipment more accurately.

SAP ERP Financials & Logistics


As a co-innovator with both SAP and Nakisa, Bramasol brings over 20 years of business process improvement experience, project implementation and financial solutions expertise to the table to provide rapid assessment, onboarding and optimization of SAP Lease Administration for companies across a wide range of industry segments.

Building on our proven track record of financial transformation initiatives in SAP ERP, RevRec, and Leasing, Bramasol has defined a streamlined process for Initial Assessment and Project Preparation, Realization and Proof of Concept, Final Preparation and Go-Live & Sustainability. As shown below, this structured process can significantly compress the implementation schedule to achieve Go-Live status within 25-42 weeks from kickoff of the project.

Key activities & deliverables:

• Identify key stakeholder

• Conduct group interviews

• identify and define system landscape

• User requirements

• Kick-off deck (deliverables)

• High level implementation plan (deliverables)

• System roadmap (deliverables)

• Project test plan (deliverables)

• Define data migration strategy (deliverables)

• Define training strategy (deliverables)


• Identify business discovery and technical design walk through

• Design technical configuration (deliverables)

• RICEF design and delivery (deliverables)

• Identify gaps in the process and system (deliverables)

• Unit test, regression test scenarios and scripts (deliverables)

• Design data migration (deliverables)


• Defines cutover activities, manual and automated

• Identify key stakeholder communication

• UAT - user acceptance tests

• Secure gate approval

• Iterative business discovery and technical design walk through


• Release transport

• Support business and IT resources

• Identify performance and process improvement areas

• Provide KT to support team

• Provide assistance during first FY closing and transition process during go-live

By leveraging the architectural integration and data migration tools built into SAP Lease Administration along with the disciplined implementation approach by Bramasol, this means that your company can be up and running with a comprehensive end-to-end lease management solution within 6-8 months.

Undertaking such a program now will not only improve your company-wide lease management capabilities and start saving you money in the near term. It will also establish a solid foundation of process discipline, lease accounting and auditable lease assets to prepare you for compliance with the changes to lease accounting standards coming in 2019.


About Bramasol, Inc.Bramasol is the leader in SAP Leasing, Revenue Recognition and Office of the CFO Solutions

Bramasol is the Leasing leader and a recognized SAP Leasing services partner for companies seeking to comply with and benefit from the new Leasing standards. Our SAP-certified experts, partnering with SAP and Nakisa, have lead the way in education and enablement of the new Leasing standards. Even before the announcement of the new IFRS 16 and ASC 842 standards, Bramasol was working to educate companies on the coming changes and how to leverage the existing Revenue Recognition work to help with compliance. Our industry leading experience and focus on Office of the CFO solutions, enables our customers to ramp up quickly and evaluate the options to not only comply with the standards, but transform finance during the process.

Bramasol is also the Revenue Recognition leader and a recognized SAP Revenue Recognition services partner for companies seeking to comply with and benefit from the new Rev Rec standards. Our SAP-certified experts, partnering with SAP, assisted in the majority of SAP Revenue Accounting and Reporting Ramp-Up projects. Driving successful workshops, Proofs of Concept, and implementation projects throughout the U.S., Bramasol is the go-to partner with the experience and expertise for companies wanting to leverage SAP Revenue Accounting and Reporting to comply with ASC-606 and IFRS 15.

Currently, Bramasol is performing implementations and Proofs of Concept/Pilots for additional clients; proving that Bramasol is a go-to partner with experience and expertise for companies wanting to utilize SAP Revenue Accounting and Reporting to be compliant with the Financial Accounting Standards Board (FASB) current US Generally Accepted Accounting Principles (GAAP) revenue recognition standard or the newly announced ASC-606 and International Financial Reporting Standards (IFRS) 15 addressing the “Revenue From Contracts with Customers”.

Whether you are looking for a SaaS, hosted or on-premise solution, Bramasol has worked with over 150 clients to solve business challenges using SAP solutions including SAP Business Suite, SAP Business All-in-One, SAP Business Intelligence solutions, SAP Business ByDesign®, the SAP HANA® platform and mobile solutions. If you are looking to build a platform for growth or just be “Rev Rec Ready”, contact us and we can help.

Contact Information:United States – Headquarters Bramasol, Inc.3979 Freedom Circle, Suite 620Santa Clara, CA 95054Toll Free (866) 625-9878Phone +1 (408) 831-0046Fax (408) [email protected]


About NAKISA®

Nakisa Inc., a recognized leader of data management and visualization solutions for SAP®, helps customers better manage, track and validate their lease-related data to reduce spending, improve efficiency and ensure compliance to upcoming regulatory changes.

SAP Lease Administration by Nakisa provides visibility into a corporate portfolio of leased assets allowing SAP customers to optimize the management of their global assets while supporting accounting processes for more efficient cost controlling and regulatory compliance. It also enables customers to prepare for the upcoming changes to lease accounting standards as defined by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).

Nakisa continually collaborates with SAP to co-develop integrated solutions that extend the value of SAP customers’ existing investments. An SAP partner since 2007, Nakisa has over 3.4 million users in 700 enterprises across 24 industries worldwide. SAP® sells, tests, and supports SAP Lease Administration by Nakisa.

Contact Information:NAKISA® Inc.733 CathcartMontreal, QuebecCanada, H3B 1M6Phone: +1 (514) 228-2000info@NAKISA®.com

Documents

End-to-End Management of The Lease Lifecycle - … · As long-term innovation partners with SAP, Bramasol and Nakisa have brought together a ... business planning, etc. Some companies