A group of former CPA firm auditors has teamed up to develop LeaseCrunch, lease accounting software that they’re selling through CPA firms to help clients deal with the new FASB standard.
LeaseCrunch includes electronic audit trails, automated quantitative footnote disclosures, leasing wizards for classification and leasing terms, policy election templates, custom reporting, journal entry exports and amortization schedules.
“Ours is the only lease accounting software that is made by former CPA auditors, and especially for CPA firm auditors, with a team that’s made up of CPAs, former Big Four public accounting firm auditors and accounting academics,” said LeaseCrunch co-founder and CEO Ane Ohm. “We have a former FASB staff member on the team. We comply with both IFRS and FASB regulations, and we handle all different lease types, including things like equipment, real estate and vehicles.”
The software can be branded with a firm’s logo. The accounting firm in turn will sell it to business clients. A number of firms have been testing it out.
“We are in the contracting phase with several CPA firms right now,” said Ohm. “We are selling exclusively to CPA firms. One of the advantages is they basically become a distribution channel for us, and that allows us to be very competitive, and offer it at lower price factors. That’s really important because the lease standard affects all companies that have to follow GAAP. Making it accessible to all companies who only have a handful of leases is a huge benefit, especially for smaller companies. You’re going to typically find that they are going to really lean on their CPA firm for a solution. That’s why this is so important to the CPA firms we are talking to.”
Some of the features in LeaseCrunch allow companies to identify policy elections for the leasing standard through templates for both U.S. GAAP and International Financial Reporting Standards. Guidance in the software walks clients through all the selections needed.
Software wizards help users choose the main variables required by auditors, including the five classification criteria and subjective decisions about early termination and renewal options. Automated footnote disclosures help with the complex footnote requirements of the new leasing standard.
LeaseCrunch will also generate journal entries through an export engine that provides customizable free exports to update enterprise resource planning software and other accounting systems. The software includes both out-of-the-box reporting for immediate reports, along with the ability to create customized reports to meet the specific needs of an accounting firm and its clients.
“During our pre-launch phase we interviewed a number of controllers and CFOs, and every one of them said they are going to be relying on their CPA firm for some level of guidance on the new leasing standard, whether that’s software or thought leadership,” said Joel Hess, a principal at LeaseCrunch. “That was another key aspect. They are going to rely on their CPA firm for implementation and research, and ultimately software selection for the new standard.”
LeaseCrunch is currently in contracting stage with four of the top 30 firms in the U.S., according to Ohm. “One of the things about partnering with CPA firms is the CPA firms in many instances are going to be helping clients with the implementation, so we are not competing with them,” she said. “We’re just offering this as a software solution.”