GBQ Partners, a full-service accounting firm with over 300 professionals across multiple Ohio offices, has established itself as a trusted advisor to clients in construction and various other industries. With the implementation of the new lease accounting standards under ASC 842, GBQ faced significant challenges in helping their construction clients navigate these complex changes. However, by leveraging LeaseCrunch, GBQ successfully streamlined the adoption process, saving both time and money for their clients.
Tackling the Lease Accounting Challenge:
The construction industry presents unique lease accounting challenges. Many contractors, particularly those with large fleets of vehicles, were unprepared for the intricacies of the ASC 842 lease accounting standard. In the past, leases were often an afterthought, especially operating leases, which were only a footnote in financial statements. This lack of focus led to inefficiencies and increased the risk of non-compliance.
GBQ’s construction clients vary widely in size and complexity, with revenues ranging from $5 million to over $1 billion. The number of leases they manage also varies significantly, sometimes with smaller contractors holding more leases than larger ones. This variation added to the complexity of implementing the new standard, making a scalable and efficient solution imperative.
Simplifying the Implementation Process
GBQ turned to LeaseCrunch to simplify and streamline the adoption of ASC 842 for their construction clients. The seamless implementation and support offered by LeaseCrunch were critical in enabling GBQ to onboard clients efficiently, regardless of the number or complexity of their leases.
Chris Mast, a partner at GBQ who specializes in the construction industry, emphasized the importance of making the transition easy for clients. He noted, “LeaseCrunch is like TurboTax for leases. It’s very easy and intuitive for someone, even if you know nothing about accounting. The wizards guide you through the process, and the resources available are invaluable.”
The Results:
1. Cost Savings: Before implementing LeaseCrunch, managing lease accounting for construction clients was a labor-intensive process that often resulted in significant billable hours. Mast, highlighted this challenge by comparing his billable rate to the cost per lease using LeaseCrunch, emphasizing the substantial savings for clients.
To quantify these savings, GBQ conducted an internal analysis, calculating the billable hours and time spent on lease accounting tasks. They compared the estimated hours required for managing their portfolio of approximately 3,600 leases using traditional spreadsheet methods against the time spent using LeaseCrunch. The results were striking: maintaining lease schedules in spreadsheets would have required a significant number of hours annually. Factoring in Chris’ billable hours, this would equate to a substantial annual cost for clients.
With LeaseCrunch, GBQ found that the time required for both implementation and ongoing maintenance decreased significantly. The savings were substantial: for the initial implementation alone, clients saved over $305,000. Additionally, the annual ongoing maintenance savings amounted to almost $200,000.
Mast emphasized the value of this efficiency: “The amount of time it would take for them to then turn to me to do the research and get back to them, probably would have been their LeaseCrunch expense for the next three years.” This substantial cost savings allowed GBQ’s construction clients to allocate resources more effectively, focusing on their core business activities rather than complex accounting tasks.
2. Time Savings & Increased Efficiency: Use of LeaseCrunch’s platform resulted in significant time savings and increased efficiency for GBQ and its clients. This was particularly evident for GBQ’s electrical contractor clients, who manage large fleets of vehicles. While these clients were initially concerned about the perceived cost of implementing a new system, GBQ was able to demonstrate the solution’s tangible value through real-world application.
Chris Mast emphasized the importance of this approach: “I advocated for LeaseCrunch because the last thing I wanted was my clients trying to create some Excel schedule that I ended up spending three times as much time just auditing that Excel schedule as it would have taken for them or me to just enter it in LeaseCrunch and get the footnotes and know that it was correct and know if there’s modifications that it’s going to be easy to update.”
By leveraging the platform, GBQ significantly reduced the hours spent on lease accounting compared to maintaining cumbersome spreadsheets. It’s ability to handle modifications efficiently was particularly valuable, as Mast noted: “If there’s modifications, my client’s not going to do the technical research to figure out what the new accounting for that should be.” LeaseCrunch’s built-in functionality for handling such changes saved both GBQ and its clients considerable time and effort.
This practical demonstration of clear value helped shift client perceptions, showing that the platform was not just an additional expense, but a cost-effective solution that streamlined their lease accounting processes and reduced the potential for errors. The time savings and increased accuracy provided ultimately allowed GBQ’s clients to focus more on their core business activities, rather than getting bogged down in complex accounting tasks.
3. Enhanced Client Service: GBQ’s ability to provide top-notch client service was bolstered by LeaseCrunch’s support and resources. The availability of how-to videos, guides, and a comprehensive knowledge base meant that even the most complex lease accounting tasks could be handled with confidence.
Mast emphasized the value of these resources: “Anytime that I’ve had questions and I’ve reached out, it was always quick, they got right back to me. And being in the client service industry, I know how important that is and you kind of expect it, but companies don’t always get it right. Having a group that I could and still can count on was life saving for me.”
In addition to the on-demand resources offered, the real-time access to a support team of knowledgeable accountants ensured that GBQ’s clients barely noticed the transition to the new lease standard.
Conclusion:
By adopting LeaseCrunch, GBQ Partners significantly enhanced their ability to serve their clients, ensuring compliance with ASC 842 while delivering substantial time and cost savings. The case of GBQ illustrates how LeaseCrunch can transform the lease accounting process, particularly in industries like construction, where lease portfolios can be both extensive and complex. The platform’s user-friendly design, coupled with its powerful features, has made it an indispensable tool for GBQ and its clients.
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