Companies that prepare their accounts in accordance with IFRS must currently implement far-reaching changes in their finance and accounting systems: The new IFRS 16 standard changes the requirements for the valuation of leases. A large proportion of leases, which were previously off-balance sheet, must now be included in the balance sheet as an asset on the one hand and as a lease liability on the other. The Francotyp-Postalia (FP) group of companies has relied on software support for the changeover from the outset. The use of otris contract supports the implementation of the new regulations.
Francotyp-Postalia Holding AG is an internationally active group based in Germany. The company sells products and services outside Germany through subsidiaries in the USA, Canada, Great Britain, France, the Netherlands, Belgium, Italy, Sweden and Austria. The application of the IFRS 16 standard was to be implemented for all subsidiaries according to a uniform system – controlled from the headquarters in Germany.
Search for suitable software
To implement the new leasing standard IFRS 16, the company was looking for a software solution consisting of a leasing tool and an upstream contract management system. The entire portfolio of leasing contracts was to be uniformly structured in a central contract database.
Another requirement: access to this database regardless of location, so that the individual subsidiaries can use the system to store and manage the leasing contracts in their area of responsibility there.
There were several reasons why FP chose otris software as its contract management software. Among other things, the uncomplicated integration of the international subsidiaries was convincing: By means of settings in the rights and roles concept, otris Consulting implemented the specification that certain responsible employees in the subsidiaries can only use the system to submit and manage their leasing contracts. The central finance department in Berlin, on the other hand, has access to all filed leasing contracts in order to evaluate them and prepare them for accounting.
Valuation of leases
In order to check the leasing contracts for their balance sheet effectiveness, the software provides different tools: Each lease is in a digital file. The processor marks the digital files with metadata that categorises the leasing contract (e.g. term or leasing rate). In addition, it is documented which leasing contracts have already been transferred to the leasing tool for further accounting processing and which contracts have been changed after export to the leasing tool. Old status and changes can be traced within certain limits over the entire contract period. For the purpose of accounting processing in the leasing tool, one or more assets are created in each leasing contract. Payments are assigned to these assets, which are essential for determining the balance sheet values in the leasing tool.
Interface to third party system
The data generated in otris contract is exported to an accounting tool (leasing tool) which generates the booking records. The flexible adaptability of the otris contract interface proved to be extremely helpful in the project: A system change in the leasing tool required an adaptation of the data structure of the otris contract export file, which otris Consulting implemented at short notice and at a manageable cost.
FP currently uses otris contract almost exclusively to record, manage and evaluate rental and leasing contracts and for the operational implementation of IFRS 16 requirements. The project has once again made it clear that a central, web-based system also offers many advantages for all other contract management tasks. A further expansion of the system is therefore planned for the future and is currently in the conception phase.
The internationally active, listed FP Group, headquartered in Berlin, is an expert in secure mail business and secure digital communication processes. As the market leader in Germany and Austria, the FP Group offers products and services for efficient mail processing, consolidation of business mail and digital solutions for companies and public authorities with its “Franking and Inserting”, “Mail Services” and “Software” product areas. The Group generated revenue of over 210 million euros in 2019. Francotyp-Postalia is represented in ten countries by its own subsidiaries and in 40 other countries through its own dealer network. From its more than 97-year corporate history, FP has a unique DNA in the areas of actuators, sensors, cryptography and connectivity. In franking systems, FP has a global market share of twelve per cent, and in the digital area it has unique, highly secure solutions for the Internet of Things (IoT/IIoT) and for digital signatures of documents.