Automate Asset Leasing through Microsoft D365 F&O
Leasing refers to a contractual arrangement where one party (the lessee) pays the other party (the lessor) for the use of an asset, such as property, vehicles, or equipment, for a specified period. Lease accounting is the process by which companies record the financial impacts of their leasing activities. It has become increasingly important due to new accounting standards that require most leases to be recognized on the balance sheet, enhancing transparency and providing a clearer picture of a company’s financial obligations.
Microsoft Dynamics 365 Finance can help companies (CFOs, Finance & accounts team) to set up, operate and manage multiple lease accounting.
The work around goes as listed below :
- Enable Asset leasing in Feature Management. The module is enabled as below:
2. i. Create Lease Books: Asset Leasing =>Setup=> Lease Books
ii. Define Interest as Expense Type
iii. Define Lease rate of interest as Index rate type.
iv. Define General Ledger mapping, number sequences and journal types in Asset leasing parameters.
3. Create New Lease in Lease Summary by giving unique Lease ID and update details in Open Books : Lease start date, Vendor Details, Lease Term
4. Run each schedule to ensure that journal entries are made for the chosen period and schedules are generated for the lease period.
5. For any modification in lease terms, termination or revaluation use the Maintain function.
6. Using the Inquiries and Reports – all lease related reports can be used to review and monitor the financial impact of leases.
This way the entire lease accounting can be automated whether asset leasing is part or core business of the company. It takes care of the increasing number of leases with comfort and avoids risk of errors and miscalculations.
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