Lawson Lease Management

Join RPI while we present this Lawson Lease Management webinar. Learn how this integrated Lawson module can assist with the management of your organization’s Leases. This webinar will cover functionality, including lease maintenance, payment schedule setup, straight line payment calculation & accounting, and regulation compliance for capital leases. See the payment cycle process from LM payment schedule through invoice creation and interface to AP. Compare the option of LM to maintaining recurring AP invoices, as well as externally managed options.

Transcript

Keith: I want to thank you once again for taking the time to attend this morning’s presentation on Lawson Lease Management. We have a great presenter here for you today, Mr. Chris Gordon. First, a couple of house keeping items. One is, we will be recording this session. We get asked that often. It takes a little while to edit it, get it ready, get uploaded to YouTube. Give us a week, week and a half. We will send you an email, my good friend Logan here, when it is ready. So you’ll know you’ll be able to share that, you’ll be able to rewatch it. Hopefully it’s worth rewatching. The second is, these presentations, we’re talking straight into a camera. Questions are super helpful, so if you have some please type them into the go-to webinar module and Bill Getty will ask throughout the presentation. Helps break up the dynamic a little.

Now, without further adiue, I give you one of our most talented financial consultants, a colleague and great friend, Mr. Chris Gordon.

Chris Gordon: Thank you Keith, and thank you guys for joining this morning. Like he said, my name is Chris Gordon and we’re going to spend the next hour or so going over the Lawson Lease Management module. We’ll look at some key functionality, I’ll go through an actual product demo. So, we’ll show you how the the Lease Management module works and how it interfaces with some of the other Lawson modules. The Lease Management module is something out there that a lot of you guys may or may not have set up. A lot of times, Lease Management kind of gets kicked to the back burner. You own it but you don’t have it implemented and you might be asking yourself, “What are some of the values that we can get from this system today?” That’s what we’re trying to answer. We’re going to hopefully, over the next hour or so, show you why this is a valuable tool to implement.

Like I said, we’re going to start with the functionality overview of the Lease Management module. What are some of the processes it replaces? If you’re doing a lot of calculations or journal entries outside of Lawson and interfacing into Lawson, what does this Lease Management module replace for you? Who’s the product for? Who should be considering this product? There are certain economies of scale that if are met, this module is a valuable tool for you and we’re going to go through that in the next few slides.

Like I said, we’re going to do a product walkthrough, so we’ll show you how the leases are set up, how their interfaced as an Accounts Payable system, and eventually paid through AP. We’ll touch on some reporting and analysis because after all, this is a module within your Lawson ERP and what good is it if you can’t report out of it?

Some new lease requirements. We’ll go over … Starting in 2019 there’s some new standards for lease accounting that I do want to touch on towards the end of this presentation.

Like we mentioned before, Q and A. This is reserved for the end, but if you have questions throughout the entire presentation, type those into the GoToMeeting and we’ll stop and address those.

First and foremost, a little bit about RPI. This is actually a picture taken from Inforum back in July at our booth. RPI was founded back in 1999. We’re located right here in Baltimore, Maryland with other satellite offices in Florida, Arizona, and Kansas City. We have about 70 consultants nation-wide, certified across all the different Lawson products.

A little bit of a functionality overview. If you’re new to Lease Management and curious what it does, let’s just give you an idea of why it might be valuable to implement Lease Management and show you what it can do. First and foremost, it’s an integrated solution, right? Just like AP is integrated to your General Ledger. The Project Accounting module is integrated to your General Ledger. The Lease Management module follows those same rules. It’s a sub ledger to your General Ledger and allows you to automate the process to account for, analyse and report on and pay both operating and capital leases. Like I said, it’s integrated with Asset Management. If you have capital leases, you have those set up in your Lease Management module as well as in your Asset Management module. There is that connectedness between Lease Managment, LM and Asset Management, AM.

A really good benefit from the Lease Management module is this integration with Accounts Payable. We’re going to go through a whole product demo in a little bit, but just know that the LM and AP integration is very strong and very powerful and that’s what makes the Lease Management module a really nice system to use. Of course, it’s within your Lawson ERP, so it’s integrated with your General Ledger. There’s also ways to capture activity, account category costs on your invoice lines and interface those into the Project Accounting module, too.

All right, so some key functionality. Starting from the ground up, you define and maintain your leases in this Lease Management module. That’s the whole point of it. You set up your leases, you define your payment schedules – that’s the second part here – you manage your rents, your lease payments, any other related recurring costs associated with that lease, right? In addition to that monthly recurring payment or semi monthly, or quarterly, or however often you have to pay those lease payments, there’s the ability within the module to tag these recurring costs onto that payment schedule. You’re paying the monthly recurring payment, but you’re also paying maybe a CAM or an insurance payment in addition to that monthly cost.

The Lease Management module also creates those invoices and interfaces those into AP, like we said. There’s a semi … It’s not a routing process for approval, but you do need to have an authority code on your lease invoices and those invoices can’t be interfaced into AP unless someone approves them. There is that control there between the Lease Management system and AP.

As we go through our demo, these terms I’m throwing out are going to make more sense. The due dates on your payment schedule are used to create the invoices. There’s a program that runs that looks at your payment schedule to see what’s scheduled and what should we pick up to actually pay. All that is, again, maintained within your lease and under the payment schedule. Obviously the Lease Management module creates your journal entries that are interfaced with the General Ledger to account for operating leases as well as capital leases.

What’s nice is that the module itself … You define your payment schedule for the lease and it allows you to adjust those payment amounts over the course or the term of that lease. The demo that we have is going to just show a $500 monthly payment, but just keep in mind you can set up those payment schedules exactly how your lease is scheduled. If there’s a 3% compounding escalation or escalator year over year, you can add those into your payment schedule. You can make those payments varying on your lease, but you can … At the same time, if you need to expense that lease straight line over the life or term of the lease, you have that ability too. In a couple more slides we’re going to go over how you actually split out or make that lease a straight line basis or a straight line expense lease.

Date codes. These are nice. These are kind of tag on to your leases that allow you to mark specific milestone events or specific dates that you need to be aware of for that lease. They’re user defined. A good example is a renewal for a lease. Three years into a lease and the … In the contract it’s baked in to say, “A month or two the lease expires, let us know if you want to renew that lease.” You can tag your leases with these codes and eventually report off of those codes to give you an idea of when you have to make contact with the vendor to, in this case, renew a lease.

Here’s an example of where we’re putting these codes on. This is LM21, this is our lease. On our dates tab we have the ability to put as many date codes as we want. In this case I have an EXP date code, which is just saying, “This is our release renewal code,” and I’m saying that this lease needs to be renewed or we need to let the lessor know when we want to renew this lease by June 30th of 2020. The lease actually expires, I think, July 30th of 2020. One month before the expiration we need to let the vendor know if we want to renew.

There’s a report, right? You put those codes on there. That’s great, but it’s not really beneficial unless you can report on that. The LM207 is that date code listing. The name of the report sounds like it’s just a listing, but you can actually include leases. If you click that off to yes, it’s going to report on that date code, but it’s also going to bring in any leases that have that date code and give you those dates that are associated with that specific date code. Just some helpful things in there for you to maintain those leases and kind of be kept informed on when specific dates are coming up so you can act accordingly.

Here’s just a screenshot of what the report looks like. We ran it and then we see we have four leases out there that have this lease renew code on there. I can see that the dates of when those need to be renewed right on the report. Maybe this is a report that you run every month during your close just to see what’s coming up and make contact with the vendor when necessary.

What does the Lease Management module replace? Maybe some of you on the meeting here are doing your Lease Management outside of Lawson on a spreadsheet. You might be thinking, “All right, Lease Management sounds nice but what am I really getting from it? What is it replacing that I’m doing currently and how can it add value to my day to day?” Here’s some key features that the Lease Management does automatically.

It’s going to perform that FAS13 classification test to say whether or not this is an operating lease or a capital lease. We’re actually in the next slide going to get into the details of that FAS13 test. If you have