Managed Service Provider (MSP) solutions provide the flexibility to outsource your lease accounting function to a trusted partner, much like outsourcing payroll services.
This approach simplifies complexities and reduces the manual effort involved in managing lease data, performing calculations, and ensuring compliance with FRS 102 lease accounting standards.
MSP partners will work with you to capture all you lease information for compliance under the standard and manage the implementation, provide you with the journals for local booking, provide visibility and management of your lease portfolio.
For larger organisations, MSP solutions align with strategies to outsource non-core functions, helping mitigate risks associated with scaling up without increasing the workforce.
For smaller organisations without in-house technical accounting resources or specialised expertise, our MSP solution provides a practical option for managing this transition and the ongoing lease accounting function.
Get ahead of the curve by reaching out to your current MSP partner or find one that meets your needs.
Transitioning is time-consuming, and the MSP must allocate enough time to ensure a smooth process to meet your 2026 deadline.
Don't forget to explore our lease accounting solutions Knowledge Hub for additional insights.
Get in touch to connect with our Trusted partners for reliable, effective solutions that simplify compliance and make it more manageable.
Key Strategies for a Successful MSP Outcome
Awareness and Leadership
Is your organisation aware of the forthcoming changes to lease accounting, and the timelines specific to your organisation.
Is managing this internally the best approach, or does the scale and complexity of the task warrant outsourcing to a specialist MSP for expert support?
Organisational Strategy and Goals
Does the outsourcing of non-core functions solution align with your company's strategy, and where you have insufficient in-house expertise.
Attitude to Risk
What is your company's approach to risk management, how does it influence your strategic decisions and operations, and is outsourcing to an MSP aligned with it.
Privacy
Consider your privacy requirements. For example, recording personal details of the user of a leased car may have privacy implications.
In addition, sharing personal data with third parties can also lead to privacy implications.
Data Security
Sharing sensitive lease data with an external provider requires robust data security measures. It's essential to ensure that the MSP has strong security protocols in place to protect your data.
Plan, Implement and Delegate
Senior finance professionals should take an active and pivotal role in shaping the scope of the MSP solution.
Once implementation is complete, they should delegate the routine tasks to junior staff, concentrating on oversight and control, while dedicating more time to critical business issues.
Identifying the Right MSP Partner for Your Business
Plan carefully for an MSP partner that will meet your needs in the medium to long term, as making changes later can be challenging.
Confirm the structure of the journals you will receive for your local bookings and whether you prefer a direct interface to your accounting ledger.
Agree on the structure of the reports required for your management reporting and annual accounts disclosures.
Assess the lease accounting solution your MSP partner will use, considering whether you need access for exception reporting and if their solution will adequately support it.
MSP Collaboration Framework
Carefully consider how you want your MSP engagement model structured and the working relationship defined.
You cannot completely transfer responsibility to your MSP partner; you will still need to remain proactively involved, though the MSP partner will handle the majority of the workload.
Set up your process for delivering the initial lease information to your partner, and define the checks and balances to verify the completeness of the data.
Coordinate and schedule the timing for receiving lease information to ensure you can prepare your journals, and management reports and the level of customisation.
Work closely with your partner to develop a process that ensures they receive the latest information, and receive in a timely manner in order to process the changes in line with the agreed schedules.
Coordinate and schedule when you need to receive lease information to ensure timely preparation of statutory disclosures for your annual accounts.
Determine if you require access to their solution for exception reporting.
Communication
You must not underestimate the importance for effective communication between your business and your MSP partner.
Communication is crucial for a successful outcome and ongoing relationship, as well as for ensuring that lease accounting tasks are handled accurately and promptly.
Management Reporting
We strongly advise that the changes in lease accounting be fully integrated into your management reporting.
Accounting guidance recommends that your management reporting aligns with your statutory financial statements, lease rentals should no longer recorded as rental expenses in the profit and loss statement.
We recommend maintaining the consistency in your current reporting lines. For example, your reporting lines for right-of-use depreciation charges related to office rent, vehicles, IT equipment, and other assets.
Ensure your approach aligns lease accounting transactions with your reporting structure and chart of accounts.
You should focus on aggregating your core asset classes to a level that provides adequate visibility for management and meets classification requirements under the standard, without becoming overly complex and difficult to manage.
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It helps you simplify your 2025 lease position, reduce compliance risks, and stay fully aligned with FRS 102 Section 20 —without relying on costly external support.
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