This is how HiFi Klubben optimizes IFRS 16 lease accounting

With over 90 stores spread across five countries, HiFi Klubben faces the complex challenge of managing numerous commercial leases, all of which need to comply with IFRS 16 lease accounting standards. 

Sona Harutunian - ESG & IFRS 16 specialist at HiFi Klubben

The Nordic audio equipment retailer is known for its passion for high-quality sound. Their physical outlets are spread across the region, staffed with dedicated audiophiles ready to give customers the magic listening experience. 

This is the story about how HiFi Klubben “tuned in” to House of Control’s lease accounting software to simplify their IFRS 16 reporting. Sona Harutunian, who leads both the ESG and IFRS 16 reporting efforts at HiFi Klubben, has found the software essential in managing the company's growing lease obligations. 

"When I started, one of my first tasks was to bring all the rental contracts into compliance with IFRS 16 for the annual report," Harutunian explains. "We have more than 100 leasing contracts, and with stores located in five countries, it was crucial to streamline our lease accounting and reporting processes."

The challenge: Managing lease complexity across five countries

As a growing business, HiFi Klubben needed a robust solution to manage the intricate details of their commercial leases, which varied by location, terms, price indexes, and national regulations. Before implementing House of Control’s system, lease calculations and updates were managed manually in Excel, which led to inefficiencies and a heavy workload for HiFi Klubben’s finance department. 

When Harutunian joined HiFi Klubben, the team had already moved to House of Control’s solution. However, she is familiar with the challenges her team had faced: 

“The Excel files were built for smaller-scale lease contracts. But with our many leases across different countries, it became a massive file to manage,” Harutunian explains. “We also have contracts that are based on national indexation, and our Excel template could only handle fixed indexation. This resulted in mistakes in the figures, making it challenging to ensure accuracy."

The sheer volume of contracts and the complexity of managing varying terms across different countries made manual updates time-consuming. Harutunian realized that a more scalable and efficient solution was necessary to maintain accuracy and meet the stringent requirements of IFRS 16 reporting.

Implementing House of Control: A seamless transition to better control

Fortunately, when Harutunian joined HiFi Klubben, the company had already signed with House of Control. The decision was based on a recommendation from another company in the same group, where they were already using House of Control’s lease accounting software. Although nothing had been set up yet, she quickly saw the potential for simplifying their lease management. 

“I had to start from scratch in terms of uploading and configuring our contracts. But once we began, the benefits were clear. House of Control's team, including customer success experts Simon and Karl Oscar, worked closely with us to ensure a smooth setup," she says.

"They were really helpful. Whenever I had questions, they were quick to respond, set up meetings, and made sure I fully understood the system before moving on. It was a very positive experience."

The team also helped configure the system to handle the nuances of HiFi Klubben’s lease agreements, she explains: "For IFRS 16, the contract periods didn’t always match the operational contract terms, and House of Control helped us figure out how to manage that. It was a large task, but the system made it much easier."

The results: Greater accuracy, efficiency, and time savings

Since adopting the software, Sona says HiFi Klubben has seen marked improvements in its lease management and reporting processes: “What used to be a complicated task with Excel has now become a much smaller task in the system. Making changes to a contract and updating the calculations is so much easier than it was before."

The software has significantly improved the accuracy of IFRS 16 reporting by providing better control over the contracts. "Before, it was hard to spot errors in Excel. Now, with House of Control, we can look at one contract at a time, making it much easier to identify any mistakes," she adds.

Another significant benefit for her, is the time saved: “I don’t have exact numbers, but I can say with certainty that we save valuable time now. The software streamlines our work, and it’s much more motivating to handle everything in the system than working with cumbersome Excel files."

Streamlined reporting and improved financial oversight

By automating the IFRS 16 calculations and providing real-time insights into lease data, HiFi Klubben now has better financial oversight and the ability to ensure compliance with minimal effort. "There’s a clear audit trail in the IFRS 16 calculations, showing what’s been changed and when, which we never had in Excel,” Harutunian explains.

Reflecting on the transition, Harutunian shares, "I feel much more confident in the completeness and accuracy of our lease data. The system has given us the ability to do better controlling and planning, which has made a big difference in how we approach our reporting."

By integrating House of Control's lease accounting software into their finance operations, HiFi Klubben has optimized their IFRS 16 reporting, reduced manual workloads, and gained critical insights into their leasing contracts—setting the stage for continued growth and success. 

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