This article was written by Rubli for CPDStore.

Implementing lease accounting is a significant milestone. But for most finance teams, it's not the hardest part.

The real test comes a few weeks later when the first month-end arrives.

This is the point where theory meets reality. Journal entries need to balance. New leases arrive unexpectedly. Property teams announce contract extensions. Auditors begin asking questions. Senior management wants confidence that the numbers are right.

Whether you're reporting under IFRS 16 or the revised FRS 102 lease accounting requirements, your first month-end is where you discover whether your implementation has created a sustainable finance process or simply delivered a compliant opening balance.

Having worked with organisations ranging from businesses with a handful of leases to multinational groups managing thousands, one lesson consistently emerges: successful implementations don't guarantee successful month-end reporting.

Here are eight ways finance teams can prepare for a smoother first close.

1. Make Sure Your Lease Population Is Actually Complete

One of the biggest surprises during a first month-end isn't a calculation error. It's discovering leases that weren't included in the implementation.

This often happens because lease information lives across multiple departments. Procurement may hold equipment contracts, facilities teams manage property agreements, fleet managers oversee vehicle leases, and IT departments may have infrastructure agreements that contain lease components.

The revised FRS 102 requirements and IFRS 16 require organisations to identify leases comprehensively, including arrangements that contain an embedded lease within a wider service agreement.

During several implementations, organisations have uncovered dozens of additional leases only after finance began running live month-end processes. The calculations were accurate, but the data set wasn't complete.

Before your first close, ask each relevant department to confirm new leases, amendments, terminations and changes to payment terms by a set cut-off date. Assign a named owner in each department and ask for a nil return where there are no changes.

Set the cut-off early enough for Finance to review the contract, determine the accounting treatment, update the lease register, rerun the calculations and complete the necessary review before journals are posted. Items received after the cut-off should be logged and assessed according to their effective date, materiality and whether the reporting period remains open, rather than automatically being pushed into the next month.

2. Reconcile Opening Balances Before Closing the First Month

Your opening balances form the foundation for every subsequent reporting period.

If your opening lease liabilities or right-of-use assets are incorrect, the depreciation charge, interest calculation and disclosure that follows may also be affected.

Before running your first month-end, reconcile:

• Opening lease liabilities
• Right-of-use assets
• Deferred rent balances (where applicable)
• Existing accruals
• Transition adjustments
• General ledger balances against implementation outputs

This reconciliation should ideally be completed before your first reporting deadline, allowing sufficient time for questions from auditors or internal reviewers.

Finance teams that invest time validating opening balances usually experience significantly smoother reporting thereafter.

3. Test Your Month-End Journals Before You Need Them

Many teams only generate lease accounting journals on the day they need to post them, leaving little time to investigate mapping or posting issues.

Before your first live close, perform a trial month-end and review every journal entry that will feed into the general ledger.

Check that the outputs include:

• Interest expense
• Depreciation
• Lease liability movements
• Foreign exchange adjustments (where relevant)
• Current and non-current liability classifications
• Journal exports that align with your chart of accounts

Running a "dummy close" often identifies mapping issues, posting errors or unexpected rounding differences long before reporting deadlines become critical.

It's a simple exercise that can save hours during the actual close.

4. Expect Lease Changes During the Month

One of the most common misconceptions is that leases remain static after implementation.

They don't.

Even in the first reporting month, organisations regularly encounter:

• New leases
• Early terminations
• Property extensions
• CPI or inflation-linked rent increases
• Rent reviews
• Scope changes
• Changes in lease term assumptions

Depending on the accounting standard and the nature of the change, these events may require reassessments, modifications or remeasurements.

Do not assume that every announced change should be reflected immediately. For example, an index-linked or market-rent adjustment is generally reflected when the revised contractual cash flows take effect. The accounting treatment and discount rate will depend on whether the event is a reassessment within the existing terms of the lease or a modification of the contract.

In one implementation, a property lease extension agreed shortly after go-live required an immediate remeasurement before the first month-end. The accounting was entirely correct, but the finance team hadn't anticipated having to process a lease modification so soon.

Having clear procedures for identifying and approving lease changes is just as important as understanding the accounting rules themselves.

5. Make Sure Your Supporting Documentation Is Audit Ready

Auditors will want to understand not only whether the lease liability is correct, but how it was calculated, reviewed and approved.

That means finance teams should have supporting documentation readily available for every significant judgement, including:

• Lease agreements
• Contract amendments
• Discount-rate methodology
• Discount rate assumptions
• Approval workflows
• Change history

A clear audit trail reduces the time spent reconstructing how a balance was calculated, which assumptions were used and who approved a change.

If producing supporting evidence requires searching through email folders and shared drives, month-end quickly becomes far more time-consuming than it needs to be.

6. Validate Reports Before You Close

Generating a report is not the same as validating it.

Before posting journals or finalising disclosures, review key outputs such as:

• Amortisation schedules
• Lease liability roll-forwards
• Current versus non-current liability reports
• Lease payment and maturity reports, where relevant
• Disclosure reports
• General ledger journal exports

Ideally, someone independent of the preparer should perform a high-level review.

Fresh eyes frequently identify inconsistencies that automated calculations alone cannot detect, such as missing contracts, duplicate leases or unusual movements.

The objective isn't simply to produce reports. It's to trust them.

7. Remember That Month-End Is a Process, Not Just an Accounting Exercise

Technology can automate the calculations, but it cannot compensate for unclear ownership or weak operational processes.

One of the biggest differences between finance teams that experience smooth month-end closes and those that struggle is the clarity of their internal responsibilities.

Ask yourself:

• Who tells finance about new leases?
• Who approves lease modifications?
• Who uploads new contracts?
• Who validates lease data?
• What is the timetable for completing lease accounting before financial close?

These questions often fall outside the accounting standards, yet they determine whether month-end becomes routine or chaotic.

Many implementation projects focus heavily on system configuration but underestimate the importance of governance, ownership and communication across departments.

8. Accept That the First Close Will Take Longer

Even the best-prepared organisations should expect the first month-end to require additional time.

That does not mean the implementation has failed; it gives the team an opportunity to refine the process, identify gaps and establish a repeatable reporting cycle.

Allow extra time for:

• Internal reviews
• Auditor questions
• Data validation
• Journal reconciliation
• Process improvements

Capture lessons learned immediately after the first close. Most organisations find that their second and third month-end cycles become dramatically more efficient once these improvements have been embedded.

The Goal Isn't Compliance. It's Confidence.

Implementing IFRS 16 or preparing for the revised FRS 102 lease accounting requirements is only the beginning. The real measure of success is whether lease accounting becomes a reliable, repeatable part of your monthly financial close.

Finance teams that focus on complete lease populations, strong governance, audit-ready documentation and well-defined operational processes are far more likely to achieve that outcome.

Frequently asked questions

What should be included in a lease accounting month-end checklist?

A practical checklist should cover the lease population cut-off, confirmation of new and changed contracts, opening-balance and general-ledger reconciliations, trial journals, approved modifications and remeasurements, report reviews, supporting documentation and final sign-off. It should also name the person responsible for each task and the date by which it must be completed. The checklist should form part of the normal close timetable rather than only being revisited at year-end.

How do you reconcile a lease liability at month-end?

Start with the opening lease liability, add the interest for the period and deduct lease payments made. Then include movements relating to new leases, terminations, reassessments and modifications. Reconcile the resulting closing balance to the lease accounting report and the general ledger, and investigate differences caused by timing, foreign exchange, account mapping or incomplete data. The current and non-current portions should also be checked before the journals are approved.

When should a lease liability be remeasured under IFRS 16 or FRS 102?

Remeasurement may be required when the lease term or a purchase-option assessment changes, expected payments under a residual value guarantee change, or an index or rate alters the contractual lease payments. A lease modification may also require the liability to be remeasured. The discount rate used depends on the cause of the change. For index- or rate-linked changes, the liability is generally updated when the revised contractual cash flows take effect.

What reports should finance teams review before posting lease accounting journals?

Finance teams should review the amortisation schedules, lease liability roll-forward, right-of-use asset and depreciation movements, current and non-current liability split, payment and maturity reports where relevant, modification and remeasurement reports, journal exports and disclosure outputs. The results should be compared with the general ledger and the previous period, with unusual movements, duplicate leases, missing contracts and unexpected balances investigated before the journals are posted.

Purpose-built lease accounting software can help finance teams turn these steps into a controlled, repeatable month-end process. Rubli automates journals, supports modifications and remeasurements, maintains a complete audit trail and provides reporting across IFRS 16 and FRS 102.

If your team is preparing for its first close under revised FRS 102, use Rubli’s FRS 102 Lease Readiness Check to identify gaps before month-end. For IFRS 16 or FRS 102 portfolios, book a demo to see how Rubli manages the reporting cycle in practice.