News January 21, 2018

Component Accounting made easy for Guernsey Housing Association

Guernsey Housing Association (GHA) has become the latest organisation to choose MRI Software’s (MRI) component accounting software due to its proven track record of delivering results in the not-for-profit sector. It sought a user-friendly, cost-effective solution that could be configured quickly and one that was compliant with FRS 102 and the latest Housing SORP regulations. The system will assist GHA with annual audits and producing Year-End reports.

GHA was set up in March 2002 and is an independent, not-for-profit organisation. It was sponsored by the States Housing Authority as part of its programme to provide social housing for people local to the island. It provides partial ownership opportunities for buyers that need help, making the purchase of property in Guernsey more affordable.

The organisation manages over 790 residences for Guernsey locals with lower incomes and is aiming to complete more than 300 new homes over the next five years. With such high levels of growth projected, GHA decided to move from an Excel™ based asset management system to MRI’s software. Christine Jennings, Finance Controller at GHA comments, “We feel that, given our projected expansion, using spreadsheets to manage the asset base would be restrictive and too open to error.

“We will use the system to improve the forecasting of costs incurred by replacing components. Our oldest properties are now over 12 years old so this will save us a lot of time. The software allows us to calculate costs far into future financial years – giving us a clear picture of the effect that component depreciation will have. With the increased visibility of how our Net Book Values will change over time, we will be able to make informed decisions on whether it would be more cost-effective to repair or to replace assets.”

The software will improve many aspects of GHA’s asset management processes. It will automate component replacement exercises with in-built functionality that allows users to import disposal events and new assets using Excel™. Christine comments, “The new system will improve depreciation calculations and moving from spreadsheets to specialist software is going to decrease the risk of errors significantly. Having all of the current and forecasted costs collated in one place will make it far easier for us to produce reports featuring any asset or depreciation information that we require”.

MRI’s system guarantees compliance with all corporate regulations, whereas many finance products feature a fixed asset module that delivers the bare minimum with regards to component accounting. Moving from spreadsheets will cut down on the manual processes usually required to reconcile end of year accounts. The software caters for depreciation of grant components, which is a key requirement of FRS 102. The system’s reports are extensive and will ensure that manual adjustments are not required after running them.

“We will have a clear audit trail that will enable us to delegate many tasks to junior staff”, continued Christine. “This will save senior team members from needing to have significant input into the day-to-day management of fixed asset accounting. The system will improve the utilisation of resources whilst also saving us a considerable amount of time.

“I have found everybody I’ve dealt with at MRI to be helpful and extremely knowledgeable about its product and accounting for components, grants and fixed assets in general. I was introduced to the system at a Housing Finance conference where it was recommended to me by two other Associations. Its pedigree in the sector made it an easy choice”.

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