JBS SA, headquartered in São Paulo, Brazil, is a global leader in the food processing industry. JBS SA stands as the second-largest multinational food company operating in over 20 countries, boasting 500 production facilities, and employing more than 250,000 individuals globally.
JBS USA is JBS SA’s largest subsidiary, managing around 12,000 leased assets worldwide, with 59% located in the USA, 21% in Mexico, 14% in Europe, and 6% in Australia. Their diverse lease portfolio comprises real estate, fleet, manufacturing machinery and equipment, grower contracts, and office equipment leases. After extensive research and evaluation of various vendors, JBS USA selected Nakisa’s lease accounting software (AKA Nakisa Lease Administration or NLA) and has been using it since 2019 to manage these complex leasing needs efficiently.
For this case study, we had the pleasure of interviewing Kiersten Sommers, IT Director and S4 Functional Lead at JBS USA, during the Nakisa Connect 2022 conference. This annual event, tailored for professionals in HR, Lease Administration, and Real Estate, provided an ideal setting for Kiersten to share insights on lease accounting best practices and technology, based on her impressive 25-year career at JBS USA, where she has held notable roles such as Assistant Controller, Corporate Controller, and her current position as IT Director and S4 Functional Lead.
Kiersten Sommers
IT Director and S4 Functional Lead at JBS USA
JBS USA’s lease accounting challenges before Nakisa
From a lease administration perspective, JBS USA employs a decentralized approach across regions, granting each regional group the flexibility to address its specific needs. At the same time, they use a streamlined, standardized framework for maintaining and negotiating lease agreements with Nakisa Lease Administration (NLA). This ensures consistency and efficiency while accommodating regional variations.
Here are the main challenges highlighted by Kiersten:
Scalability issues in managing users and company codes
With approximately 45 users globally and over 40 company codes, JBS USA needed a scalable and easily adoptable solution to support their operations. What’s more, JBS USA typically acquires two to four companies annually, so the company needed a future-proof solution that could seamlessly scale with their growth.
Overwhelming challenges of dual reporting standards
The company operates under a complex financial structure, making it unique in the industry. JBS USA, a privately held entity, reports under US GAAP (ASC 842), while its majority-owned subsidiary, Pilgrim's Pride, is publicly traded in the US. Additionally, both companies report up through JBS SA, which is publicly traded in Brazil and follows IFRS 16 reporting standards. These dual reporting requirements necessitate a robust and flexible lease accounting system.
Kiersten Sommers
IT Director and S4 Functional Lead at JBS USA
High complexity of extensive transaction volume
The transition to the leasing standards in 2018 brought substantial changes. Previously, lease transactions involved a simple two-line journal entry—debit and credit. Post-adoption, the transaction complexity increased, with up to six transactions per contract to account for both asset and liability perspectives, including current and non-current liabilities. This increase in transaction volume required a system capable of handling the complexity systematically, moving away from manual Excel tracking.
Operational inefficiency due to manual processes
JBS USA was dealing with operational inefficiencies stemming from manual management of lease schedules in Excel and the lack of seamless SAP integration. This resulted in fragmented visibility and difficulties in consolidating contract information across various regions and companies, complicating financial and operational oversight.
Kiersten Sommers
IT Director and S4 Functional Lead at JBS USA
Ineffective dual-currency management
JBS USA also faced challenges with dual-currency transactions. Notably, their Mexico operations had a functional currency different from the transactional currency, necessitating a system that could manage these currency conversions effectively. In addition, operating as a multinational entity with dual reporting structures, JBS USA faced a complex tax environment. The chosen system had to support the intricate tax requirements related to leases, ensuring compliance across various jurisdictions.
Nakisa's lease accounting software implementation: from on-prem to cloud
In January 2019, JBS USA embarked on its road to compliance with IFRS 16 and ASC 842 leasing standards, necessitating a system capable of ensuring accurate calculations and disclosures under both US GAAP and IFRS 16. Initially implementing an on-premises version of Nakisa's software, they transitioned to the cloud in September 2021. The need for automated lease accounting drove this shift, improved stability and performance, reliable service and support, and robust security and compliance. Let’s hear from Kiersten as she explains why JBS USA selected Nakisa's cloud-native lease administration software:
Results achieved with Nakisa’s cloud-native lease accounting software
Building on the benefits of Nakisa’s cloud software, JBS USA saw tangible results that enhanced their lease management and accounting capabilities. Kiersten highlights the key outcomes achieved with the cloud-native leasing solution, showcasing how it met their objectives and delivered substantial benefits. The results include:
- Seamless dual reporting and dual-currency management
- Enhanced global lease portfolio oversight and scalability
- Improved operational efficiency and lessor relationships
- Robust security and faster upgrades
- Streamlined migration and simplified reconciliation
- Effective project management and support
- Advanced service level agreements and exceptional performance
In the following section, we delve deeper into each result.
Seamless dual reporting and dual-currency management
Nakisa’s cloud-native lease accounting software effectively addressed JBS USA’s complex financial structure and reporting requirements. The out-of-the-box disclosure reports efficiently met quarterly reporting requirements under IFRS 16 and ASC 842 and included activity and periodic posting reports to support the control environment. The solution also provided robust support for managing dual-currency transactions and ensured compliance with intricate tax regulations across multiple jurisdictions, enhancing accuracy and efficiency in JBS USA's multinational operations.
Kiersten Sommers
IT Director and S4 Functional Lead at JBS USA
Enhanced global lease portfolio oversight and scalability
Nakisa’s lease management software centralized all lease data, effectively managing over 12,000 leased assets. This solution provided robust features, including effective FX remeasurements, scalability for handling users and company codes, as well as managing high transaction volumes with ease. By automating processes and integrating seamlessly with SAP ECC6, the software eliminated operational inefficiencies, offering a unified system for accurate and efficient lease accounting across all regions and companies. Additionally, Nakisa's scalable solution supported JBS USA’s growth, enhancing both accounting and disclosure reporting needs. JBS USA engaged regional teams early in User Acceptance Testing (UAT) to ensure that all leasing scenarios were addressed and to prevent potential issues arising from regional differences.
Kiersten Sommers
IT Director and S4 Functional Lead at JBS USA
Improved operational efficiency and lessor relationships
Nakisa’s cloud-native lease accounting solution streamlined operations by automating postings such as depreciation and accruals, while integrating report schedulers, bulk actions, and pre-load audit checks. This approach significantly saved time, reduced errors, and enhanced efficiency for end users. The software also simplified the management of quality and productive environments, improving the handling of environment refreshes and copy backs. With robust accounting features, Nakisa facilitated lease reassessments and provided a comprehensive set of quantitative note disclosures. Additionally, the software’s proactive data leveraging minimized costs, strengthened lessor relationships, and reduced the dependency on multiple Excel spreadsheets.
Kiersten Sommers
IT Director and S4 Functional Lead at JBS USA
Robust security and faster upgrades
The transition to Nakisa’s cloud-native leasing software provided JBS USA with enhanced confidence in system controls and compliance, supported by SOC 1 Type II and SOC 2 Type II reports. With robust security measures in place, JBS USA redefined their security approach by leveraging Active Directory security groups and utilizing pre-delivered security roles from the software to ensure compliance with segregation of duties requirements. Additionally, the software upgrade process became more efficient, requiring only thorough and precise testing from JBS USA. The integration of the posting bot facilitated effective dual communication with SAP ECC6, allowing for quick resolution of issues and streamlining the overall upgrade process.
Kiersten Sommers
IT Director and S4 Functional Lead at JBS USA
Streamlined migration and simplified reconciliation
JBS USA’s choice to decouple from the fixed asset module streamlined the reconciliation process, offering increased flexibility in managing issues and transactions and enabling a more straightforward two-way reconciliation. The migration from on-premises to cloud was executed as a "lift and shift", ensuring a seamless transition with zero reconciliation issues and allowing periodic postings to remain current and up to date. Additionally, a redesign of the chart of accounts facilitated easier updates to master data.
Kiersten Sommers
IT Director and S4 Functional Lead at JBS USA
Effective project management and support
Effective collaboration between Nakisa and JBS USA’s teams, including project managers, IT professionals, and stakeholders, was crucial for the migration’s success. Regular updates and use of tools like Jira ensured clear communication and issue tracking.
Kiersten Sommers
IT Director and S4 Functional Lead at JBS USA
Advanced service level agreements and exceptional performance
Previously, JBS USA managed reporting with manual processes and no integrated system, which made it difficult to generate timely and accurate disclosures. While the Nakisa on-premises solution provided improvements over manual methods, it still required some monitoring and manual intervention, especially during peak performance periods. Nakisa’s cloud solution enhanced efficiency by further automating processes, eliminating manual oversight, and delivering a more scalable and stable system that supports seamless and effective reporting from Q1 onward. Additionally, the software offered clearer service level agreements and streamlined management of issues, defects, and enhancements. It also provided enhanced capabilities for accurate calculations, disclosure reporting, and bidirectional integration with SAP ECC6, including seamless read and write capabilities between NLA and SAP ECC6 GL and AP modules. GL and AP modules.
Kiersten Sommers
IT Director and S4 Functional Lead at JBS USA
Overall, JBS USA’s cloud migration journey with Nakisa proved to be a positive and transformative experience, enhancing stability, functionality, and efficiency across their leasing operations.
A bright future for the JBS USA and Nakisa partnership
Following their successful migration to the cloud, JBS USA and Nakisa have embarked on several exciting projects to further refine their systems and processes. Let’s hear from Kiersten as she explains why Nakisa is JBS USA’s trusted software partner and how their collaboration has driven significant improvements.
A key initiative Kiersten discussed during the interview is JBS USA’s phased migration from SAP ECC6 to SAP S/4HANA. This transition began in 2022, with some company codes already successfully migrated to SAP S/4HANA. The migration process for the remaining company codes will continue and is expected to be completed by 2026. This progressive shift promises a future of continued enhancements and future-ready solutions for JBS USA.
Searching for lease management software designed for high transaction volumes, multi-standard compliance, multi-currency operations, and advanced accounting?
If you’re aiming for a success story like JBS USA, where managing over 12,000 leases—spanning from real estate to manufacturing machinery—is seamlessly handled, Nakisa’s lease accounting software is your best solution.
Designed for global enterprises, our cloud-native solution offers robust scalability and adaptability while ensuring parallel compliance with IFRS 16, ASC 842, and local GAAP standards. With seamless bidirectional integration with various ERPs and automated lease administration, Nakisa can help your company streamline the most complex accounting processes.
Schedule a free demo now and discover how our solution can transform your lease management operations.
