Automating Hybrid Rent Models Across National FMCG Network
How MYND helped a leading FMCG distribution network streamline complex rental structures, achieve IND AS 116 compliance, and gain complete visibility into rental expenditure across hundreds of locations nationwide.
Key Outcomes
Measurable results from this engagement
About the Client
Our client is a leading FMCG distribution network managing an extensive portfolio of distribution centers and retail touchpoints across India. With operations spanning multiple states and regions, the organization handles diverse product categories through a complex network of owned and leased properties.
The client's property portfolio includes a mix of warehouses, distribution hubs, and retail outlets operating under varied rental structures. Some locations operate on traditional fixed-rent models, while others utilize revenue-sharing arrangements where rent is calculated as a percentage of sales—a common practice in the FMCG retail sector to align property costs with business performance.
Industry Context
FMCG distribution networks in India typically operate with thin margins and high transaction volumes. Lease costs can represent 15-25% of operating expenses, making accurate lease management and compliance critical for profitability. The introduction of IND AS 116 has added complexity by requiring all operating leases to be recognized on the balance sheet, significantly impacting reported liabilities and assets.
Client Profile
FMCG Distribution Network
Industry
Fast-Moving Consumer Goods (FMCG) Distribution & Retail
Geographic Presence
Pan-India operations with distribution centers and retail touchpoints across multiple states
Property Portfolio
~100s locations including warehouses, distribution hubs, and retail outlets
Rental Model
Hybrid structures combining fixed rent and revenue-sharing (percentage-of-sales) arrangements
Challenges That Demanded a Modern Solution
Managing lease accounting and rental operations across a distributed FMCG network presented multiple interconnected challenges that impacted financial accuracy, compliance posture, and operational efficiency.
Complex Hybrid Rental Structures
Managing diverse rental structures including fixed rent and revenue-sharing arrangements across multiple locations. Each location had unique terms, escalation clauses, and calculation methodologies that required individual handling.
IND AS 116 Compliance Requirements
Meeting IND AS 116 compliance requirements for lease accounting and disclosure. The standard mandates recognition of Right-of-Use (ROU) assets and lease liabilities on the balance sheet, requiring precise calculations and ongoing tracking.
Dispersed Property Data
Store property data dispersed across regional teams with no central repository. Critical lease documents, rental terms, and landlord information were scattered across multiple locations and systems, creating data silos.
Error-Prone Manual Calculations
Manual calculation of revenue-based rent components prone to errors. Percentage rent calculations based on sales performance required monthly data gathering and complex computations that were time-consuming and unreliable.
Non-Standardized Processes
Lack of standardized lease administration processes across the organization. Different regional teams followed varying procedures for lease renewals, modifications, and landlord communications, creating inconsistencies.
Limited Financial Visibility
Limited visibility into total rental expenditure and forecasting. Management lacked consolidated views of current obligations, upcoming renewals, and projected rental costs for budgeting and strategic planning.
Business Impact
These challenges collectively resulted in delayed financial closes, compliance risks, strained landlord relationships, and inability to make informed decisions about property portfolio optimization—critical concerns for a growing FMCG network where lease costs significantly impact operating margins.
Comprehensive Lease Management Transformation
MYND implemented an end-to-end lease accounting and property management solution using MYNDLeaseX—our proprietary platform designed specifically for complex, multi-location lease portfolios in the Indian market.
Property Master Setup
Implemented comprehensive property master setup for all store locations, creating a centralized repository of property information including location details, lease terms, landlord data, and associated documentation.
Centralized Property Repository
- Unified property database
- Complete lease documentation
- Location-wise tracking
- Historical data migration
Dynamic Calculation Engine
- Fixed rent processing
- Revenue-share calculations
- Escalation clause handling
- Hybrid model support
Hybrid Rent Calculation Engine
Configured dynamic calculation engine for hybrid rent structures combining fixed rent and revenue-sharing components. The system automatically computes percentage rent based on sales data with configurable thresholds and caps.
IND AS 116 Compliance Framework
Deployed comprehensive IND AS 116 compliance framework with automated ROU asset and lease liability calculations. The system generates compliant disclosures, amortization schedules, and modification impact assessments.
Compliance Automation
- ROU asset calculations
- Lease liability tracking
- Disclosure generation
- Modification handling
Vendor Management
- Landlord onboarding
- KYC documentation
- Payment tracking
- Communication logs
Vendor Onboarding Workflows
Established streamlined vendor onboarding workflows for landlord management including KYC collection, bank detail verification, TDS compliance, and communication tracking through a unified portal.
Contract Management System
Set up robust contract management system with centralized document storage, version control, renewal tracking, and lease modification handling. Automated alerts for key dates ensure no deadlines are missed.
Document Repository
- Centralized storage
- Version control
- Renewal alerts
- Audit trail
ERP Integration
- Automated GL postings
- Real-time sync
- Payment automation
- Reconciliation support
ERP Integration
Integrated automated accounting entries with existing ERP infrastructure, enabling seamless data flow between lease management and financial systems. Real-time synchronization eliminates manual journal entries and reconciliation efforts.
Transformational Results Across the Organization
The implementation of MYNDLeaseX delivered measurable improvements across lease management operations, compliance posture, and financial visibility for the client's nationwide FMCG distribution network.
Unified Rental Management
Operational ExcellenceThe dynamic calculation engine now handles percentage rent calculations based on sales performance and complex escalation clauses across all locations automatically. What previously required manual effort from multiple regional teams is now processed through a single, standardized system—eliminating calculation errors and ensuring consistency in rent computations regardless of the complexity of individual lease terms.
Reduced Accounting Workload
Efficiency GainManaging IND AS compliance reduced accounting team workload significantly. Automated ROU asset calculations, lease liability tracking, and disclosure generation eliminated the manual spreadsheet-based processes that previously consumed substantial finance team hours each month. The accounting team can now focus on analysis and strategic activities rather than data compilation and calculations.
Improved Operational Efficiency
Process OptimizationCentralized property master and contract management with comprehensive lease modification tracking eliminated regional inconsistencies. All teams now work from a single source of truth for property data, lease terms, and landlord information. Standardized workflows ensure consistent processes across all locations, from lease initiation through renewal or termination.
Enhanced Financial Visibility
Strategic InsightOn-time visibility into rental obligations across the entire network enabled better budgeting and forecasting. Management now has access to consolidated dashboards showing current commitments, upcoming renewals, payment schedules, and projected costs. This visibility supports informed decision-making for property portfolio optimization and strategic planning.
Ready to Transform Your Lease Management?
Whether you're managing a handful of locations or a nationwide network, MYND can help you achieve IND AS compliance, reduce accounting workload, and gain complete visibility into your rental obligations.