10 Key Questions to Assess Lease Accounting Software Solutions
For companies evaluating potential software solutions for compliance with the new ASC 842 and IFRS 16 lease accounting standards, there are some key things to look for in order to understand the functionality and the true value the solution brings. First off, it is important to make sure any potential solution has the full technical accounting capabilities needed to manage and report on all types of leased assets. Other technology considerations include security audits for SOX compliance, integration capabilities with other corporate systems and the long term costs associated with upgrades and new required capabilities.
Beyond the technical capabilities of the software, it is important to look at the company behind the software. Since the official announcement of the new standards, many vendors have started selling software that is not fully developed or has barely been tested. The smarter choice is to select a system with a proven track record of helping large organizations comply with existing FASB and IASB standards while preparing to meet requirements of the new guidance for years. Additionally, a company with stable financials is ideal so that the selected software system will be operational for years to come.
The 10 most essential questions to ask lease accounting software vendors are:
1. Can your solution produce standard accounting reports and custom ad hoc reports?
2. Does your system provide audit trails and tracking of all data changes?
3. Is your system officially recommended by any notable accounting firms?
4. Is your platform backed by a financially stable organization for long-term data management?
5. Is your platform proven, with more than 5 years of FASB and IASB compliant functionality?
6. Can your system manage and report on real estate, equipment and other leased assets?
7. Is your software delivered in a cloud-based, SaaS (software-as-a-service) format?
8. Will software updates and future versions be provided free of additional upgrade costs?
9. Does your platform complete an annual SSAE 16 audit for Sarbanes-Oxley compliance?
10. Does your system readily integrate with existing ERP and IWMS systems?