Lease accounting and lease administration teams often end up doing the exact same data-entry tasks, taking hours out of each department’s day. But companies can implement technology so that when one person enters shared data, it reaches both lease accountants and lease administrators.
Lease accounting and lease administration teams need to know rent amounts, payment timing, and lease term dates. The lease admin team needs this data to ensure lessors are paid according to the lease contract. The accounting team needs the same data to calculate each contract’s ROU asset and lease liability to create the amortization schedule and meet requirements for ASC 842 and IFRS 16. Any time the rent or lease term changes, accountants and lease administrators need to know that information.
When lease administration and lease accounting applications are unaffiliated, the lease accounting and administrative teams each must enter some of the same data. When companies have dozens or hundreds of leases, both departments could spend hours each month entering the same data.
A comprehensive lease administration and accounting software solution alleviates the need for both departments to input duplicate data. Once data that both teams need has been entered into the lease administration module, the data appears in both modules.
Without a comprehensive lease administration and accounting software solution, the lease administration team must abstract or key in the lease payment data into one system to make sure the payments are scheduled. Then they must send the same payment info to the accounting team for ASC 842 and IFRS 16 calculations. The accounting team then must enter the payment information again into a spreadsheet or a lease accounting calculator to produce lease accounting amortization schedules. This process of two teams entering the same data twice is rife with data entry errors and must be completed every time there is a new lease and every time an existing lease is modified. With a comprehensive lease administration and accounting solution, the data abstracted by the lease administration team is automatically passed over to the accounting team. The software alerts accountants that new lease info is available so they can kick off lease accounting calculations. All payment information and lease periods entered into the software are available for accounting calculations. This automation cuts data entry time in half and eliminates the potential for human error in the handoff from one department to the other.