Lease accounting software can help with compliance efforts regarding the new Lease Accounting Standard, ASC 842, issued by the Financial Accounting Standards Board (FASB). The first major accounting overhaul in 40 years, ASC 842 brings footnoted leases to the forefront of balance sheets and requires qualitative and quantitative disclosures on timing, amount and unpredictable cash flows that arise from leases. Moving these details to the balance sheet is a huge undertaking and maintaining compliance requires an effective and accurate reporting process. Relying on a proven lease accounting software will clarify the process and determine the specific criteria important to your lease management needs.
Organizations assessing lease accounting software to help with ASC 842 compliance should look for these characteristics:
Accurate Interconnectivity
Consider whether a complete replacement of an outdated system(s) is warranted, or if software is needed to integrate with an existing system. No matter that the extent, is crucial for the new technology to be interconnected into any existing ecosystem for accurate lease management reporting and compliant with the new ASC 842 tax standards. New software technology that integrates with existing ERP and IWMS systems mine the data and accurately categorize it for updated, verifiable, and time sensitive reporting.
Increased Usability
With new technology standards, usability standards have vastly improved as well. Lease accounting software that is accountant approved and vetted ensures all the bugs have already been worked out and the user journey thoroughly tested for successful balance sheet compliance.
Good reputation
Choose a long-term partner as your lease accounting software vendor with a good reputation for customer support, implementation and ongoing data management and operations. Ensure their long-term viability by ensuring they are backed by a larger financially stable parent company.
Fit Your Needs
The best lease accounting software should fit your business needs by optimizing business management and operations while still being cost effective to your company.
Do Your Research
Know what the top accounting firms recommend for lease accounting software and ask questions of your accounting peers in different organizations. Renewal rates are a good indicator of software quality and customer satisfaction, such as CoStar’s 99 percent renewal rate for its lease accounting software. When researching the right lease accounting software, be aware of any maintenance costs, upgrade fees or hidden costs. Cloud-based systems (SaaS solutions) can be more cost-effective long term with features like unlimited user models, no software upgrade fees, and pay-per data pricing. The decision to upgrade lease accounting software should not only streamline your accounting processes, but also helps your organization become more efficient.
