Share this
Lease Accounting Compliance Presents an Opportunity
by Matt Waters, CPA on November 16, 2021
From our whitepaper Data Consolidation for Lease Accounting Compliance: An Opportunity to Create Value for Real Estate and Equipment Management
> Download Whitepaper Now (PDF)
There’s nothing like compliance with new regulations to bring about organizational change. But change presents opportunity. Making wise decisions for compliance with the new FASB and IASB lease accounting standards offers the opportunity to add value to companies by streamlining processes, empowering better decision-making and realizing cost savings.
The first – and most important – decision should involve creating a plan to consolidate real estate, equipment and other leased asset data into a centralized technology system. The accounting group is the best choice for a department to lead such an initiative due to the technical nature of lease reporting requirements. And while other departments may retain responsibility for engaging new leases, the ideal technology solution will manage input from multiple sources and provide administrative insight to key organizational stakeholders.
There are five key areas where a consolidated lease data system can create value for a company’s real estate and equipment management.
1. Better Quality, More Reliable Organizational Lease Data
Having all lease data managed in a single system has some obvious benefits including ease of access and the ability to have a global view of an organization’s obligations. But the transition to one management system also encourages uniform processes for data entry and record-keeping, which leads to overall quality improvement and data reliability. For successful lease accounting compliance, reliability is the ultimate goal.
2. More Accurate Accounting and Reporting
Data reliability fosters complete and accurate accounting, improved auditability and time savings in the preparation of financial reports, 10K footnotes, budgets and forecasts. Time-savings can also be realized with the right software selection, as routine reports can be automated and run at the touch of a button.
3. Better Visibility and Control of Assets
Leases tracked in silos across a company are often managed with varying levels of scrutiny. Not only will the transition to a centralized data management system give companies a more accurate picture of leased obligations, it will provide individual departments with better control over procured assets. Many groups may still use spreadsheets to track leased assets that don’t provide the management benefits of a software system including automated renewal reminders and data change notices. An ideal platform also enables departments to manage payment obligations, set approval workflows and control lease abstracting quality across an entire portfolio of leases.
4. Eliminate Wasted Spending on Outdated or Unnecessary Items
With visibility into all organizational lease portfolios, spending patterns can be seen along with opportunities to eliminate unnecessary spending or over payments on lease obligations. Particularly with equipment management, the two most common areas for wasted spending relate to lack of unbundling and poor end-of-term decision-making. The outcome of these data management weaknesses is that companies overpay for leases. Significant cost savings can result from properly organizing data, enabling company-wide analysis. This also can provide better leverage for negotiations with vendors.
5. Lower Total Cost of Ownership for Lease Management
Perhaps the most compelling reason to consolidate data is the potential for lowering the overall cost of managing leases. A centralized system will likely reduce the overall spend for lease administration across any organization. When shopping for lease accounting software, keep in mind that not all systems offer the same pricing structure. Many large enterprise options have large overhead costs to cover, while other models are priced solely on the number of system users. A better pricing model focuses only on the amount of data managed, based either on the number of leases or amount of data managed, which provides an unlimited amount of system users for all departments and stakeholders in the organization.
Our whitepaper – Data Consolidation for Lease Accounting Compliance – highlights the benefits of a unified lease data management system, the best approach to organizational data consolidation and the problems to avoid in the process.
> Download Whitepaper Now (PDF)
Share this
- ASC 842 (81)
- Lease Accounting Software (74)
- Accounting Teams (39)
- Lease Administration Software (25)
- Retail Tenants (15)
- Commercial Real Estate (12)
- Lease Management (11)
- Market Data and Analytics (7)
- Real Estate Teams (7)
- ESG (5)
- Success Stories (5)
- News and Media Coverage (4)
- Transaction Management Software (2)
- Customer Success (1)
- Office Tenants (1)
- November 2024 (2)
- October 2024 (4)
- September 2024 (2)
- August 2024 (5)
- July 2024 (3)
- June 2024 (3)
- May 2024 (4)
- April 2024 (1)
- February 2024 (1)
- December 2023 (4)
- November 2023 (6)
- October 2023 (4)
- September 2023 (2)
- August 2023 (2)
- July 2023 (3)
- May 2023 (2)
- March 2023 (1)
- February 2023 (3)
- January 2023 (1)
- December 2022 (3)
- November 2022 (4)
- October 2022 (4)
- September 2022 (1)
- August 2022 (4)
- June 2022 (1)
- May 2022 (4)
- April 2022 (8)
- March 2022 (3)
- February 2022 (1)
- January 2022 (2)
- November 2021 (2)
- October 2021 (2)
- September 2021 (3)
- August 2021 (15)
- July 2021 (3)
- June 2021 (1)
- May 2021 (1)
- April 2021 (3)
- March 2021 (1)
- January 2021 (1)
- December 2020 (3)
- November 2020 (1)
- October 2020 (2)
- September 2020 (2)
- August 2020 (3)
- July 2020 (2)
- June 2020 (3)
- May 2020 (1)
- April 2020 (1)
- March 2020 (1)
- February 2020 (1)
- December 2019 (1)
- October 2019 (1)
- September 2019 (2)
- August 2019 (3)
- July 2019 (2)
- April 2019 (69)
- October 2018 (1)
- August 2018 (1)
- July 2018 (1)
- June 2018 (1)
- May 2018 (1)
- April 2018 (2)
- March 2018 (3)
- February 2018 (2)
- December 2017 (1)
- August 2017 (3)
- June 2017 (2)
- May 2017 (2)
- April 2017 (1)
- March 2017 (2)
- January 2017 (2)
- November 2016 (2)
- July 2016 (1)
- June 2016 (1)
- July 2015 (1)
- March 2015 (1)
- June 2014 (1)
- April 2014 (11)
- October 2011 (1)
You May Also Like
These Related Stories