Without Automated Lease Accounting, You Could Fail Your Next Audit

Here’s life without an automated lease accounting workflow: 

The lease administration team changes a critical date in an Excel sheet. The lease accounting team changes the expense structure of a lease.  Both teams enter the same rent amount.  

Excel does nothing to note changes, and nobody walks down the hall to tell the other team about the new intel.  

You can spend hours communicating lease data changes between these two departments. Or, worse, nobody communicates at all. Now month-end close is delayed and everyone is racking their brains to discover why.  

A lease accounting workflow is the internally-controlled journey a lease takes from the real estate team to the accounting team.  

An automated lease accounting workflow is audit-ready, reliable and compliant.  

When assessing new lease accounting software, don’t underestimate the importance of automated workflow for unifying teams and consistent data capture.  

This cross-team collaboration was a key need when the CoStar Real Estate Manager Product Team developed the functionality.  

“We designed the CoStar automated lease accounting workflow to be used by the real estate and accounting teams so they wouldn’t have to double input data,” said Patrick Griffith, Senior Product Manager at CoStar Real Estate Manager. 

Designing a lease accounting workflow  

Your workflow can be as simple or as elaborate as you want it to be. But there are three key elements for any company.  

1. Customizing the steps of your workflow 
2. Controlling the sequence of steps 
3. Assigning rights to specific users 

The key element of setting up your workflow is team dynamics. The size of the portfolio is nearly irrelevant. If your organization is decentralized, with offices and employees all over the world, you can build out a workflow that has multiple touchpoints with relevant parties. 

If two lease accountants are the only ones managing portfolio changes, the workflow would be very brief. 

An automated, customizable lease accounting workflow allows for more flexibility and bends to diverse company's needs. Not to mention, it keeps your balance sheet ready for lease accounting audits.  

“Ensuring your lease accounting software includes a consistent workflow automation is an investment in success,” said Dan Galenkamp, VP of Project Management and Development. 

The benefits of an automated workflow 

“[Lease accounting workflow] reduces manual errors,” said Griffith, “It gives your team structure and audit-able workflow. If some event happens, you sign a new lease, renew a lease, or a pandemic happens and you have to impair a lease, this will help you take care of all of those.” 

• Increased efficiency 
• Reduction in errors 
• Keep things from getting lost or off track. 
• Empowerment of employees to be successful 
• Reduction of the need for hands-on micromanagement 
• Increased visibility to critical information 
• Increased internal communication 

Shopping for software  

When shopping for a lease accounting solution that offers automated workflow, look for a software that offers the following: 

• A quick and easy way users can see how many leases are pending review, pending approval and approved at a glance.  
• The ability to customize the number of approvals and roles based on your company’s individual needs. 
• The ability to run status reports on demand or subscribe to routine email updates. 
• A system that automatically date and time stamps changes and preserves previous data, ensuring true workflow data collection. 
• A system that offers automated safeguards. Such as status automatically flipping back to “needs review” status if the term or expense structure of a lease is changed after approval. 
• A workflow status solution that is integrated into numerous system reports, automated alerts and the accounting dashboard. 

Once you design your process, your company enjoys all the benefits of cohesive and accurate lease management. 

Add success as the last step in your workflow. 

Want to learn more about what a customized lease accounting workflow could look like at your company? Reach out today and get a demo tailored to your needs.