Data Consolidation for Lease Accounting Compliance Guide from CoStar
This guide – co-authored by the former lease accounting manager with the largest home improvement retailer in the U.S. – 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.
The Benefits of One System
Data collection is the easily the biggest obstacle to lease accounting compliance. Leases contain voluminous amounts of data and must be organized in a consistent fashion to comply with the new guidelines. (download the white paper to see how data consolidation can eliminate wasted spending on outdated or unnecessary items)
The first – and most important – decision involves 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.
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.
How to Approach Consolidation
When approaching lease accounting compliance, it’s important to involve all potential project stakeholders and evaluate software options first – before focusing on process changes. With an effective process for vendor demonstrations, stakeholders will begin to see the value of a centralized system and how it will enhance their own departmental functions. Once a software solution is selected, effective data management processes can be created with the vendor and organizational stakeholders. Some vendors may also offer professional services that can greatly reduce the workload required for additional lease abstraction, data migration and the design of data management best practices. (download the white paper to see the Top 10 Questions for Selecting Lease Accounting Software)
Common Problems to Avoid
As data is migrated to a centralized system, many companies will discover that some critical data elements are missing for compliance reporting. This will involve going back to many, if not all, original lease documentation and re-abstracting the pertinent information. It can be a difficult and arduous task to identify critical lease information from the non-lease components. Utilizing a vendor capable of providing specialized lease abstraction services can not only ensure data accuracy, but will help alleviate the need for temporarily staffing or additional demand on internal resources.
By now, most companies have tried to model the impact of the new lease accounting standards on their balance sheets. However, a potential pitfall is failure to share that information with the departments that manage the lease obligations. It’s of upmost importance throughout the compliance process to involve all potential project stakeholders, including socializing the financial impacts of how the new regulations could influence changes in the strategies and decision-making processes used to procure leased assets in many areas of a business.
There’s nothing like compliance with new lease accounting regulations to inspire organizational change. But change presents opportunity. Making smart decisions in preparation for the new FASB and IASB lease accounting compliance requirements presents an opportunity to add value by streamlining processes, empowering better decision-making and realizing cost savings.
This comprehensive guide provides useful insights on the benefits of a unified lease data management system, best practices and the problems to avoid. Additional highlights include:
- 5 key areas where a consolidated lease data system can create value for a company’s real estate and equipment management
- 10 departmental stakeholders to involve in a consolidation project
- 10 key questions for selecting lease accounting and management software
- A Lease Accounting Manager’s first-hand experience with data consolidation at a Fortune 50 company
- A Fortune 500 data consolidation success story
- Get a copy for your project team now. And don’t miss our solutions page for Lease Accounting Software and demonstration videos.
Get a copy for your project team now. And don’t miss our solutions page for Lease Accounting Software and demonstration videos.
Download this helpful white paper for your project team today!