Companies are tackling the complex decision-making process of selecting a new software for ASC 842 and IFRS 16 lease accounting standard compliance. As with any complex decision, it’s helpful to isolate and prioritize different software capabilities. However, different departments may value features and capabilities differently, as IT may place data security as a high priority while the Accounting department is seeking a software with an easy user-interface. While potentially frustrating, they all are right, and soliciting input from various departments will result in a better purchase decision. Creating a cross-functional team is one of the most valuable lease accounting tips for private companies tackling implementation.
Here are priorities on how major requirements different audiences may have when shopping for lease accounting software:
It needs to be compliant
While this criterion is obvious, the Accounting and Finance departments need software with the ability to make the calculations needed for ASC 842 and IFRS 16 compliance needs to be in the formal scope of work.
It needs to be user-friendly
The decisions made during the implementation process will have broader implications. Commonly referred to as “Day 2,” the project team needs to ensure the solutions put into place are sustainable for employees who will be user-friendly for the employees executing day-to-day accounting operations.
It needs to be easy to deploy and integrate
Software selection and project implementation are resource-intensive undertakings. Many companies are approaching HR departments, look to reallocate human resources to project implementation. Ideally, the lease accounting software selected offers consulting services to provide the know-how and extra hands needed on a temporary basis.
From a technical standpoint, it should also offer extensive out-of-the-box functionality, making it easier for new users to get up to speed easily. Cloud-based software offers the most rapid deployment option, especially compared to large enterprise systems. Because it is cloud-based, there are none of the headaches associated with installing servers, equipment and software on-site.
Data security is a must-have
Lease data is at the heart of business operations and reporting requirements, and therefore it is essential that businesses do not compromise on data security features and functions. No doubt, the IT department will want a solution designed to mitigate potential damage caused by data loss, system downtime or hackers by selecting a solution that provides redundancies, firewalls and other physical and virtual barriers to harmful security threats.
It needs to be a smart solution
When approaching leadership for budget and project plan approvals, this is not the time to roll the dice. When vetting lease accounting software, look for a battle-tested and proven solution offering extensive functionality on a mature SaaS platform. Managing both real estate and asset lease data in one system should not be new, and the solution should be reviewed and vetted by highly respected CPAs and accounting firms.
The smart solution also leverages the investments already made in other software systems with ERP integration capabilities, and offer experience integrating with specific types of IWMS platforms.
Pricing is based on lease count, not users, for cost efficiency. This means companies can grant access to those who need it to make informed decisions and get their job done efficiently – without incurring additional costs. Learn more about CoStar’s lease accounting software, lease management software, lease administration software and see why 99% of CoStar customers renew their contracts every year.
Learn more about the benefits of a cross-functional team for lease accounting compliance.