Lease accounting is a massive, cross-functional effort. It involves various stakeholders and systems that impact (and are impacted by) leases. It is not just an accounting problem – and goes further beyond producing a disclosure report.
The dynamic nature of leases prompts constant adaptation, and organizations need an easy way to manage those changes. The bigger the portfolio, the more complicated it becomes, which is why it is important to determine how you will handle accurate lease information and financials.
There needs to be a reliable way to manage leases throughout the year, given lease changes can result in hundreds, potentially thousands of calculations and permutations. While the market offers a wide selection of solutions, not every tool is one-size fits all. Each lease accounting solution offers its own experience – from implementation to daily usage and beyond.
In this blog, we’ll break down the top differentiating areas and questions you should consider (beyond producing accurate calculations and reports) when evaluating lease accounting software.
Configurability vs. customization
Every business is unique with their own processes and leases that contain specific information. Your lease accounting solution should be flexible to match the way you run your business. Weighing the differences between a custom and configurable solution can save you significant time and money.
- Does the solution require customization for unique business requirements? If so, what are the costs and what is the maintenance associated with customization?
- Does the solution support configurable data fields, groupings and financial categories to match your industry and organization?
- Can the solution generate ad-hoc reports on the fly?
Configurable software allows you to make changes and adjustments, making it more adaptable to evolving business needs and reducing maintenance costs. On the other hand, customized solutions may provide more tailored features, but they can be costly to implement and maintain. Assess the balance between these options to ensure your software aligns with your business needs while being cost-effective and easy to update.
Customer experience
At the end of the day, your lease accounting solution relies on the people using it. Make sure you are properly set up and running with thorough, dedicated customer support from implementation and beyond.
- Does the vendor provide in-house implementation support?
- Does the vendor offer ongoing customer support at no additional cost? What are their estimated response time SLAs?
- Does the vendor provide ongoing trainings and helpful tools dedicated to various users?
- Is the vendor committed to continuous product enhancements based on customer needs?
Quality customer service ensures that your team can get up and running quickly and continues to get the most out of the software as your needs change. Look for a vendor that offers in-house implementation support and ongoing customer service at no additional cost. Continuous training and comprehensive user resources show that a vendor is committed to your success. Make sure the level of support provided aligns with your expectations and the availability of helpful tools for users.
Integrations
Your lease accounting software should be able to handle even the most complex lease administration and accounting scenarios, including data imports and exports to various third-party solutions for a true return on investment.
- Does the software integrate with your existing technology infrastructure, such as your ERP and financial systems?
- Does the software offer flexible options to schedule, monitor, manage and automate data imports and exports between third-party applications?
Your lease accounting software should integrate with your existing business systems, such as ERP and financial systems. The right software supports data synchronization and offers flexible options to manage data imports and exports between third-party applications. This allows you to automate routine tasks and ensure data is consistent across all platforms. This reduces manual data entry and provides a better view of your financial information.
Ease of use
Lease accounting is complex and requires constant adaptation from a variety of stakeholders. You need an easy way to view, track and manage all updates for full auditability.
- Is the user interface intuitive and easy to use?
- Does the solution support the ability to view changes made by various users?
The easier it is for users to view, track, and manage updates, the more efficiently your team can stay compliant and perform audits. An ideal solution should provide a simple way to see changes made by users, with clear audit trails that record all actions taken within the system. This minimizes errors and ensures that stakeholders can quickly access the information they need.
Security
There is a lot of money – and risk – in most lease portfolios. Make sure you feel confident in your solution’s ability to keep your information safe and generate accurate calculations.
- Are there tools for administering individual and group users for system access, roles and permissions?
- Is the solution and calculations backed by a SOC I Type II audit?
A lease accounting solution should offer tools for administering user access, roles, and permissions, to ensure that only authorized users can view or modify sensitive data. A SOC 1 Type II audit shows that the software’s security and calculation processes meet standards and proves that your data is accurate and safe. Evaluate the software’s security protocols to make sure they align with your organization’s data protection requirements.
Selecting the right lease accounting solution for your business is critical to your success. Evaluating various tools is a necessary part of the process to ensure you are equipped with what is needed to meet ASC 842, GASB 87 or IFRS 16 compliance.
If you’re in search of an all-encompassing lease accounting management software that ensures you’re achieving and maintaining compliance, Visual Lease’s platform is the solution you’ve been looking for. Schedule a demo with our team to see if we’re a match.
