Most accounting software is able to provide benefits that go beyond compliance. In lease accounting, this is especially true.
Many organizations who already transitioned to the new accounting standards were leasing a substantial number of assets, resulting in huge increases in their balance sheet liabilities. As a result, however, these companies now have more financial information and actionable data on their leases than ever before – all accessible and conveniently stored within their lease accounting systems.
The benefits of the systems designed to help your organization transition to FASB ASC 842, IFRS 16, and GASB 87 don’t stop at compliance. Implementing LeaseQuery will enable your team to work more efficiently, improve the audit process, and help you make smarter financial decisions.
Improve your budgeting, forecasting, and financial decisions
How much money will you spend on your leases next year? Can you identify how much you’ll spend by a particular region, department, or business division? With the enormous amount of data on your leases that’s contained within a lease accounting system, you can get deeper insights into your lease agreements and the financial details than ever before.
You will have to do a lot of heavy lifting to make these calculations if you’re using Excel for lease accounting. On the other hand, the custom reporting features in LeaseQuery make it easy to generate a report on any allocation or segment you choose. With this information at your fingertips, you can offer your colleagues expert advisement as they enter and renew their lease agreements.
To learn more about how accounting software can help you improve your budgeting for capital assets, read our blog, “Improving Capital Budgeting Decisions Using Finance and Accounting Tools.”
Never miss a critical date or lease renewal
We’ve covered the costliness of missing critical dates by performing your lease accounting with Excel in this blog. When the accounting department isn’t informed of lease renewals, extensions, and other key dates, it can result in overpayments, missed payments, and late fees. And that’s frustrating. After all, it’s not that you aren’t on top of things – it’s just that you don’t have the information you need.
More than likely, you’re relying on an internal process where the person who manages leases or contracts notifies you of the upcoming critical date. That leaves a lot of room for error. LeaseQuery allows you to enter all of the important dates relevant to a lease and the system can send automated alerts before a critical date approaches so you’re informed.
Additionally, if your team has already transitioned to the new accounting standards, then you’ve likely already identified leases in your portfolio that your company should not renew. This might include equipment that is no longer being used or leases with contracts that no longer make economic sense. Setting up critical alerts for these renewal dates allows you to make sure that you’re not wasting money or missing opportunities to negotiate better lease contracts.
Better interdepartmental collaboration
If you’re using Excel, there could be multiple departments in your company that are engaged in leasing agreements. Do you have a dedicated resource for managing these lease contracts? Each department that deals with leases has its own interests to consider and its own related challenges.
Implementing lease accounting software solves many of these challenges for your colleagues in other departments. For example, the legal department can easily pull up contracts using a search function and the facilities team can also benefit from being alerted to upcoming critical dates. When you enter a lease into LeaseQuery, you can receive alerts that notify you of documents that you may need in order to complete the entry. This enables you to request those documents from your colleagues well before you close out the month or the quarter.
Financial statement audits are easier and more efficient
There’s no doubt that any efficiencies or improvements to the audit process make life easier. Responding to your auditors’ requests for documents and reports is a headache and they don’t like having to ask for that information.
An easy-to-use lease accounting software makes everyone’s job easier by allowing you to give your auditors read-only access to the system. They can then log in to pull the reports and data that they need and you don’t have to stress about providing the requested documentation.
The software’s lease database provides easier access to your contracts and documents
How are you currently housing your lease documents? Are they in PDFs on a server? Does each individual department maintain their own? How long does it take you to find a document when you need it? Implementing cloud-based software with a centralized lease database is a much simpler and better approach.
Following implementation of your lease accounting software, you have access to all of your contracts and other lease documents from any location as long as there’s an internet connection. Searching for documents on a network drive is difficult, but the LeaseQuery system has more sophisticated functionalities that make it easier to find what you’re looking for.
Implementing a lease accounting system certainly requires hard work, but there is a silver lining. Some of your most cumbersome and time-consuming tasks will be simpler and easier than ever before, saving you valuable time without sacrificing your accuracy.
You don’t have to wait to experience these benefits
All organizations that implement lease accounting software, even government and private entities that are still in various phases of their transition projects, can start taking advantage of these features prior to their transition dates. As a result, they will be better prepared to create their first post-transition journal entries, amortization schedules, and reports when they reach the deadline.
If your company has greater than ten leases, it’s likely that you’ve already implemented a solution or you’re planning to purchase one. The sooner you compare lease accounting systems and select one, the sooner you can start enjoying these time-saving, error-reducing benefits. Schedule a LeaseQuery demo and free consultation today to learn more.