Leading lease accounting software provider points to larger SaaS spend management strategy to increase efficiency and reduce costs
ATLANTA, November 16, 2023 – LeaseQuery, a fast-growing software provider with solutions built to efficiently manage companies’ largest areas of spend, today released the first segment of its Technology Lease Benchmark Report, which analyzes lease liabilities and reveals trends across the tech industry.
In response to ASC 842, the new lease accounting standard issued by the Financial Accounting Standards Board (FASB), the tech sector experienced a substantial increase in overall balance sheet liabilities, driven primarily by the recognition of lease liabilities. This trend was exacerbated by the fact that outside of a few pockets within technology (e.g., semiconductors), most companies do not have sizable capital expenditures, resulting in “cleaner” balance sheets with fewer overall liabilities. However, now that companies have transitioned to comply with ASC 842, the annual percentage change in average lease liabilities for the tech sector was less significant than in recent years, with only 15.7% growth.
“As more companies have adopted the new standards into their operational processes, it’s not surprising that we saw a less notable change in lease liabilities this year,” says Justin Smith, CFO of LeaseQuery. “We expect this trend to continue, especially for companies that utilized a lease accounting software to navigate their post-transition audit, making it easier to immediately identify any hidden leases and unnecessary expenses.”
According to LeaseQuery’s recent post-ASC 842 survey, approximately one-third of companies used a lease accounting software for their first, post-transition audit, and many of the respondents expressed how advantageous a software solution was during their transition to the new accounting standard. Furthermore, the data revealed in the company’s Lease Benchmark Report highlights the critical role of software in facilitating compliance and reducing spending, ultimately affecting a company’s bottom line.
As technology companies seek additional ways to reduce spending by investing in software, new challenges lie in the hidden costs associated with effectively managing spending related to software subscriptions and other contracts. LeaseQuery’s most recent brief emphasizes the critical role of a comprehensive SaaS spend management strategy as the ultimate key to unlocking efficiency, regulatory compliance, and reduced spending in the ever-evolving technology sector.
Download the full Technology Industry Lease Benchmark brief here: https://leasequery.com/download-technology-industry-lease-benchmark-brief/
LeaseQuery makes customers’ lives easier by simplifying the complex with technology. More than 34,000 professionals rely on LeaseQuery to make better business and financial decisions for two of their largest areas of spend – leases and software subscriptions – something no other provider offers in the market. Our AI-powered software helps businesses minimize risk, increase efficiency and reduce costs.
Discover LeaseQuery’s award-winning accounting solutions, which focus on easing the mandatory transition to ASC 842, IFRS 16, GASB 87 and GASB 96 and LeaseQuery’s SaaS spend management solution here. For more information, visit LeaseQuery.com.