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Accounting Visual Lease

Lease Accounting and Lease Administration Software: Why You Need Both

Sponsored by Visual Lease

Make sure you have the proper software stack to be and stay compliant with FASB ASC 842 & IFRS 16.

©Dmitrii_Guzhanin/iStock/Getty Images Plus

Lease accounting compliance is the first step toward better lease management

Because of the complexity of the new lease accounting standards, many organizations are making the decision to implement lease accounting software to generate accounting calculations, disclosures, and reports for their lease portfolio. Chances are your accounting team is looking at solutions now for achieving compliance by the end of the year. You will find many point solutions on the market that focus on the immediate issue only: lease accounting report generation.

The problem is, many of these products fail to address the organization’s long-term lease management and reporting needs. Accounting teams that adopt these limited solutions may find themselves with a lot of unexpected work in the future. Plus, your organization is leaving money on the table if you fail to take advantage of this opportunity to take control of wasted spending often associated with leases.

Lease administration software saves both time and money

Streamline ongoing lease reporting  

Transitioning to the new lease accounting standards is only the beginning of an ongoing process. That’s why you can’t approach lease accounting with a set-and-forget mindset. Lease portfolios change all the time and balance sheets must reflect those changes, so you’ll need to update lease disclosures frequently. Point solutions for lease accounting often do not consider this process.

Lease administration software is designed to manage your lease portfolio and alert the accounting team about changes they need to know about. There are many types of lease changes that require recalculation of your right-of-use assets and liabilities, including new leases, expiring leases, CPI payment increases, exercising lease options, and changes to the scope of a lease.  

Visual Lease’s lease accounting and lease administration system allows you to create critical date alerts, which gives you greater control over meeting deadlines, and ensures the accounting team is involved in and informed of important financial decisions. Plus, the system provides tools that automate remeasurement and changes to lease accounting calculations.

Eliminate wasted spending on leases

If you are not tracking all the details of your real estate leases, it’s just about impossible to avoid wasting money. Chances are, you’re paying for things that are not your responsibility. You may be paying the wrong amounts for variable rents and expenses. In fact, we find that many organizations are still paying for leases that expired years ago.

Even worse, you could be missing critical lease notification dates, including required renewal and exit notifications. Missing these dates can mean greatly increasing the cost of leasing space for years to come. We’re not talking about small change: just one mistake can cost you millions.

Lease accounting and lease administration software: the synergy you need for compliance and beyond

For organizations that must comply with new accounting regulations, having integrated lease administration and lease accounting functionality is not only smart, it’s essential. Maintaining compliance requires synergy between accounting teams and other groups that manage and negotiate leases.

A single, cross-functional lease system (like Visual Lease) provides the means to both manage your lease portfolio on a day-to-day basis and also generate the disclosure information you need to comply with ASC 842 and IFRS 16 for all types of leases. You can be sure your lease data is always accurate and current, and everyone involved is kept in the loop.

Learn about end-to-end lease administration and lease accounting software solutions

The deadline for compliance with the new lease accounting standards is quickly approaching. Now is the time to identify the long-term solution your organization needs for both lease accounting and lease administration. It’s a high-stakes decision, and you’ll want to work with experts who can guide you through a new and complex process.

Visual Lease provides both lease accounting and lease administration software in one robust solution that is trusted by 400+ organizations globally.

To learn more about the full benefits of an integrated lease accounting and lease administration solution, download our white paper: Lease Accounting and Lease Administration Software: Why You Need Both. This paper provides valuable advice for implementing the lease accounting changes and ensuring compliance, including three factors every company must consider.

Ready to learn more about Visual Lease? Schedule a live demo to see for yourself how your organization can benefit from an integrated lease accounting and lease administration solution.