New versions of lease management software are being released sometimes monthly causing a consistent stream of new issues like user education, data imports and basic calculation changes. This makes it especially confusing to choose and manage your lease management software.

There are many aspects to consider when it comes to lease management software. Internal decisions such as integrating with the company ERP(s) and the strategy for updating/collecting leases to balance sheet, the existence of existing lease management software (Real Estate software is common), and the number and variety of leases in the organization.

When choosing lease management software consider the following:

1. There are MANY vendors in the space and more entering every day – take time to review the options; talk to early adopters and vet the vendors.
2. Define a clear strategy for implementing third party software with your existing financial systems – this will typically involve the IT group, finance and accounting and other groups.
3. Realize that MOST vendors are just now incorporating the requirements for the lease accounting standards into their software development cycle. Look for software firms that have teamed with accounting firms to maximize the development cycles and represent the end users of the software (your teams). The more changes they have adopted already, the less modifications you will be making in your process along the way.
4. Ask vendors about their release cycles – how many new releases have happened over the last 12 months; how many are planned over the next 12 months? Are there existing user groups and are they providing feedback? Are they providing training? How is the vendor handling their changes?
5. How do the vendors import and export data out of their systems? Yes, most will say comma delimited flat files, but there is significant complexity in the lease data and how it is initially captured before the new software is selected and implemented. Ask to see a sample data export and determine the usability of the file or rework required.

Bringing in an unbiased third party or consultants experienced in this decision process can greatly maximize the results and minimize potential resource strain on people, processes and systems.

Read more about other time savings ideas on our Lease Accounting site or give us a call at 913.752.9400.

Remember to step back from compliance and along the way identify potential gains the new requirements are providing with new standards, new process and procedures, exclusion of leases not required, lease payments that are not in the contract yet paid without much review for accuracy, and the like. There are many opportunities if you are paying attention. The forest versus the trees comes to mind here.

Look for business value in non-obvious areas: tax savings, push back to leasing companies for price reductions, challenge real estate common area charges (not always spelled out in each lease).

Have someone on the team responsible for continually reviewing the leases and challenge reasons for each.  Keep track of business value ideas in a central place since there will be some great ideas found that can be used across many leases. And learn from other companies that are going through this compliance effort since they may have some great ideas as well.

This can be uncomfortable, especially in decentralized scenarios where a remote Business Unit has the autonomy to make business decisions. In these cases, this team leader can serve more as an advocate for the Business Unit and point out places where business value can be added along the way versus the whistle blower approach.

Read more about other time savings ideas on our Lease Accounting site or give us a call at 913.752.9400.

Several CFOs and Controllers don’t really understand why the FASB has gone to all these efforts. There is very little business value they can see provided to the investment community in regard to added transparency. Companies are investing in new Lease Accounting software in many cases and devoting resources (both internal and external) to change processes to accommodate the standards.

In our work and discussions with many companies both public and private a few key themes continue to rise to the surface. First, compliance for Revenue Recognition has taken longer and cost more to implement than originally expected. Next, many of the same overburdened resources in the company that helped with implementing Revenue Recognition will now be responsible for implementing Lease Accounting.  This is causing a strain on many company resources since this is all in addition to their ‘day jobs’ like SEC reporting, closing the books, accounting for taxes, running the business and the like.

We all don’t have much we can do other than supporting the compliance requirements as efficiently as possible. The most impactful support includes automating and streamlining the compliance implementation process.

Read more about other time savings ideas on our Lease Accounting site or give us a call at 913.752.9400.