Lease accounting has always represented a challenging industry and transparency is now more important than ever before. While this is excellent news for the market sector as a whole, novel challenges have also arisen. The introduction of recent regulations (including ASC 842 and IFRS 16) make it even more important to address potential compliance issues and firms may have difficulty when proactively implementing such protocols. This is why selecting the most appropriate third-party software solution represents an invaluable opportunity.
The Vital Role of Lease Data Management
There are three primary reasons why this type of oversight is critical:
- To reduce risk.
- To comply with ongoing regulatory requirements.
- To maximise revenue generation.
While this may be feasible for smaller enterprises (such as local rental firms), the came cannot be said when referring to larger companies or franchised organisations. Common issues such as a lack of centralisation, inadequate CRM systems, fragmented data, and poorly executed lease modifications can quickly take a toll on operations as well as customer satisfaction. This is why outsourcing these and other practical concerns to the team at FMIS often represents the most practical solution.
Efficiency and Compliance: Bespoke Software Solutions
Our professionals have developed proprietary software solutions that are intended to take the guesswork out of lease oversight. Having said this, the associated options go far beyond mere IFRS 16/ASC 842 compliance. Modern strategies must also take efficiency and accuracy into account. Benefits include automated reporting tools (including those associated with right-of-use assets), real-time pipeline monitoring, lifecycle tracking, end-of-lease reports, and the ability to enact bulk lease modifications when required.
Integration is just as important in terms of overall functionality and unfortunately, not all software platforms offer such streamlined solutions. We have therefore designed our systems so that they are fully compatible with in-house systems such as standard Excel spreadsheets and existing ERP software. The main takeaway point here is that migrating to a new platform does not necessarily have to represent a complicated process. Companies can therefore enjoy a seamless transition in order to meet their ongoing workflow obligations.
Selecting the Most Appropriate Software Package
It is critical to remember that any cutting-edge lease accounting solution also represents a real-world investment. These systems should therefore be capable of meeting present and future compliance requirements in order to ensure a higher return on investment (ROI). Furthermore, quality software packages share a number of additional features in common including:
- Scalability and an agile framework.
- Customisation options to address various configurations.
- Ease of use and intuitive implementation.
- Targeted customer support solutions.
- A list of case studies to illustrate transparency and reliability.
While cost is always a practical concern, we need to remember that the up-front price of this software will inevitably be offset by ensured compliance, enhanced efficiency and user-friendly operations. These features simply cannot be guaranteed by out-of-the-box solutions or generic accounting bundles.
The Future of Lease Accounting
There is little doubt that modern lease accounting will rely even more heavily upon the digital domain in the near future. Whether referring to compliance requirements, ROI or strategic financial management oversight, it always pays to work smart as opposed to hard.
