The best lease accounting software will help you effectively identify, manage and reduce any financial risks associated with your lease portfolios by: automating your processes, helping you keep track of journal entries, helping you track audit trails and more. When it comes to finding the best lease accounting software, you will want a tool that: Integrates easily with your existing tools and systems, including your ERP, your existing POS and your accounting systems Is verified as a compliant solution for handling regulations – like ASC 842, IFRS 16 and GASB 87 – complete with reporting and ERP integration Does not carry the risk of a failed implementation, which can cost time and money Guarantees accurate lease abstraction Offers ongoing product support and innovation, including ongoing training for employees Will not be siloed
Lease Accounting Software
Lease accounting software provides the functionalities necessary to maintain compliance with financial reporting standards like ASC 842, IFRS 16 and GASB 87.
What is Lease Accounting Software?
Lease accounting software is a system that allows for the storage, management, access and tracking of lease accounting information across an organization. The right lease accounting software will include the functionalities necessary to maintain compliance with financial reporting standards for lease contracts, including the FASB standard ASC 842, IFRS 16, GASB 87 and more.
Lease Accounting Software for ASC 842, IFRS 16 and GASB 87 Compliance
Accruent's lease accounting software, Lucernex, helps ensure compliance is achieved and maintained for current and upcoming lease accounting standards, including:
ASC 842 went into effect in 2019 for most public companies to close the loophole that allowed corporations to hide assets and liabilities off their balance sheet. Among other things, ASC 842 requires that most leases need to be recorded and capitalized on the balance sheet.
IFRS 16, the latest IASB lease accounting standard, went into effect in 2019. The new standard changed how leases are reported, eliminated many operating leases and required that most leases be capitalized and reported on balance sheets.
GASB 87 is the latest Governmental Accounting Standards Board (GASB) lease accounting standard. It went into effect for most U.S. states and local government agencies in 2019, and it changed how leases are reported, eliminated most non-capitalized leases and required that leases be capitalized and recorded on balance sheets.
Benefits of Lease Accounting Software
Achieve Ongoing Compliance with Changing Standards
It can be difficult to maintain compliance with standards like ASC 842, IFRS 16 and GASB 87 – especially as these requirements continue to change over time. Lucernex has had a 100% success rate getting clients into compliance, which means you’ll never risk a failed implementation or falling out of compliance.
Lucernex also provides audit logs that assist organizations leveraging the solution to achieve SOX compliance and it is SOC 1 and SOC 2 compliant.
Using Lucernex lease accounting software, all relevant personnel have access to important information, including your portfolio of leases, related documents, contracts and more.
You can also use the tool to:
Set permissions based on employee role or other criteria
Create alerts to remember important dates or let employees know if a document is ready for review
Search documents to quickly find the information you need
Get Stronger Data Security
Data security is extremely important, as a cybersecurity breach could compromise your important financial information. Lucernex accounting software and permissions provide more robust data security than you would find using Excel or other stand-alone tools. This includes:
Encryption: AES-256, TLS 1.2
Dynamic application security testing
Authentication - SAML 2.0, JWT
Role-based access controls
Reduce User Error
Using tools like Excel or Google Sheets, it’s easy to make mistakes and miss renewal dates, miscommunicate or fail to meet data requirements. The right lease accounting software will reduce this kind of user error, thereby facilitating compliance and reducing costs over time.
Features of Lease Accounting Software
Better Forecasting Capabilities
With Lucernex’s robust reporting and analytics, your organization can gain comprehensive visibility into insights that you’ll need to effectively forecast, budget and allocate funds. This can avoid the need for multiple systems or manual reporting.
Improved Lease Management Communication
Using a centralized lease management and lease accounting software, you can streamline processes and proactively resolve errors before they become significant concerns.
Audit-Ready Monthly Close
Features like automated reporting, cause of change reports, and comprehensive data integrations simplify the monthly close process.
Comprehensive Integrations and Centralized Data
Lucernex can integrate via flat file secure transfers or by REST API to a variety of systems to help you maintain compliance and generate comprehensive insights. These include:
ERPs like Oracle and SAP
Financial management systems
Human capital management systems
CMMS or FM solutions
Automatic Compliance with Lease Accounting Standards
Lucernex is verified as a compliant solution by a leading independent 3rd party accounting firm, meaning that you’ll always be compliant with ASC 842, IFRS 16 and GASB 87 standards (any any upcoming standards) using Lucernex. This guaranteed compliance means you will never have to worry about audit risk or compliance concerns.
How to Find the Best Lease Accounting Software for Your Business?
There's a lot that goes into choosing a lease accounting software for your business: you have to convince key stakeholders, make sure the software will support your business as you scale and choose a solution that will support complex, ever-changing standards. Here are some things to keep in mind:
Evaluate All Functionalities
Often, organizations choose the lease accounting software with the lowest up-front cost. However, there are other key factors to keep in mind here, including:
- The risk of failed implementation: Does the software you choose have a proven track record?
- Data accuracy: Does the solution provide the lease abstraction expertise and accurate data entry needed to facilitate compliance and ensure accurate reporting?
- Ease-of-use: How difficult will set-up be for your team? Does the tool offer the customization you will require?
Read the Brochure to learn more about Lucernex functionalities.
Take Time to Do Your Research
Don’t make a rushed decision. Take your time to view demos, compare features and talk to your team about have-to-have features and capabilities.
Then, take your time to enter your data properly. Expecting this time commitment will help you set expectations and avoid implementation mistakes.
Features to Look for When Comparing Lease Accounting Software
Comprehensive Ongoing Support
The vendor’s support staff should be able to provide you with ongoing product training, technical support and full customer support. Accruent global support team offers free superclass training, a proven certification training curriculum and a robust user network.
The Right Automations and Functionalities for Your Business
The lease accounting software you choose should facilitate compliance both out of the box and in the long term. Ask your potential vendors:
- If reports will be formatted in compliance with the standard’s disclosure requirements
- If their software will send automatic alerts when it’s time to renew
- If the software can guarantee compliance as financial reporting requirements change
- If comprehensive reporting capabilities are offered for long-term compliance tracking
After the initial sale, many vendors do not offer product enhancements and innovations, so their products quickly become dated. Look for a lease accounting software company that continuously enhances its offerings based on feedback and market trends. In the same vein, make sure that the solution you choose is not siloed and that it will offer the continued functionality and integrations you will need down the line.
SOC Report Compliance
System and Organization Controls (SOC) reports are reports issued by third-party CPAs that help establish credibility of service providers. They establish credibility based on five categories: security, availability, processing integrity, confidentiality and privacy.
There are three types of SOC reports, though SOC type 1 and SOC type 2 are most relevant for lease accounting software.
You will want to make sure that your provider is compliant with SOC 1 and SOC 2 so you can be sure you’re working with a trustworthy software.
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