In today’s environment, having a handle on your lease data is more critical than ever. Because of changes to FASB, IASB, and GASB regulations, real estate managers and other lease professionals have recently put increased focus on accounting for leases.
That’s understandable, as non-compliance carries significant risks and can lead to penalties and cause chaos down the road. Lease accounting software is designed to help you lessen those risks by offering visibility into the financial data and reports necessary to comply with accounting standards.
But lease management is an equally important function for your leasing team. Monitoring, reporting on, and optimizing real estate and equipment leases helps increase efficiencies, lower costs, and drive the most value from your real estate.
Investing in lease accounting and lease management in a single software solution allows your organization to set goals for accounting compliance while also enabling you to manage leases at both a macro and micro level. A two-pronged approach can help you attain compliance and gain a better understanding of your entire lease portfolio.
Purpose-Built Lease Management Tools
In speaking with organizations around the globe, we’ve found many businesses are still using legacy or generic tools such as spreadsheets for lease management.
But a reliance on Microsoft Excel and other spreadsheet software limits your company’s lease administration capabilities. These tools are prone to manual error, can’t scale as the business grows, and don’t have the features that automate and streamline lease administration and accounting.
Lease management software does the heavy lifting, helping you:
- Inventory your leases and put them into lease abstracts for simplified analysis
- Perform ongoing management tasks like paying invoices, determining responsibility for building and equipment maintenance, and monitoring upcoming renewal and termination dates
- Gain greater visibility into your portfolio through integration with systems such as ERPs, accounting systems, CRMs, BI tools, financial and human capital management systems, and CMMS or FM solutions
Lease Management in a Fluctuating Market
As corporate real estate occupiers focus on right-sizing their portfolios, retailers reassess store locations to better accommodate today’s shopping habits, and organizations in all industries demand facilities that meet employee and customer expectations around environmental, social, and governance (ESG) initiatives, there’s a lot of turmoil in commercial real estate.
Having a deeper and broader understanding of your lease terms and restrictions puts your company in the best position to negotiate new leases and renewals.
Take the retail industry, for example. Retail organizations repeatedly are placed in difficult situations regarding their leases primarily because of how strict lease terms are — often either tied up in over-long lease terms or facing severe penalties when trying to negotiate. As a result, they are not always able to provide their customers with the best possible shopping experience.
The same is often true for corporate entities such as legal, banking, and insurance firms, where occupiers seek more desirable offices for the hybrid workforce but are locked into long-term contracts.
With the right lease management solution, organizations can get ahead of these problems before they occur. A comprehensive solution enables project managers and lease administrators to have a broader understanding of lease terms and restrictions before signing the bottom line, putting you in the best position to succeed.
See how Banfield Pet Hospital streamlines lease administration and accounting:
One Solution for Both Lease Administration and Lease Accounting
Accruent Lx Contracts offers both lease administration and lease accounting capabilities, helping your organization manage complex real estate and equipment lease scenarios, mitigate risk, and achieve regulatory compliance.
Lx Contracts scales with you, providing a solution that grows alongside your business. From real estate portfolios to equipment and operational leases, Lx Contracts offers functionalities that span the gaps between departments and allow for a streamlined, easily attainable compliance process. Having both real estate and accounting in under one metaphorical roof brings teams together and makes processes that were once challenging simple. With Lx Contacts, your lease data is readily available and referenceable for anyone, at any time.
To see how Accruent can help with your lease management and lease accounting needs, learn more about Lx Contracts lease administration and accounting solution.