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Lease management software is designed to streamline the process of tracking and managing leases for lessees and lessors. The type of software is designed to track all aspects of a lease, from contract details, rent & lease payments, renewals, maintenance requests, and repair history.
Lease management software offers several benefits for businesses. Too often internal accounting teams are tracking lease details in a spreadsheet or are unable to track all of the details required to make the process of adhering to compliance requirements such as IFRS 16, ASC 842 and GASB 87.
Lease management software offers businesses a centralised repository for all lease details, and the ability to track payments, schedule renewals, and send reminder notices for important dates. The software can also help businesses manage multiple leases across different properties or leased equipment.
The new IFRS 16 and ASC 842 standards require companies to treat leases as assets on their balance sheets. For accounting purposes, a lease is defined as any contract under which you give up control over or rights to use an asset in return for money, goods, services, or other benefits. Under the revised rules, if a business has control over - or the right to use - an item it is renting and receives cash in exchange for that privilege, then it is to be treated as an asset, rather than an expense. This is a significant change from previous accounting standards, which required companies to expense leases as they were incurred.
The goal of the new standards is to provide greater transparency into a company’s financial position and operating performance.
The challenge for companies is that the new standards are complex, and require businesses to track a number of new lease details including:
How Should NetSuite Users Approach Compliance?
NetSuite users are able to make the most of lease tracking software functionality on platform by implementing NetLease, by Netgain. NetLease is the most comprehensive and user-friendly lease accounting solution available on the NetSuite App Store.
The software is built on the NetSuite platform, so it integrates seamlessly with existing NetSuite processes and data. In addition, NetLease offers a number of features that make it ideal for companies looking to comply with the new standards, including:
NetLease offers a free version to manage up to 5 leases. Because it’s built on NetSuite, implementation is fast and painless, with most customers up and running in a few short weeks.
NetLease offers a number of other benefits for NetSuite users, including:
With NetLease, businesses can be confident that their lease data is accurate and up to date. The software integrates with NetSuite’s accounting, CRM, and ERP modules, so all relevant data is automatically populated in the system. This eliminates the need for manual data entry, which can lead to errors.
NetLease gives businesses a clear picture of all their lease obligations in one place. The software provides real-time visibility into upcoming payments, renewals, and other important dates. This information can be easily shared with stakeholders to keep them informed of your company’s financial commitments.
NetLease automates many of the tedious and time-consuming tasks associated with lease management, such as rent calculations, invoicing, and payments. This frees up your staff to focus on more strategic tasks that will help grow your business.
NetLease provides comprehensive reporting and analytics tools that give you valuable insights into your lease portfolio. You can easily see which leases are performing well and identify opportunities for cost savings.
NetLease's reporting and analytics tools allow you to generate real-time reports on your lease portfolio. This gives you the information you need to make informed decisions about your leases.
NetLease’s automated workflows and reporting tools help reduce the accounting and administrative costs associated with lease management. This can free up more money to invest in other areas of your business.
If your business is considering implementing lease management software, there are a few things you can do to prepare:
1. Educate yourself on the new standards
Make sure you understand the new lease accounting standards, IFRS 16 and ASC 842. These standards will have a major impact on your business, so it’s important to be familiar with them.
2. Assess your current lease portfolio
Take a close look at your current lease portfolio to identify any areas that may be affected by the new standards. This will help you determine which leases will need to be accounted for under the new standards.
3. Gather your lease data
If you don’t already have a centralised system for storing lease data, now is the time to create one. This will make it much easier to track and manage your leases.
4. Choose the right software
There are many lease management software solutions on the market. Make sure you choose a solution that is compatible with NetSuite, like Netgain and that it offers the features and functionality you need.
5. Train your staff
Once you have chosen a lease management software solution, make sure your staff is properly trained on how to use it. This will ensure that they can take full advantage of the software’s capabilities.
There are several roadblocks to overcome when moving to the new standards. However, with good preparation and execution, your company may successfully transition and reap benefits for years. You are not alone in this endeavour; rather, you have a team of professionals that will help you every step of the way.
TeamBlueSky has helped a growing number of clients to implement NetGain and automate lease accounting compliance. If you would like to learn more about how we can help your organisation, please contact TeamBlueSky today.
