Capturing and tracking lease accounting data is one of the biggest hurdles organizations face in managing the lease lifecycle. The average S&P 500 company typically carries over $1 billion of leases on its balance sheet with 70% of leases changing each year. The lack of procedures and processes found at most organizations, alongside today’s ever-changing remote work environment, places many at risk of misstatements of leased assets, inaccurate data and incomplete financial reporting.
Without a centralized and accurate picture of leasing obligations, it is difficult to produce proper forecasts and generate accurate budgets that lead to the execution of critical business decisions. In our recent webinar, Centralizing Lease Data for Improved Analytics, Automation and Accuracy, lease solution experts detailed the criteria needed to construct a central database of leases to best enable the sustainability and optimization of a firm’s leasing portfolio. Key elements of data repository construction or Data 1.0, must entail:
- Security: The data must be secure, safe and protected.
- Accessibility: Key stakeholders need to be able to access and view the data.
- Control: With multiple parties accessing the data, controls surrounding how the data is maintained and organized is vital.
- Audit: The data needs to be auditable, making organization and transparency key.
The key benefits of centralizing data allow organizations to make better business decisions and automate the lease lifecycle for sustained compliance and optimization, which can result in a lower cost of return and improved cashflow. While some organizations have built a Data 1.0 central repository of lease data during their journey toward ASC 842 and IFRS 16 compliance, many have stalled and missed a key opportunity to take their data further by harnessing big data analytics, data mining and data portals. For any organization looking to drive future lease management success, they must focus on Data 2.0 by adding key attributes such as:
- Collaborative Tools: Ability to create and assign tasks to stakeholders.
- BI Tools: Powerful ways to organize the data and analyze the data to uncover hidden opportunities.
- AI and Decision Making: Tools that layer on intelligence to help make decisions based on existing policies.
When organizations are armed with all of their leasing data and activity in a single centralized repository that also harnesses data analytics and data mining, they can manage the full lifecycle of their leases from anywhere, automate lease accounting for improved cash flow and compliance, and drive greater business insights with quantifiable and reportable analytics.
Listen to the full webinar here: https://explore.leaseaccelerator.com/webinar-centralizing-lease-data-for-improved-analytics-automation-and-accuracy/
If you’re in a private company or government organization, you get an extra year to prepare for lease management compliance with ASC 842 and GASB 87.
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