Features of Lease Accounting Software

You may be wondering, what are the key capabilities you should be looking for when making your lease accounting software selection? Some features are obvious. For example, the software needs to be able to perform the proper accounting under the new lease accounting standards (FASB ASC 842 and IFRS 16). Generating the necessary journal entries required to report your leases as assets and liabilities on your balance sheet will be most critical to supporting the standards. To arrive at the journal entries, you will need an accounting engine and a database that can store the key terms and conditions for each of your leases: base and variable rents, start and end dates, and end-of-term options. Beyond these basic features, what else should you look for in a lease accounting software application?

Read the Seven Key Features of Lease Accounting Software.

Features of Lease Administration Software

What are the key features of a lease administration software application? The answer is that it depends what type of lease administration software you are referring to. Equipment lease administration software offers features such as lease versus buy analysis, competitive bidding, and end-of-term management. Real estate lease administration software applications feature invoice-to-pay automation, critical date management, and spend analysis. There are also many common features between real estate and equipment lease administration software applications.

Learn more in this article about the 12 Key Features of Lease Administration Software.

Lease Accounting versus Lease Administration Software

To comply with the new lease accounting standards most companies will need both lease administration software and lease accounting software. Few companies, if any, have an enterprise-quality lease accounting application in place. But many companies have some, if not all, of the lease administration software they require. For example, most companies have a lease administration application in place for real estate, but few have systems installed to track IT, fleet, or other types of equipment leases.

Read the Differences Between Lease Accounting and Lease Administration Software.

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Evaluating Your Current Lease Accounting and Lease Administration Software

Before you can effectively evaluate new leasing software applications, it is important to understand the systems being used to administer and account for leases today. Most companies do not have a centralized lease accounting application. Spreadsheets have become the default application. Few companies, if any, have a single enterprise-wide lease administration system that is used across the enterprise for real estate, IT, fleet, and equipment leases.

Read the Five Steps to Assessing Your Current Lease Accounting and Lease Administration Software.

Single-Vendor versus Best-of-Breed Approach

You need both a lease accounting and a lease administration application to effectively comply with the new lease accounting standards. Should you use one vendor for both lease accounting and lease administration or should you take a best-of-breed approach? Having these two applications tightly integrated ensures that the accounting team is always aware of any new leases, modifications to existing leases, and end-of-term plans for expiring leases.

Read the Pros and Cons of a Single Vendor and Best-of-Breed Strategies.

Next: What Happens After Implementation?

Learn How You Can Start Preparing for Day Two and Beyond

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