Why Lessor Accounting Software Matters for Business Growth

Introduction: A Changing Landscape for Lessors

Leasing has become a balancing act. Balancing across managing risk, customer experience, organizational profitability, and regulatory compliance. Regulations have become more stringent and complex over time. IFRS 16 and ASC 842 are examples of compliance regulations. Globally, the trend is moving towards automated regulatory filing and real-time compliance. Errors resulting in compliance breaches impact reputation and carry fines and penalties.

Lessor accounting software is a must-have tool. It helps in the back office and compliance. Automating manual tasks could be the cause of errors. Manage complex and diverse portfolios and compliance. Enhance your organization’s performance with data-driven insights for better decision-making.

Understanding Lessor Accounting Software

Managing the lease life cycle is core to lease accounting software. Generic accounting systems do not meet the needs of lessors. They also require contract management, compliance tracking, financial reporting, and portfolio analysis.

Now, lessors can consolidate their operations. They can reconcile multiple manual sources to provide a consolidated picture. Centralized platforms to generate real-time insights. Improve accuracy and quickly respond to external parties like regulators, auditors, and customers.

The Complexity of Lease Management

Leasing requires managing the obligations, rights, and risks in the underlying agreement. It is not limited to sending invoices and receiving payments every month. Some complexities are:

• Regulatory compliance based on current rules in force, like IFRS 16 and ASC 842.

• Financial reporting meeting auditor scrutiny with timely and accurate record keeping.

• Data management is enhanced due to larger and more complex portfolios.

• Data retention regulations for each jurisdiction.

• Risk management for managing customer credit, asset obsolescence, and market changes.

• Real-time insights on the portfolio provide tools for risk management.

With growing portfolios, asset types, and geographic coverage, these challenges grow. Using the right tools to manage leasing portfolios is critical to support your teams.

The Strategic Benefits of Lessor Accounting Software

Let us explore the value of lessor accounting software.

• Compliance: Lessor accounting software recalculates the impact on income and the balance sheet. Compliance with accounting and related regulations is automatic.

• Traceability: Needed for reconciliations and audits is available at any time.

• Efficiency Automation: Allows lessors to focus on value-added activities. Functions that can be automated are data entry, revenue recognition, and contract updates. Users can support their customers to generate more business.

• Insights: Real-time access to portfolio data. KPIs allow executives to manage their portfolio. Identifying underperforming contracts, delinquent accounts, and asset usage improves profitability. Reactive crisis management is expensive and is not appreciated by customers.

Key Features that Matter Most

Some features that lessors value are:

• Integration: Most lessors need to work with multiple solutions. The ability to integrate is critical for managing the entire lease lifecycle.

• Analytics: Real-time analytics to manage risk is very important to lessors.

• Accounting: Automated accounting frees up team members to focus on value-added work. This also helps lessors manage compliance and regulatory reporting.

• Automation: Putting guardrails for users to perform their functions correctly is through automation. This saves time and cost, minimizing manual errors.

• Usability: Simple and modern usability allows lessors to retain their employees longer. Team members desire to work on current standards and technologies.

The Evolution of Lessor Software: Emerging Trends

Some technology trends that are impacting the leasing ecosystem:

• Cloud Solutions: Scalability, automated updates, and lower upfront costs are inherent.

• Artificial Intelligence: Enhances the ability to predict what could happen in the future.

• Mobile: Makes information available on the go, when and where you want it.

The Bigger Picture: From Administration to Strategy

Lessors need to take a strategic view of the lessor accounting software they select. It should support their strategic objectives:

• Better engagement with customers

• Support new products

• Get into new markets

While time and cost of implementation are very important, lessors need tools that will help them streamline operations, remain compliant, and evolve.

Conclusion

Complex leasing is difficult to manage with manual controls or disconnected systems. Lessor accounting software is the tool to ensure compliance and support growth. Introduction of new products and expansion to new markets. Lessors need solutions to build relationships with customers, vendors, and other business partners.