Published on December 20th, 2022 | by Bibhuranjan0
10 Benefits of Lease Accounting Apps
Due to the fast-paced business environment and limited financial resources, businesses increasingly rely on leases. The car lease industry alone is expected to grow at a CAGR of 6.9% to $131.10 billion by 2029.
Managing operational and financial leases can be challenging for enterprises handling a large volume of leases, especially after new standards have been implemented. Aside from the intricacy and time-consuming aspect of applying the new standard, manually managing a lot of paperwork or spreadsheets has become a cumbersome task for both management and employees. This is where lease accounting apps benefit compliance firms and enterprises.
Organizations benefit from information systems by reducing operational costs, automating labor-intensive mundane processes, and increasing workplace productivity. However, lease accounting apps provide firms with actionable insights into finance and operating leases and compliance with GAAP accounting rules. Before we unveil its far-reaching benefits for organizations, let’s begin by understanding a lease accounting app.
What is a Lease Accounting App?
Smartphone usage has skyrocketed in recent years, both domestically and professionally. Mobile applications have virtually replaced conventional desktop applications – even in the finance industry. Popular lease accounting app for mobile devices like LeaseAccelerator is powered with advanced features to help lessors handle all aspects of their leased assets. These include lease portfolio management, amortization scheduling, budgeting, forecasting, financial reporting, and payments. It also complies with lease standards such as ASC 842, GASB 87, GASB 96, SFFAS 54, and IFRS 16.
LeaseAccelerator can effectively manage more leases and mitigate financial risks associated with lease portfolios. Before downloading, you can get a demo of LeaseAccelerator and explore the amazing features it offers for businesses.
Benefits of a Lease Accounting App
Lease accounting tools such as LeaseAccelerator are extremely useful for firms that deal with a high number of leases. Here’re the top ten benefits of using a lease accounting app:
1. Accounting on the Go
A lease accounting app offers the same value and advantages as a desktop lease accounting software. However, it provides the flexibility of accessing the software on the go. All you need is a mobile device and access to the internet, and you can do anything a lease accounting software would do on a desktop PC or laptop.
Moreover, these smart apps have an easy-to-use interface to manage all your data from anywhere in the world.
2. Automated Workflows
A lease accounting app effectively transforms the conventional manual processes involved in lease acquisition and management, journal entries, and audit trails into digital processes by identifying repetitive mundane processes and automating them. The app is equipped with automated reminders and push notifications, so you don’t forget important tasks and achieve milestones easily.
3. Increased Intra-Organizational Collaboration
If you’re part of a larger firm, you may find it difficult to manage operating and finance leases. Each department has its own set of problems and challenges that require attention. Without team collaboration, manual paperwork or decentralized spreadsheets result in data inconsistency and human errors. A lease accounting app removed the obstacles of collaborating with multiple teams by providing a centralized platform with easy access to required documents and procedures. Your staff can easily collaborate and produce a chart of accounts that is accessible to everyone and adheres to standard protocols. Lease accounting apps deliver up-to-date information consistently to all concerned departments, ensure smooth workflow, and increase inter-organizational communication.
4. Better Vendor Relationships
As the company grows and expands its leased assets, it needs to meet the growing challenges of keeping track of vendors and contracts. Lease accounting apps can provide greater insight into all company interactions with vendors through reports, notifications, and contract tracking. Automating the entire lease accounting procedure helps managers and concerned staff to focus on more productive tasks. This way, managers can easily track and manage all lease contracts. When your team focuses more on who you deal with, they can develop stronger relationships with multiple vendors.
5. Make Informed Decision
When you don’t have quick access to required data, you may be unable to respond promptly to better lease choices and new possibilities. A lease accounting app provides quick access to all the required financial and lease information and up-to-date data to develop quick projections and assess the feasibility of lease choices. With accurate and updated information available, it’s easier for decision-makers to foresee requirements and make informed and smart investment decisions related to new or ongoing leases. Moreover, you can negotiate leases whenever a good chance arises, eventually improving your company’s financial performance and mitigating risks associated with long-term leases.
6. Improved Budgeting and Forecasting
A lease accounting app centralizes massive amounts of lease data and provides deeper insights into your lease agreements and financial information. The historical data and new data patterns allow you to forecast the financial consequences of lease choices. Automated calculations and financial reporting empower you to generate realistic budgets based on real-time expenditure and pricing data and help you improve existing budgets.
With up-to-date information on the financial state and lease feasibility, businesses can make smarter leasing decisions, draft a suitable leasing agreement, and negotiate leases based on performance.
7. Meeting Lease Renewal Deadlines on Time
Keeping up with deadlines is a critical procedure in lease activities. If you don’t keep track of payments, particularly when you have large leases to handle, you may end up with overpayment, fines, and lost or skipped payments. Concerned staff must also keep track of lease renewals and extensions within the deadline. This is where a lease accounting app comes in handy. It allows you to keep track of all the deadlines and sends push notifications and reminders when important dates approach. It also enables your company to protect resources without suffering financial loss.
8. Easy Compliance
According to the new ASC 842 lease accounting standards, your company must show all lease liabilities and right-of-use (ROU) assets on the balance sheet. This new standard’s purpose is to prevent fraud and promote information transparency. When your company is in transition, it is tough to remember every important element of leases with a manual approach.
New and improved lease accounting apps like LeaseAccelerator empower you to comply with all accounting standards, including FASB ASC 842, IFRS 16, and GASB 87, as well as FASB requirements. The automatic system can determine which leases are no longer subject to the jurisdiction. It can also show leased assets with outdated technology and those no longer in use.
9. Faster Audits
Lease audits are among the most critical processes in lease accounting. Apps like LeaseAccelerator ease this cumbersome process by instantly providing a complete trail for each lease and generating reports with a single tap on the screen. The ease of information access helps auditors retrieve relevant information from a cloud-based centralized database and speed up the audit process.
10. Easy Access to Required Information
For an automated lease accounting system to be successful, it is important to have easy access to the central data repository for evaluating, tracking, and managing all lease data from your leasing portfolio. Lease accounting apps offer a cloud-based centralized database that can be accessed from mobile devices over the internet on the go. You instantly get easy access to your lease documents, reports, contracts, and other lease paperwork. You can search for the required document without browsing the entire repository. Furthermore, using the software’s sharing tools, you can easily manage your data, collaborate with teams, and define access rights to restrict information to be accessible to concerned staff only.
Implementing a lease accounting system with the latest infrastructure and stringent network security can be challenging. However, cloud-based SaaS lease accounting apps have far-reaching benefits for firms that deal in multiple leases.
While the cumbersome, laborious tasks are automated, lease accounting apps provide greater insight into lease contracts, impending payments, lease renewals, and new lease opportunities. The benefits mentioned above will help you realize the true perks of an advanced lease accounting app and how your firm can benefit from it in the long run.
Cover Image by Pixbay