By LeaseCrunch® on April 28, 2023 at 10:28 AM
You’ve probably heard a lot about spreadsheets in relation to lease accounting. Perhaps after your first audit with the new lease standards, you’re all too familiar with how “well” they work.
Unfortunately, some misguided advice suggests spreadsheets are a viable solution for a small number of leases. This couldn’t be further from the truth.
Although it may appear as a cost-effective approach to manage a small number of leases, we encourage you to consider the expense of building and maintaining these workbooks. In addition to your team’s hourly wages, costs are associated with auditing and potentially rectifying errors, significantly increasing the cost. Therefore, when evaluating this supposedly “free” alternative, keep in mind the expenses that come along with it:
- The time to build the spreadsheet and the complex calculations.
- The time it takes to verify existing data.
- The time to revise leases if contracts change.
- The additional audit fees to correct your spreadsheet.
- The price to continue to maintain that spreadsheet year after year.
After considering these factors, it’s clear spreadsheets are not the most cost-effective or practical solution. Instead, consider lease accounting software. With the right software, you and your team will increase productivity, reduce errors, and see a positive return on your investment.
Ready to take a look at the software?
When you’re ready to explore software solutions, weighing your options is essential. A full lease management solution may not be necessary depending on the number of leases, but additional features and functionality could streamline internal processes. Create a plan to review all solutions.
Here are some tips to keep in mind:
Pricing – Although you’ve used the “free” option, software doesn’t have to be expensive. Check the pricing models for each solution. Look for a vendor that doesn’t have implementation fees, support fees, or other hidden costs.
Functionality – While spreadsheets seem like an easy solution, software with a simple user interface and a streamlined process can be just as easy to use. Leases should take minutes to enter into your chosen software, and any revisions should be able to be made without hassle.
Access Control – Maintaining version control in spreadsheets can be difficult, especially with multiple contributors. Find a solution that provides an audit trail that allows for the separation of those with full access roles and view-only roles.
Reporting – Reporting is the most powerful part of any lease accounting software, particularly for audits. Software output should not only be verifiable and accurate but should be easy to export.
If you’re interested in exploring a software solution, contact us today.