A Centralized Lease Portfolio Makes Asset Management Easier
When it comes to their leasing portfolios, many companies and businesses barely treat them as assets at all. They miss payment dates and let collection dates slide, and they often fail to update the terms of their leases in the ways that are most advantageous.
These kinds of slip-ups and errors are costly, both literally and figuratively. They also often lead to reports that are inaccurate, and many times these help cause poor business decisions that could easily be fixed with a full set of facts.
But it doesn’t have to be that way. Correctly managed, the role of your leasing portfolio can be changed completely. It can go from being an ongoing, costly headache to a powerful asset management tool that can create revenue, jump start your business and help spur vital growth.
To do all of that, though, you need the right tool. Specifically, you need a top-shelf lease portfolio management software package with state-of-the-art features that are powerful and easy to use, and you have to know how to implement them.
With that in mind, let’s talk about what this kind of package can do for you. Specifically, we’ll review the benefits that a centralized lease can bring to your business with the right software, and what you’ll need to do to get to that level of centralization.
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The Compliance Conundrum
Let’s talk about basic compliance. It’s certainly not the sexiest subject when it comes to the potential of a centralized leasing portfolio, but it is very relevant, largely due to ASC 8042, the accounting standards change that was mandated by the Federal Accounting and Standards Board (FASB) last year.
That change sent many companies scrambling, and some haven’t caught up. They’re still having problems with changes in the definitions of different kinds of leases, not to mention what has to be listed on the balance sheets now, and how it impacts their financial statements.
But there is a quick way to catch up. The right accounting lease management package can help you get all your leases in the right categories, and once you implement the kind of automation this software provides, you’ll have all the data you need to fix and update your balance sheet right at your fingertips.
But you’ll get a lot more than that. Centralizing your lease portfolio will allow you to quickly implement the new best practices that follow ASC 842, which will mean your business is operating efficiently and effectively when it comes to compliance.
You’ll also get the ability to analyze both the structure of your leases and the data they contain, which will be beyond valuable going forward as you implement your new best practices.
Moreover, you’ll get an audit trail to make sure problems don’t occur again. And you won’t have to spend weeks or months doing this—this kind of software is very easy to learn, and in many case you’ll be able to see significant improvements within days.
Asset Management and Cost Control
Now let’s talk about cost control. Once again, it’s not the sexiest subject when it comes to your leasing portfolio, but there’s no doubt about how important it is when it comes to the impact on your bottom line.
If you’ve been making errors and inadvertently using inaccurate reports to make leasing and business decisions, you probably already have some idea of what those issues are costing you.
A centralized leasing portfolio can eliminate those problems. How? If you’ve got leases pertaining to your facilities, for instance, you’ll be able to see exactly what you’re getting billed for, and lease management software will also allow you to go over any other facility-related expenses that may be on the books without you even knowing about them.
The same kinds of problems and issues can also be happening with the ongoing changes in your leases, and once again you may not even be aware of what’s basically happening behind your back.
If you have changes that aren’t being updated accurately, that can back up into every business decision you make, often with disastrous consequences.
The right leasing management software will change that in a hurry, however. Each change you make will automatically come with adjustments throughout your portfolio, so you’ll be getting accurate, up to date information within seconds.
Now let’s back up and consider cost control again. The simple fact is that the same kinds of cost control issues can happen with your equipment leases, too. Many companies don’t even know what they have, where it’s located and what changes are being made in their leases without them even knowing about it.
Once they implement lease management software, though, they get a complete, immediate picture of the expenses associated with their equipment leases, which means they can cut costs, update obsolete equipment, and make purchases that are precise and measured when it comes to meeting their current needs.
Cost control applies to procedures, too, and not just with reference to ASC 842. Many companies have different sets of procedures regarding their leasing portfolio that are completely at odds with one another, and when that happens costs can quickly spiral out of control, often in ways that are hidden and difficult to detect.
Lease management software changes that completely. Once you can see the big picture, you can implement best practices that are consistent across your business, and your lease management package can made sure those best practices are adhered to and maintained.
What's Next?
If you like what you’ve been reading about how lease management can centralize your portfolio to manage your assets, there’s a simple way to get in on the action.
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The iLeasePro Solution
If you are interested in features discussed above becoming part of your lease management software, or if you would like to learn more about iLeasePro, we would be happy to show you what our software can do. Get in touch with us to book a demo with one of our lease management experts.
With iLeasePro, managing your leases is easy. Stay compliant with the latest accounting standards and save time with our highly efficient, user-friendly solution. Don't wait, contact us today to book a demo.