Maximizing Lease Performance: The Role of Lease Tracking and Management Solutions
Leases are part of life for most businesses. Whether you are leasing real estate, commercial real estate, vehicles, or equipment, leases need to be managed by someone within your organization.
If you have a large leasing portfolio or you’re making a significant investment in your leases, you already know that effective lease tracking is an essential part of your business.
But you need great lease tracking software to do it. Software that can help you make sense of all of the data, put it in one place for central access and generate reports that lead to good business decisions by managers and executives.
There’s a lot that goes into this, so let’s take a look at what’s involved in lease tracking software.
What is Lease Tracking Software?
Definition-wise, lease tracking software is a software package or a suite of modules that document all the leases in a company and all the transactions that are part of those leases.
Some companies use the term “lease tracking software” synonymously with lease management software, but the latter implies the ability to perform some higher-level functions, so we’ll stick with lease tracking software for purposes of clarity.
Purpose of Lease Tracking Software
The primary purpose of lease tracking software is to ensure accurate and up-to-date information about leases within an organization. It offers features that facilitate data entry, retrieval, and reporting for leases. By maintaining a centralized repository of lease data, the software enables easy access to lease information and helps in generating reports, tracking lease performance, and making informed business decisions.
Lease Tracking Software Functionality
Lease tracking software often includes functionalities such as lease document management, payment tracking, notifications for critical dates and renewals, calculation of financial metrics, and integration with accounting systems. It may also provide customization options to cater to specific lease types and industries.
Lease Management Made Simple
Although lease tracking software primarily focuses on the tracking aspect of leases, it forms an integral part of overall lease management processes. By providing accurate and accessible lease data, it supports higher-level functions such as lease administration, lease accounting, portfolio analysis, and compliance with accounting standards.
Lease tracking software serves as a central hub for managing and organizing lease information, ensuring that businesses have a comprehensive view of their lease portfolio and enabling efficient tracking of lease-related transactions and activities.
Why Lease Tracking Software is Important
For most companies, the transactions performed by the leases in their portfolio are critical to success. Just to cite one example, missed payments can be costly, both in the moment and down the line.
They can also void the terms of an advantageous lease, so it’s important to stay on top of them and understand how well your individual leases are performing as assets.
Preventing Missed Payments
When a lease payment is missed, it not only disrupts cash flow but can also lead to penalties, late fees, and even legal complications. Furthermore, consistent failure to make payments could potentially result in default, leading to the termination of the lease agreement altogether. This can be particularly detrimental if the lease terms were advantageous or provided essential resources for business operations.
Keeping Finances Organized
By using lease tracking software, companies can effectively monitor and manage their lease payments. The software typically includes features that allow for tracking payment due dates, sending reminders, and generating reports to assess payment history and trends. This level of oversight ensures that companies stay on top of their financial obligations, avoid missed payments, and maintain positive relationships with lessors.
Additionally, lease tracking software helps businesses evaluate the performance of individual leases as assets. Each lease represents an investment for the company, whether it involves real estate, commercial real estate, vehicles, or equipment. Monitoring the performance of these assets is crucial for making informed business decisions and optimizing resource allocation.
Lease Data At Your Fingertips
Lease tracking software enables businesses to gather comprehensive data about each lease, including lease terms, rental rates, maintenance costs, and any additional expenses. This data can be used to assess the profitability and efficiency of each lease, identify underperforming assets, and make informed decisions about lease renewals, terminations, or negotiations.
By leveraging lease tracking software, companies gain valuable insights into their lease portfolio. They can identify trends, analyze financial performance, and determine the overall impact of leases on their bottom line. This information empowers businesses to optimize their leasing strategies, negotiate favorable terms, and ensure that leases continue to align with their operational and financial goals.
Lease tracking software is essential for companies to effectively manage lease transactions and assess the performance of their lease assets. By staying on top of payments and understanding the financial implications of leases, businesses can mitigate risks, optimize resources, and make informed decisions that positively impact their operations and financial health.
Lease Tracking & Accounting Software and Accounting Standards
There are several accounting standards that apply to leases, and lease tracking software helps companies stay in compliance with all of them. Here are just a few of the standards that may apply to a specific lease:
- GASB: stands for Government Accounting Standards Board, and it applies to any leases that include government contracts. Lease tracking software helps companies with government leases by providing functionalities that align with GASB requirements. It ensures accurate recording and reporting of lease transactions related to government contracts.
- FASB: The standards specified by the Financial Accounting Standards Board apply to public and private companies in the US, along with nonprofits. Lease tracking software helps companies comply with FASB standards by facilitating the appropriate recording and classification of leases, calculating lease payments, and generating financial reports in accordance with
- IASB: For companies that do business abroad, staying in compliance with the standards set by the International Accounting Standards Board is crucial. Lease tracking software assists such companies in aligning their lease accounting practices with IASB requirements. It enables accurate measurement and reporting of lease obligations, ensuring consistency with international accounting standards.
- ASC 842: This standard replaced ASC 840 in December of 2021, and it redefined some of the nomenclatures for leasing in ways that are reflected on a company’s balance sheet. Lease tracking software is essential in ensuring compliance with ASC 842 by providing the necessary tools to handle lease calculations, track lease terms and payments, generate accurate financial reports, and meet disclosure requirements.
It’s vital to have lease accounting software that can keep up with the calculations and transactions in a way that’s compliant with ASC 842.
Lease accounting software, integrated with lease tracking functionality, is vital in meeting the requirements of these accounting standards. It automates lease accounting processes, calculates lease-related financial metrics, maintains an accurate lease ledger, and generates financial reports in accordance with the specific guidelines of each accounting standard. By leveraging lease accounting software, companies can ensure accurate and compliant lease accounting practices and mitigate the risk of financial misstatements or non-compliance with accounting standards.
ComplianceLease tracking software is crucial for companies to stay in compliance with accounting standards such as GASB, FASB, IASB, and ASC 842. It provides the necessary functionalities to accurately track, record, and report lease transactions in accordance with these standards. By utilizing lease tracking software that aligns with accounting requirements, companies can maintain accurate financial records and fulfill their obligations under the applicable accounting standards.
Lease Tracking Software and Embedded Leases
Some leases are contained as part of broader contracts. These are known as embedded leases, and you have to have lease tracking software that can record transactions in these leases and add them to existing lease data.
Lease tracking software plays a crucial role in managing embedded leases, which are leases that are contained within broader contracts or agreements. These embedded leases can exist in various forms, such as lease components within service agreements, supply contracts, or construction contracts.
Embedded leases pose unique challenges for lease management because they are not standalone lease agreements but rather elements embedded within larger contractual arrangements. Lease tracking software is specifically designed to handle these complexities and effectively manage the lease transactions associated with embedded leases.
One of the key functions of lease tracking software is its ability to identify and isolate embedded leases within broader contracts. It uses advanced algorithms and parsing techniques to extract lease-specific information from complex contractual documents. By doing so, the software can accurately capture and record the lease terms, lease payments, and other relevant data associated with the embedded leases.
Once the embedded leases are identified and recorded, lease tracking software seamlessly integrates them with existing lease data. This ensures that all lease-related transactions, regardless of whether they are standalone leases or embedded leases, are properly tracked, monitored, and reported.
By capturing the transactions related to embedded leases, lease tracking software provides a comprehensive view of the entire lease portfolio. It allows companies to understand the full extent of their lease obligations and financial commitments, including those embedded within larger contracts. This holistic view enables better decision-making, risk assessment, and financial planning related to embedded leases.
Furthermore, lease tracking software ensures compliance with accounting standards, such as ASC 842 or IFRS 16, which require companies to account for embedded leases separately. The software incorporates the necessary accounting calculations and reporting features to accurately reflect the financial impact of embedded leases in financial statements and disclosures.
Lease tracking software is equipped to handle the intricacies of embedded leases. It can identify, isolate, and record transactions related to embedded leases within broader contracts. By integrating these transactions with existing lease data, lease tracking software provides a comprehensive view of the entire lease portfolio and facilitates compliance with accounting standards. This functionality is essential for companies to effectively manage embedded leases, gain transparency into their lease obligations, and ensure accurate financial reporting.
Lease Management Software and Specific Tracking
For managers and executives, here’s some of the specific information they need from their lease tracking software.
Lease tracking software plays a crucial role in managing embedded leases, which are leases that are part of broader contracts. These embedded leases require lease tracking software capable of recording transactions specific to these leases and integrating them seamlessly with existing lease data.
It’s important to have each and every lease transaction recorded, and it has to be available in a way that’s both searchable and shareable.
One of the key aspects that managers and executives rely on in lease tracking software is documentation. It is essential to have a comprehensive record of each lease transaction, and the software should provide a searchable and shareable database of lease information. This ensures that all lease-related activities, such as rent payments, lease modifications, and lease renewals, are accurately documented and easily accessible.
Audit Functions and Asset Management
Creating an audit trail is important for every company, both internally and externally, and a comprehensive lease tracking software package can do this and make any data that’s necessary for an audit instantly available.
Audit functions and asset management are vital components of lease tracking software. Companies need to create an audit trail for lease-related activities, both for internal purposes and external audits. A robust lease tracking software package facilitates the creation of an audit trail by capturing and storing all relevant data related to lease transactions. This ensures transparency, accuracy, and accountability, making necessary information readily available during audits.
Different Rules for Different Leases
The specific rules for transactions are different for certain types of leases, and lease tracking software helps companies keep up with these rules. It also standardizes the data that’s collected so it can be included in reports and easily understood.
Different types of leases often have specific rules and regulations governing their transactions. Lease tracking software helps companies stay compliant with these rules by providing functionalities tailored to various lease types. It ensures that lease-specific rules are accurately applied to transactions, eliminating the risk of non-compliance. Additionally, the software standardizes the collected data, making it easier to include in reports and understand the financial implications of different leases consistently.
By incorporating these features, lease tracking software streamlines the process of managing embedded leases. It provides a centralized platform for recording and tracking lease transactions, maintaining proper documentation, ensuring compliance, and generating reports. This level of specificity and standardization enhances efficiency, accuracy, and transparency in lease management processes.
Lease tracking software is essential for effectively managing embedded leases. It enables companies to accurately record lease transactions, provides audit trail functionalities, and ensures compliance with specific lease rules. By standardizing data and offering comprehensive documentation, the software simplifies lease management and facilitates better decision-making for managers and executives.
What Problems Does Lease Tracking Software Solve?
Information Searches, Accounting Software and Lease Management
Lease tracking software addresses several problems that companies commonly encounter in lease management processes.
Information Searches, Accounting Software and Lease Management
Studies have shown that employees typically spend over two hours a day searching for documents and files they need to do their jobs, and that number usually goes up during auditing season. Lease tracking software can lower that time, streamline the information-finding process and make important information available instantly. This can help your business and employees have higher productivity.
Lease tracking software reduces the time employees spend searching for lease-related documents and files. Studies have shown that employees can spend a significant amount of time each day searching for information they need to perform their jobs. During auditing seasons, this time increases further. Lease tracking software streamlines the information-finding process by centralizing lease data and providing quick and easy access to relevant information. This saves time, improves productivity, and ensures that employees can retrieve lease-related information instantly.
A Lease Tracking Software System Prevents Data Errors
Employees make mistakes, and when they’re not caught in a timely fashion they can be costly. These include erroneous calculations, multiple entries of the same data, mismatched spreadsheets, and so on.
Lease tracking software is specifically designed to keep that from happening, and it does so instantly so that unnecessary extra costs can be avoided.
Another problem that lease tracking software solves is the prevention of data errors. Human errors such as erroneous calculations, duplicate data entries, and mismatched spreadsheets can have costly consequences if not caught in a timely manner. Lease tracking software is specifically designed to minimize these errors. It automates calculations, eliminates duplicate entries, and ensures data consistency across the system. By doing so, it helps companies avoid unnecessary costs and maintain accurate and reliable lease data.
Centralizing Stored Lease Information
Many companies have decentralized operations with offices both domestically and abroad, which makes it harder to have important data available instantaneously. Lease tracking software is designed to do just that, which helps them operate far more efficiently.
Many companies have decentralized operations with offices in various locations, both domestically and internationally. This decentralization can make it challenging to have important lease data available instantaneously. Lease tracking software resolves this problem by centralizing stored lease information. It provides a unified platform where all lease-related data is stored and accessible from anywhere. This centralized approach enhances operational efficiency, facilitates collaboration among teams, and ensures that lease information is readily available when needed.
Lease Consolidation and Lease Accounting and Tracking
For companies with a large lease portfolio, the question “Do you know where your leases are?” isn’t just an irreverent, off-the-cuff question. In many cases, lease tracking software can consolidate a large lease portfolio into a single summary that includes both lease-specific and overall ROI, which is invaluable.
For companies with a large lease portfolio, lease tracking software addresses the challenge of lease consolidation and tracking. Managing numerous leases can be complex, and it's crucial to have a clear overview of the entire portfolio. Lease tracking software can consolidate a large lease portfolio into a single summary that includes lease-specific details and provides an overview of the overall return on investment (ROI). This consolidation simplifies lease management system, facilitates decision-making, and allows companies to have a comprehensive understanding of their lease portfolio's performance.
Lease tracking software solves problems related to information searches, data errors, decentralization of lease information, and lease consolidation. It improves efficiency by reducing search times, prevents costly data errors, centralizes lease information, and provides a comprehensive view of the lease portfolio. By addressing these challenges, lease tracking software enhances lease management system processes and enables companies to make informed decisions based on accurate and accessible lease data.
How Lease Tracking Software Can Help With Property Management
Lease tracking software plays a crucial role in property management, where a large lease software portfolio is often involved. It helps property management companies effectively understand and analyze lease software performance, as well as track important dates for collections and payments.
Property management is just one example of a real estate or commercial real estate function where a large lease portfolio can be in play.
Property management companies rely heavily on lease tracking software because lease management system is at the core of their business. The software provides valuable insights into lease performance by consolidating lease data, generating reports, and offering analytics tools. Property managers can assess key metrics such as occupancy rates, rental income, lease expirations, and tenant turnover. This information allows them to make informed decisions, optimize lease terms, and identify opportunities for improving property performance.
Lease tracking software helps property management companies understand lease performance, and it also helps the track important dates for collections and payments.
Lease tracking software helps property managers stay on top of important dates for rent collections and payments. It provides automated reminders and notifications for upcoming payment due dates, ensuring that rent is collected on time and minimizing the risk of missed payments. By streamlining these processes, the software improves cash flow management and helps maintain positive landlord-tenant relationships.
Given that this is the core business of a property management company, it’s not an exaggeration to say that quality lease tracking software can spell the difference between success and failure.
The Lease Specifics of Asset Management
Every single lease is a unique asset, with different transactions, rules variations, different standards that apply, and so on. Lease tracking software keeps all the details sorted out so that the available data can be easily summarized and understood.
Lease tracking software also recognizes that each lease is a unique asset with specific details and variations. It keeps all the lease specifics sorted out and organized, making it easy to summarize and understand the available lease data. This includes information such as lease terms, rental rates, lease modifications, and any other relevant details. Property managers can access this consolidated information to gain a comprehensive view of their lease portfolio, track individual lease performance, and make data-driven decisions.
Lease Accounting as Part of Lease Tracking Software
When it comes to lease transactions, calculations matter. They need to be accurate and comprehensive, and the best lease tracking software includes lease accounting functions that can keep up with payments, changes in terms, and so on. That means accurate data that can go into succinct reports and be used as an effective business tool.
Lease tracking software incorporates lease accounting functions as an integral part of its features. It ensures accurate and comprehensive calculations related to lease transactions, such as rental payments, changes in lease terms, and financial obligations. This accounting functionality guarantees the generation of precise financial data that can be utilized in succinct reports and serves as a valuable business tool. Property managers can monitor lease-related financial metrics, track income and expenses, and comply with accounting standards, ultimately facilitating accurate financial reporting.
Lease tracking software greatly aids property management by providing insights into lease performance, facilitating the tracking of important dates, and ensuring accurate lease accounting. It enables property managers to optimize property performance, improve cash flow management, and make informed decisions based on reliable lease data. By leveraging lease tracking software, property management companies can enhance their efficiency, mitigate risks, and achieve greater success in managing their lease portfolios.
Get the Best Lease Management Accounting Solution from iLeasePro
At iLeasePro, we understand every aspect of the lease tracking process. We know what software and features you need, the functions and security protections that have to be included, and how they can best be applied to your business leasing situation.
We also know the ASC 842 standard, and as such we know how lease tracking software has to work to be in compliance with that standard.
We’ve provided lease tracking software for companies of all sizes, and our leasing software is considered among the best in the industry. When you call us we can set you up with a lease accounting software free demo, which will give you an idea of how it all works.
To do this, call us at 888-351-4606, or you can email us at email@example.com. We also have plenty of great information about lease accounting software on our website, which is ileasepro.com, and you can chat with a live representative there as well.
Lease tracking software is an essential tool for businesses in effectively managing and maximizing the performance of their lease portfolios. It provides comprehensive functionalities that enable accurate and up-to-date tracking of lease data, ensuring easy access to information, generating insightful reports, and supporting informed decision-making by managers and executives.
Lease tracking software serves as a centralized repository for all lease-related information, allowing businesses to maintain a comprehensive view of their lease portfolio. It enables companies to track lease transactions, monitor payment schedules, and assess lease performance. By capturing and organizing lease data, the software streamlines the process of documentation, providing searchable and shareable records of lease transactions.
One crucial aspect that Lease Tracking Software addresses is the management of embedded leases. Embedded leases are leases that are part of broader contracts or agreements. Lease tracking software is specifically designed to identify and record transactions related to embedded leases, seamlessly integrating them with existing lease data. This ensures that all lease-related activities, regardless of whether they are standalone leases or embedded leases, are accurately tracked and managed.
Lease tracking software also plays a vital role in helping companies stay compliant with accounting standards such as GASB, FASB, IASB, and ASC 842. It ensures that lease transactions are recorded in accordance with the specific guidelines of each accounting standard. The software incorporates lease accounting functionalities, facilitating accurate calculations, financial reporting, and compliance with accounting standards.
Moreover, lease tracking software solves common problems faced by businesses in lease management system. It reduces the time spent searching for lease documents and files, streamlining the information-finding process. The software also helps prevent data errors by automating calculations, eliminating duplicates, and maintaining data consistency. It centralizes lease information, making it easily accessible for decentralized organizations and improving operational efficiency.
In summary, lease tracking software is a critical tool for businesses to effectively manage their lease portfolios. It enables accurate tracking, documentation, and reporting of lease transactions. The software addresses challenges related to embedded leases, ensures compliance with accounting standards, and solves common problems in lease management. By leveraging lease tracking software, businesses can optimize lease performance, mitigate risks, and make informed decisions that drive success.
Frequently Asked Questions
Does lease administrative software help prepare an automated operating expense and cam analysis?
Yes, lease administrative software can help prepare an automated operating expense and Common Area Maintenance (CAM) analysis. These software solutions often include features that allow for the tracking and calculation of operating expenses and CAM charges associated with leases. This streamlines the process and helps generate accurate analyses based on the lease terms and relevant data.
What is lease management and what are the basics of a lease?
Lease management refers to the process of overseeing and administering leases throughout their lifecycle. It involves activities such as lease creation, tracking lease terms and obligations, managing payments and collections, handling renewals and terminations, and maintaining lease-related documentation. The basics of a lease include key elements such as the parties involved (landlord and tenant), lease term, rent amount, payment schedule, rights and responsibilities of both parties and any specific terms and conditions.
What is lease management software?
Lease management software, also known as lease administration software, lease management system, or lease tracking software, are tools designed to assist businesses in effectively managing their lease portfolios. These software solutions provide functionalities to centralize lease data, track lease terms and obligations, automate payment and collection processes, generate reports, facilitate lease document management, and ensure compliance with accounting and financial reporting standards. They help streamline lease management system workflows and improve efficiency.
Does lease administration software help manage my lease portfolio?
Yes, lease administration software is specifically designed to help manage lease portfolios. It provides features to track and organize lease information, store lease documents, monitor lease expirations and renewal dates, manage payments and collections, and generate reports related to lease performance, financials, and obligations. By centralizing lease data and automating various lease management tasks, the software simplifies the overall lease portfolio management process.
Does lease administration software simplify how I access key lease data?
Yes, lease administration software simplifies access to key lease data. It typically offers a centralized repository where all lease-related information, documents, and data are stored. This allows authorized users to easily search, retrieve, and access specific lease details, such as lease terms, payment history, critical dates, and other relevant information. It eliminates the need for manual searching through physical files or scattered digital documents, making it convenient and efficient to access important lease data whenever required.
Can landlords and tenants sign leases remotely using electronic or digital signatures for residential lease agreements?
Yes, landlords and tenants can sign leases remotely using electronic or digital signatures for residential lease agreements. Electronic signature solutions are legally recognized in many jurisdictions and can be used to execute lease agreements without the need for physical paperwork. These solutions provide secure and convenient methods for capturing signatures electronically, ensuring the validity and integrity of the lease agreements. However, it's important to comply with applicable laws and regulations and regulatory compliance regarding electronic signatures in the specific jurisdiction where the lease agreement is being executed.
How does lease management software help companies stay compliant with financial reporting and generally accepted accounting standards?
Lease management software helps companies stay compliant with financial reporting and generally accepted accounting standards by incorporating lease accounting functionalities and ensuring accurate calculations and reporting. The software is designed to adhere to accounting standards such as GASB, FASB, IASB, and ASC 842, which govern lease accounting practices. It helps track lease-related financial data, generate reports for financial statements, calculate lease payments, amortization schedules, and other relevant financial metrics. By automating these processes and providing standardized data, lease management software assists companies in maintaining compliance with accounting standards and facilitates accurate financial reporting.