The Ultimate Guide to Evaluating Lease Accounting SoftwareBy NETSOL Technologies on 17-05-2023
When it comes to managing leases, having the right accounting software can make all the difference. With the introduction of new lease accounting standards, such as ASC 842 and IFRS 16, financial institutions are facing increased complexity and scrutiny in lease reporting and compliance. In order to navigate this landscape effectively, it is crucial to carefully evaluate lease accounting software options and select the best technology solution to not just streamline, but to futureproof your operations.
Choosing the right software can streamline processes, ensure accurate financial reporting, and improve overall lease management efficiency, while enabling you to significantly reduce your costs. In this article, we will explore the key factors to consider when evaluating lease accounting software, empowering you to make an informed decision that aligns with your organization's needs and objectives.
The global lease management software market has witnessed strong growth due to the surging adoption of software, growing adoption of cloud-based lease management software, and increasing internet penetration worldwide, amongst other factors. The lease management software market size was valued at $3.9 billion in 2021 and was speculated to reach $6.1 billion by 2030, growing at a CAGR of 5.7% from 2022 to 2030, according to Verified Market Research.
Why Use Lease Accounting Software
The majority of accounting software can offer advantages beyond compliance. This is particularly valid for lease accounting; one should consider numerous accounting facets. Each is important in delivering financial insights that can affect organizational strategy and decision-making. Businesses can benefit from superior lease accounting software solutions in numerous ways, including the below:
- Reduction in the amount of manual human intervention to meet accounting standards requirements.
- Elimination of human errors leading to increased financial reporting accuracy.
- Improvements in the visibility of important data, including financial and portfolio aspects.
Lease Accounting Software Evaluation: What to Look For
With new standards, accounting for software leases is complex, with many complicated factors involved. Spreadsheet implementation is highly dangerous, even though some businesses continue to utilize them to manage their leases.
Utilizing technology and software is wiser, but it comes with a problem: how do you pick the best lease accounting software for your requirements? When weighing possibilities, it's critical to consider your company's objectives, spending capacity, and clientele to make the best decision. To choose the best lease accounting software solution for your business, consider the following factors.
Of course, compliance with the new lease standards is one of the most crucial aspects to consider while assessing software solutions. Depending on your client mix, you might need to consider both FASB (ASC 842) and IASB (IFRS 16).
NETSOL's premier, next-generation platform for the global asset leasing and financing industry NFS Ascent guarantees adherence and compliance to global accounting standards and practices across all regions, giving our clients an automatic edge and enabling them to expand their enterprises seamlessly around the world.
Ease of Use
Software that is overly difficult or has a fragmented user-experience is one of the most frequent complaints businesses have about their platforms. When a system is not intuitive, your employees will take too long to execute simple activities, increasing frustration and reducing productivity.
NFS Ascent provides users with an unparalleled user-friendly experience with a highly dynamic and configurable system.
By selecting a technology partner that places a high priority on usability and providing a superior user-experience, you may prevent these problems. Lease administration and accounting software with a clear, adaptable design offer advantages like seamless handoffs and quick workflows, and it also reduces human mistakes.
NFS Ascent provides users with an unparalleled user-friendly experience with a highly dynamic and configurable system. Alongside streamlining of tasks, new users are able to easily adapt to the system due to the next-generation platform's intuitive and simple-to-use interface.
Value Over Cost
You should research your software's built-in features and determine how it will scale with your company if you want to get the most out of it. When you read the tiny print on some providers, you'll notice that they appear to offer many benefits, but charge extra. Find out from the software provider what is included in their package and how they will meet your needs as your company expands. Check out what recent customers are saying about their experiences as well. What are the aches and pains? What features are they utilizing? Has the software helped in their company's expansion?
By easily reengineering business processes, NFS Ascent helps clients achieve cost efficiency in daily processes. The platform eliminates unnecessary work. By automating the remaining steps of a process, resource consumption is enhanced, and the cost of human capital is significantly decreased.
Ascent is also offered on the Cloud, enabling smaller companies to gain immediate access to the same premier platform used by bluechip and Fortune 500 companies worldwide.
Moreover, Ascent is also offered on the Cloud via flexible, subscription-based pricing options, enabling start-ups and smaller finance and leasing companies to gain immediate access to the same premier, modern technology platform used by bluechip and Fortune 500 companies worldwide without having to pay any upfront license fees.
Integration with Existing and Third-party Systems
Programs can sync for simple communication and data sharing when leasing accounting software and your current tech stack are successfully integrated. It's crucial to consider whether the new lease accounting software vendor can work with your existing technology.
With advanced interfacing, Ascent can be easily integrated with other third-party systems and credit bureaus. The premier solution supports industry standard interfacing mechanisms including web services, through APIs, and file-based databases. Ascent's Integration Hub, one of its powerful configuration engines, is used for interfacing with external systems and enables push and pull of data to and from third-party databases.
Configurable and Capable of Cloud Deployment
If the lease accounting software is properly designed, it should have the functionalities listed below that you would find in any cloud product:
- User permissions: The power to limit what data users can view and modify at different levels.
- Validations: Your lease accounting software shouldn't be more than a glorified spreadsheet. Your program should issue an alert showing input errors if you enter incorrect data.
- Accessibility:The software can be accessed from anywhere in the world with an internet connection for ease of use.
- Search: Ability to search for events and agreements and find the information you want immediately and effortlessly.
- Centralized documentation: Capable of uploading and organizing documents seamlessly.
Today, it is imperative for software vendors to provide their platforms both On-premise as well as on the Cloud. Ascent is also offered on the Cloud, enabling finance and leasing businesses to benefit not only from subscription-based pricing options as mentioned above, but also via swift deployments and the ability to scale on demand.
Audits and Reviews
One of the biggest merits of using lease administration and accounting software over spreadsheets is simplifying the audit and review process. Ensure built-in audit trails, transparency, and reporting options are needed to audit inputs and outputs.
NFS Ascent provides audit and transparency controls, real-time data modification capabilities and automated reporting.
To comply with ASC 842, IFRS 16, and other regulations, using lease accounting software is crucial. Additionally, it helps with standardizing procedures, boosting accuracy, and guaranteeing timeliness while easing lease accounting operations and audits.
NFS Ascent can be configured /customized to meet all regulatory requirements as may be required. The system can be configured for each country of implementation for compliance with all regulatory practices including legal, financial, tax, regulatory, business and other compliance, allowing clients to conduct multi-country operations seamlessly.
Documents and private, sensitive customer information are of the utmost significance in the leasing sector. The integrity of your company, your reputation, and the confidence of your customers should not be compromised by security mistakes. A single data breach could render all your organizational efforts useless. Sensitive data is frequently used in lease accounting softwares. As a result, data security needs to be a top focus for your new system.
NETSOL adheres to the most stringent security guidelines to ensure compliance with the latest international security standards.
To ensure there is no chance of a database breach, look for software highlighting the importance of data protection and security. Therefore, IT and information security teams need to be on their toes to check data security plans and solutions closely. They must continuously stay up-to-date on the most recent developments in data security technology and upgrades that can improve their data security procedures for little to no additional expense.
NETSOL adheres to the most stringent security guidelines to ensure compliance with the latest international security standards. The system is accessed via effective authentication and authorization. User roles, rights and privileges are defined through various setups in the User Management System.
It would help if you considered support while looking for a technology partner. Without committed, continuous support, your company will have trouble onboarding new employees and navigating any changes or problems that may develop, which can cause inconsistencies and lower employee productivity. A seamless experience may be achieved by choosing the best lease accounting software that provides continuous assistance from a single platform instead of point solutions or third-parties.
NETSOL provides unrivalled support to its clients both on-site and off-site, from the starting to deployment to post-implementation. Clients are also supported during the SIT (System Integration Testing), UAT (User Acceptance Testing), and other phases, during data migration and for everything in between.
Specific Features for Lease Accounting in a Company
You need to consider additional portfolio requirements if you are confident that the lease accounting software for small enterprises or large corporations can manage the essentials. All of these elements may not be necessary for every business, but the following should be the top priorities:
- Multi-currency accounting:This will be essential to your functionality requirements if you have leases denominated in foreign currencies. Foreign currency accounting can be extremely time-consuming and error-prone. NFS Ascent empowers clients to effectively manage their complex multi-site and multi-currency operations and enables them to thrive in hyper competitive markets globally.
- Consolidated reporting: It's crucial to run consolidated and company-level reports if you have lease portfolios across several businesses. As an illustration, the parent company might want to run the combined results, but the subsidiary would want to view its numbers.
- Accounting for the lessor and subleases: Given the state of the economy, sublease transactions by lessees will increase. You should consider this if your portfolio has a lot of sublease agreements.
Futureproof Your Leasing and Financing Operations with NFS Ascent
Modern, cutting-edge technology, which is the foundation of NFS Ascent, makes it simple for automotive and equipment leasing and finance companies, alongside banks and other financial institutions, to manage their retail and wholesale operations seamlessly. It is designed to provide leasing and financing companies with a platform that supports their growth in terms of business volume and transactions thanks to its broad domain coverage and powerful configurable engines.
NFS Ascent essentially futureproofs operations for the global asset leasing and financing industry. It is built on superior, state-of-the-art technology that is designed with the flexibility to support future business growth through scale-up and scale-out features. The system can be configured and updated to cater to new and emerging business needs.
Used by the world's leading financial institutions including the largest auto captives, automotive and equipment finance and leasing companies, alongside banks, Ascent engineers your business to the point of ultimate precision, minimizing the need for human intervention while significantly reducing turnaround time. Its next-generation, future-ready technology framework reduces cost of ownership, ensuring operational dominance well into the future. Enhanced maintainability will allow innovation and sustainable growth of your business in the rapidly changing market environment.
Futureproof Your Leasing and Financing Operations with NFS Ascent
Select a technology partner that is dedicated to your partnership over the long-term as an investment in the success of your lease accounting management, and subsequently, your overall operations. Never be reluctant to ask in-depth questions. The platform that prioritizes your demands is the greatest option for your company.
At NETSOL, our diverse global clientele is the core of our organization. It is reflected in our intuitive design, continuous innovation, and dedication to uninterrupted support. You can connect with us by clicking here.
Additionally, if you would like a FREE demo of our cutting-edge, premier, next-generation platform for the global asset finance and leasing industry - NFS Ascent (Also available on the Cloud via flexible, subscription-based pricing, rapid deployments and the ability to scale on demand), please click here.
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