Co-founder and CEO at DebtBook.
It’s no secret that technology-driven change has been affecting practically every industry to some degree. For finance teams continually being asked to do more with less, it’s becoming increasingly necessary to find better tools that are tailored to address their specific challenges.
And now with the Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) pushing out new standards, finance teams must also navigate the complexities and requirements of that guidance. The good news is that technology can enable organizations to operate more efficiently, collaborate more effectively and make more informed decisions, as well as become and stay compliant with new lease accounting standards. The caveat? The success of your technology initiative can come down to choosing the right solution for your organization and your specific use cases.
As you evaluate lease management software platforms, consider the pain points you are looking to address, what features and functions are critical to business operations and whether the vendor will be able to effectively address your industry-specific applications.
Part 1: Use Cases
Finance teams spend an inordinate amount of time working with cumbersome, static spreadsheets (or even binders of paperwork!). But these types of software programs and processes have not evolved at the same pace as the industry, often resulting in one or more of the following challenges:
• Data silos: Lease abstracts, contracts, financial reports and other important documents may be scattered throughout the organization, spread across various tools, systems and even people. This fragmentation can slow down business operations, increase the likelihood of errors and cause miscommunication. An effective solution will break down those silos and aggregate the information into a single source of truth.
• Inaccurate information: It’s no secret that spreadsheets are prone to errors and inaccuracies. When your team works on data in a fragmented fashion, it exposes the organization to calculation errors, typos and human errors such as double entry or data loss. These mistakes compound until they become much harder (and potentially more expensive) to correct. An effective solution should maintain a history trail, minimize opportunities for mistakes and enable confidence in your data.
• Ineffective reporting: Outdated systems and manual processes mean that producing reports, journal entries, and notes for audit can be very time-consuming and take time away from more value-add activities. An effective solution should create audit-ready notes, automatically generate journal entries and produce standardized financial reports.
• Compliance: Preparing for the implementation of new lease accounting standards can be a very time-intensive process, taking anywhere from several weeks to multiple months depending on the number of financial documents and size of the finance team. An effective solution will help finance teams implement new guidance by automating manual processes, guiding you through the workflows and generating reports.
Part 2: Features And Functions
Lease management software programs should allow your team to save time on manual data entry, produce reporting that you will have confidence in, and help the organization implement and maintain compliance with new lease accounting standards. Consider the following questions as you go through the evaluation process:
• Is the platform intuitive? You need a solution that will be easy to learn, use and navigate — even for those teammates who may not be tech-savvy.
• Will the data be accessible and reliable? In the increasingly remote world in which we find ourselves, business continuity demands anywhere, any time access to data. Taking it one step further, you need to be able to trust that the data is the latest version and that it is correct.
• Does the solution enable collaboration? You are likely working with multiple internal and external stakeholders, including CPAs, lawyers and auditors. Does the platform allow sharing of key information so that everybody stays up to date and informed?
• Does the software meet financial reporting standards? You want a solution that saves time and optimizes resources. That means producing reports, notes and journal entries that are already compatible with Excellence in Financial Reporting standards.
Part 3: Vendors
The market is flooded with vendors who tout lease management capabilities. But generic, one-size-fits-all solutions may not meet the niche needs of public sector organizations or they may have irrelevant features that get in the way. Keep the following questions in mind as you select a software solution:
• Does the vendor have industry experience? Finance teams in the public sector have unique needs, pain points and challenges. The vendor that you select should understand these differences, have features and functions tailored to industry-relevant scenarios, and have a client support team with industry experience.
• What are the solution provider’s plans for future product development? With the existing GASB guidance and new lease accounting standards already slated for the immediate future, a static solution will not be well-equipped to help your organization adapt to the shifts in the industry. Look for a vendor who regularly pushes out new features and functions, has an innovative road map and is continuously providing more value.
• What does the onboarding and training program look like? Despite your excitement for new software, the biggest challenge for your team will be the status quo: It’s easier to do nothing than to do something. Will the vendor be doing the heavy lifting of implementation with a personalized onboarding experience or white-glove service, such as organizing your leases, cross-examining them against standards and extracting assumptions? Does the vendor have a background in finance or accounting, will they be able to understand the nuances of your business, and will they ensure your platform is customized to your needs during onboarding? Does the vendor have a formalized onboarding program with a variety of resources available for ongoing training?
• What about security? Cybercriminals can attack governments with programs such as ransomware. What are the vendor’s policies around data security, access and reliability, and encryption?
Navigating the fintech landscape can be overwhelming. As you evaluate lease management software for your organization, keep in mind your team’s biggest challenges and make sure the solution aligns with your current and future needs.