How many times have you heard the phrase, “communication is key?”
Odds are that you’ve heard it more times than you can remember.
It is no secret that communication is the backbone of any strong business and with the new FASB Accounting Standards Update, streamlined communication is needed now more than ever. Most businesses will need to meet these new standards by the (now extended) deadline of January 1, 2021. By utilizing lease accounting software, you can easily bridge the gap between your real estate lease management and accounting needs while being 100% compliant with these new standards.
Communication is the act of sharing information between individuals. Whether you're a seasoned accountant who can balance books in a day or a real-estate mogul, one thing is true: effective communication is important in getting the job done.
Recent polls indicate that, when discussing the implementation of the new FASB ASC 842 standards, 54% of private sector businesses believe that finding the people and resources to do the job is their biggest challenge. With people being the direct links in the communication chain, that’s over half of private sector businesses that potentially will have to deal with communication issues, if they don’t have them already.
Add to that a recent poll that found 94% of companies that hold real estate, equipment, or embedded leases feel unprepared or lack confidence about implementing the new standards.
Lease accounting software is the answer these companies need to successfully communicate through the implementation of the new FASB 842 standards. While we are all learning to live in our ‘new normal’ the accessibility, accuracy, and 100% compliance of standards found in lease accounting software can't be beaten.
Let’s take a look at just how this software can streamline communication for your real estate lease management and accounting needs.
From Communication Breakdown to Communication Victory
Communication, in any business, breaks down when the information being shared is incorrect, obscure, or presented in an untimely manner—directly affecting its relevance. This most commonly happens when there are ‘too many cooks in the kitchen’ and reliability becomes a concern. If a coworker is out on vacation, needs to go pick up a sick kid, or just isn’t the most responsive individual this can create a vacuum in the communication process. When the exchange of communication begins falling through the cracks it’s time to step back and identify where improvements can be made.
Alternatively, over-communication can have the same effect. When presented with too much information business leaders may misinterpret data or feel overloaded with information. This directly impacts the decision-making process of businesses and can create rifts in a team environment.
Lease accounting software can directly assist communication deficits between your real estate lease management and accounting process in the following ways:
- It’s a one-stop-shop for managing all types of leases in a single solution, keeping everything in one place
- Boils down the complexity of managing multiple leases to harness the details
- Generates comprehensive data reports, supporting both quantitative and qualitative requirements, ensuring the accuracy and reliability of the information
- 100% compliant with new FASB standards
- Accessible from anywhere through cloud base software saving time and effort
- Increases overall employee productivity
By using this software you effectively give your organization a solid, central base to stand on. This streamlines communication by making data easily accessible, accurate, and consistent to any user.
Success is in the Details
“Just give me a quick, high-level breakdown.”
Bet you’ve heard that phrase before as well, am I right?
Businesses are grown by communication and the sharing of accurate information. But what do we do when leaders don’t have time for the amount of information we’re sharing? When faced with this question we usually find ourselves trying to quickly identify the most important pieces of what we want to share but, because we’re human, we can easily overlook a critical piece of data.
Instead, we should focus on customizing and curtailing the information we want to present to the business’ specific needs. By identifying the exact information that is relevant to your unique business, you get straight to the point with the most informational and effective data to present.
With lease management software you can typically customize your reporting or choose from over 300 standard reports when your team partners with the right solution. Customized reporting ensures that businesses get accurate and pertinent information in an easily digestible and curated way relevant to their business goals.
As the communication of information is streamlined for accuracy, business leaders may benefit by:
- Making stronger and more confident decisions
- Moving towards company goals with a solidified vision
- Being transparent with employees and stakeholders, through increasing trust and encouraging company-wide teamwork
- Engaging in quick problem-solving
- Identifying potential problems before they occur
- Increase overall employee productivity
The biggest challenge of owning and leasing real estate is the complexity of the details and the task of tracking multiple assets that are all on different timelines and stages of their contracts. Some companies still use spreadsheets to track these details but with all the changes and updates needed to meet the new standards, that leaves a lot of room for error and increases the risk of not meeting FASB ASC 842standards.
Accurate information and reporting are crucial to tracking these details and as more businesses realize the benefits of organization and preparedness, the more they put aside spreadsheet tracking and move toward lease management and lease accounting software. The details begin to shine through behind their success.
From Loose Papers to Digital Organization
The digital age continues to allow businesses to rapidly innovate, move online, and take the next step forward. We’re moving away from loose papers, rooms full of filing cabinets for document storage, and those folders that always seem to be missing. Essentially, we’re moving away from human error.
By taking your lease management and accounting processes online you can expect a myriad of communication benefits. Having access to documentation and data anytime, anywhere is becoming an expectation in today’s world. With the reduced amount of paperwork needed you can directly save time and expenses, not to mention a few trees.
On top of that, advanced search capabilities and unparalleled organization come hand in hand with an online management system. In the time of COVID-19, lease accounting software can help you track down specific information without needing to send someone personally to investigate the office. As working from home options become more popular (or mandatory in some cases) it’s entirely in your benefit to keep as many resources online as possible.
The ability to access detailed information within moments and know that the information is accurate expands the confidence and trust of business owners around the world. Lease accounting software guarantees 100% compliance with FASB, GASB, and IASB standards, assuring accuracy, and putting minds at ease. When everyone can access the same information without being physically together, you continue to be confident and exercise teamwork and collaboration.
With a deeper understanding of the details of your business, confidence expands and organization becomes a habit.
Preparation Pays Off
What is the most common cause of procrastination?
That’s right – fear of failure.
Procrastinating is the easy answer and can get the best of us. Especially when it comes to end of the year deadlines, project due dates, or in this case meeting those FASB ASC 842 standards this coming January.
But as Thomas Jefferson said – “never put off till tomorrow what you can do today.”
When the end of 2020 eventually rolls around, you can be fully prepared to meet those deadlines. Lease accounting software can help you capitalize on operating and finance leases under FASB, GASB, and IASB standards by limiting the noise and focusing on the cold, hard facts. Meaning you can worry less about change and focus more on success.
Changing processes, ideas, and minds requires effort. It's easy to want to procrastinate. But it pays off to start now instead of waiting until later.
Feeling confident in your implementation plan is the first step in the preparation pipeline and identifying all aspects and details of your assets should be the priority. The easiest way to align the beginning of your plan is to select the software you want to work with. Lease accounting software can take a lot of pressure off the implementation team and makes preparation easy by walking you through all changes and requirements.
By introducing a single point of reference in the process your team will have common ground to stand on, increasing their productivity and communication. Ultimately enhancing the flow of your organization as a whole, allowing everyone to feel prepared.
In it For the Long Run
Our world is changing more rapidly than ever. With a global pandemic affecting almost every business in the world in some way, real estate has never faced a more urgent and difficult issue. Are you ready for the 'next normal?'
It could almost be considered a blessing that updates to the FASB ASC 842 standards emerged when they did, as companies have already started to transition with a lease accounting software. Bringing everything online in an organized, central system will be a need for the years to come as COVID-19 directly impacts the Commercial Real Estate (CRE) industry.
Consolidations of leases and properties are on the horizon as businesses begin to make the move toward an online environment. Offering employees the ability to work from home is becoming a new standard itself but this means that the need for CRE might not necessarily meet the expectations that they did last year. Only time will tell.
However, by getting set up with lease accounting software now, you can get ahead of the curve. Being prepared has never meant more and having all of your lease and accounting information in one space will pay off in the long run.
More Efficient Audits
Audits not only halt progress, but they’re a pain in the butt too. They’re stressful, time-consuming, and keep you from your ever-growing to-do list. The new lease accounting software allows you to see who changed what field and why, something Excel just simply doesn't excel at. Now that auditors can sign in remotely, pull up reports, and access data without ever having to bother you, you can rest assured that they’ll find everything they need… and not have to bother you in the process. Everyone’s job just got a little easier.
Conclusion: Streamlining Communication Effectively Lowers the Risk of Error
Financial reporting is in the midst of an overhaul to expand reporting and increase transparency to meet the new FASB ASC 842 standards. Meeting these new standards is crucial and pulling together information from across your organization can be a daunting task, as most companies are lacking confidence or feeling unprepared.
By using lease accounting software, you can initiate cooperation and communication between your real estate and accounting needs. Eliminating communication breakdowns is more important than ever and by giving your company a solid foundation to stand on you can begin to implement these new standards with confidence.
A solid foundation is enhanced by easy management of the minute details. Having all of your lease management accounting information readily available online eliminates the hassle and safety of going into the office and spending hours digging through files. Advanced search capabilities make this feature even more of an asset.
Preparedness is the final piece in this communication puzzle. Whether you’re just looking to meet the standards this January or if you’re in it for the long haul, lease accounting software is here to help.
While the world today is unpredictable, one thing is certain: everything would go more smoothly with better communication. New things are being thrown our way every day, and with the new lease accounting software, you'll find yourself better positioned to tackle obstacles as they come.
Whether it’s streamlining the connection between real estate and accounting needs, customizing reporting, or preparing for the future, lease accounting software can do it all. But most importantly, it opens the door to better communication.
Looking to enhance your team’s communication through lease accounting software?
AMTdirect is ready to provide a software solution for your team’s lease accounting and lease administration needs.