FASB 842 compliance is hard.
Picking a lease management system can be even harder.
We get it.
Most of the companies offering this software today present similar features in different user interfaces.
And since everyone is clamoring to get the lease standards implemented pronto, many companies - who have little-to-no experience with this industry - have jumped on the lease management software bandwagon.
And they’ll do and say anything to get as many new clients as they can.
In fact, we’ve heard so many cautionary tales from customers and prospects about the shady tactics of these irrefutable lease management systems, we put together a list of the top 3 lies we’ve heard them tell over and over again.
Use them to ask the right questions and choose the best lease management software for your business.
1 - Third Party Verification
Many lease management systems woo you with tales of independent verifications from third-party audit firms.
Sounds legit, right?
Certainly, it’s a plus to see outsiders say good things about a company you’re considering. But there’s a lot to think about before throwing all your eggs into this lease management system’s basket.
First, you don’t know what the third party’s measuring stick looks like.
You don’t know what it takes to become verified by this firm. It could be a rigorous process… or it could be just the opposite.
Request a copy of the verification report so you can judge for yourself.
Next consider the reputation of the auditing firm. Is it a recognizable name that’s known to be trustworthy? There’s nothing wrong with small, unknown auditors. But when choosing a lease management system, only the audit by a reliable firm holds water.
Also, at best this is a second-in-time report... one change to the application in question could render the report useless as it could break many of the calculations being performed.
Finally, there’s always a chance the lease management company paid to have this research firm complete a study.
And there’s nothing wrong with that. It’s a form of advertising and brand reputation management many companies use. In that case, though, the verification is going to err on the side of subjectivity and almost always shed a positive light on the company requesting the verification.
What it all boils down to is third-party verifications aren’t a reliable way to decide for or against a lease management company.
There are just too many factors to weigh.
And you probably don’t know - and don’t have the time to find out - the details about them.
2 - Immediate Compliance
Another misconception lease management systems promise is immediate compliance with FASB 842.
It’s a huge red flag.
We’ve been in the industry 20 years. And we’ve been working over the past 18 months to onboard public companies and get FASB 842 compliance up and running for them.
There’s one thing we’ve learned.
No matter the quality of the software or speed of the team, there's no way you can immediately be FASB 842 compliant because it takes months to even get onboarded to a any new system.
If you’re starting from scratch on a new lease management system or transferring from an existing one, that process itself will take months.
After all, you probably have hundreds if not thousands of contracts and leases to manage. Then you have to factor in setting up reports and automating compliance.
That takes time, too.
It’s a well known adage: You can have it fast. You can have it cheap. You can have it good.
But you can’t have all three at the same time.
If you believe a lease management company when it says it will have you up and running - with FASB 842 compliance complete - immediately, you’re either going to be paying a good amount more than competitors or you’re going to be settling for inadequate software.
3 - Competitor Comparison
Some lease management companies will compare themselves directly to competitors in an effort to win your money.
They’ll usually throw out an overwhelmingly positive generalization of beating their competitors by a large number using a suspiciously high statistic or ratio.
Something like... “5 out of 6 companies prefer us over competitors.”
Or... “We’re topping everyone in the industry.”
But if those claims aren’t linked to any real data - we’re talking about honest-to-goodness links to reputable sources - then who’s to say it’s not made up.
The same can be said for any other paper-thin comparison a lease management system makes about a competitor: more features, best in the industry, companies are ditching competitors for them. If there’s no supporting material, why believe it?
Unless there are links or graphs with cited sources, these are made-up facts they’re hoping will sway you to saying yes to their software.
Conclusion: Choose Fact Over Fiction
There’s enough fake news in the world today.
You don’t need to hear it from your lease management company, too.
At AMTdirect, we don’t tout verifications or make promises we can’t keep about implementation time.
Instead of convincing you we’re better, we let our software and our team of friendly humans do the talking.
The truth is, desperate lease management companies are telling these lies in an effort to grab your business. And if they lie in the sales process, there’s a good possibility they’ll continue the charade after you’ve signed the contract.
Do you really want to risk a painful, time-consuming and fruitless relationship?
The choice is yours.
And if you'd like to see how AMTdirect's lease management software can help you implement FASB 842 with the least amount of time, effort and expense... just reach out.