Choosing a lease management system is the first step in corralling all those paper files so that your company can track critical lease dates, pay rent accurately and on-time, and make informed proactive real estate decisions. It’s the foundation of cost containment, strategic portfolio management and often FASB/IASB compliance. But with so many lease management systems out there, how does your company choose the right one?
There is no single “right” choice for any company, but there are systems that will better accommodate specific requirements and others that might prove to be costly mistakes. How do you make sure your choice satisfies your needs and expectations? Here are some important points to consider:
Is the system user-friendly? It should be. The best systems are easy to navigate and are intuitive and straightforward in terms of both data entry and reporting.
Can the system manage your portfolio? Meaning can the database accurately capture your assets (whether owned or leased real estate), corporate structure, cost centers and GL codes and provide reporting based on those parameters. If your portfolio is global (or likely will be at some point) the ability to manage currency conversion and various space measurement standards is also vital.
What are the software provider’s history and resources? A vendor that is financially stable with an established solid track-record of performance is always preferable, particularly as most systems are now internet-based and licensed as “software as a service” (SaaS). In addition, explore each vendor’s ability to provide implementation specialists/services and ongoing tech support. If possible, speak with past and current clients of each vendor for feedback. A provider with shortcomings in either area should be avoided.
What are the system’s reporting capabilities? The best systems offer both meaningful standard reports as well as solid, intuitive ad-hoc reporting capabilities so that users can easily extract information from the database. It’s also vital to be able to export data/reports into a variety of formats, such as Excel, Word, PDF, etc.
How does the database capture and manage dates and dollars? A deep dive into how this information is entered, captured and reported on is crucial. Make sure it’s relatively easy to enter rent components, report on financial information and export payment files/data. In relation to dates, the ability to report on and receive system-generated notices of upcoming events – such as lease expirations, option notice dates – is critical.
What additional points should be considered if the system is to be used for FASB/IASB lease accounting compliance? At a minimum the ability of the database to integrate with ERP/accounting systems, classify leases, accurately automate accounting functions/calculations, manage discount rates and provide a robust menu of accounting reports (with standard, ad-hoc and custom reporting capabilities) is critical.
Lastly, cost is always a consideration, but don’t let it be your only criteria. The least expensive system can quickly become the most expensive system if it’s the wrong choice for your needs.
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