Best Lease Accounting Softwares
Lease accounting software tracks income and expenses for property and equipment rental businesses, also known as lessors, and businesses that lease property or equipment for their own use, aka lessees. It also ensures businesses stay in compliance with domestic and international accounting standards. There are many lease accounting software companies that tout multiple features to help businesses manage the financial and reporting aspects of their leased assets. We evaluated companies based on important features, including amortization schedules, expense management, and integrations.
See here: Marketing Automation Software for Small Bussines
Amortization is the process of paying off a debt over time by making regularly scheduled lease payments. These payments are amortized for the set term of the lease using the straight-line method. An amortization schedule for calculating total lease charges and tracking lease duration is an essential feature of lease accounting software, so we looked for software that included this feature.
The best lease accounting software has multiple features for managing expenses, including budgeting, forecasting, and expense tracking. Lease accounting software should assist with budgeting and forecasting so that businesses can track their performance, improve financial decision making, and plan for the future. It should also track all types of expenses, including maintenance and repair costs, bank and legal fees, and other operating costs. We focused on companies with robust expense management features in their software.
Lease accounting software often integrates with lease management software for an all-in-one solution that helps businesses maintain lease portfolios, documents, tenants/customers, deadlines, and other leasing data. It also usually integrates with core business systems, such as popular enterprise resource planning (ERP) applications, accounting systems, and other tools used with lease accounting software. We recommend software that integrates easily with the most popular business software to create a unified platform with hassle-free lease and transaction management.
What Is Lease Accounting Software?
Lease accounting software helps businesses manage the financial and reporting aspects of their leased assets by keeping track of the income and expenses for property and equipment rentals. The platform automates lease portfolio management, amortization schedules, budgeting, and forecasting. Lease accounting systems track payments made, send invoices and other billing documents, generate journal entries, and create financial reports. Many systems also store lease data, allowing users to keep track of each lease and asset, contact information, lease terms, and renewal deadlines. Additionally, good lease accounting software supports data imports from existing spreadsheets, and software repositories into its own database and setup notifications for critical dates.
Lease accounting solutions also help businesses maintain compliance with domestic and international accounting standards mandated by the ASC, FASB, GASB, IASB,, or IFRS. Staying in compliance requires complex calculations to determine which leases must be included on the company’s balance sheet. The software streamlines these calculations for each standard, ensuring users stay up to date and compliant even when standards change.
Benefits of Lease Accounting Software
The primary benefit of lease accounting software is staying in compliance with current accounting standards. However, the best lease accounting software provides many other benefits beyond the legal aspects. Lease databases provide easier and quicker access to contracts and related documents, allow businesses to tailor their reporting based on individual needs and manage critical lease dates proactively. Some of the other top benefits include:
- Improving efficiency and productivity
- Centralizing lease contracts and related documents
- Reducing costly errors by performing accurate calculations
- Sending journal entries to the general ledger automatically
- Improving budgeting and forecasting
- Saving money and making better financial decisions
- Improving vendor management and increasing leasing power
- Receiving alerts for critical dates and lease renewals
- Creating a full audit trail and making audits more efficient
- Accessing any lease anytime when using cloud-based systems
- Enhancing interdepartmental collaboration
Must-have Features of Lease Accounting Software
With accurate and relevant financial data, businesses can verify they’re making a profit and meeting their financial goals. To achieve this, lease accounting software must have a range of expense management features, including budgeting, forecasting, billing and invoicing, expense tracking, and payment tracking. Budgeting and forecasting track business performance so that you can improve your financial decision making and plan ahead as your business grows.
Good lease accounting software tracks all types of expenses, including maintenance and repairs costs, loan payments, bank and legal fees, insurance payments, and other costs. It must also track revenue from security deposits, rental payments, and late fees to calculate earnings after expenses. An amortization schedule is another must-have feature for calculating total lease charges and tracking lease duration.
Integration capabilities are essential features to simplify processes, reduce costs, and ensure accuracy and efficiency. Selecting lease accounting software that integrates with existing core business systems provides an all-in-one solution that eliminates costly errors. Integrations allow accurate calculations made by your lease accounting software to transfer automatically to your ERP applications, accounting systems, and other tools often used with lease accounting systems. Data is uniform across platforms because the same information is being sent back and forth.
The Cost of Lease Accounting Software
The two most common pricing models for lease accounting software are based on how much data is stored in the system or the number of users accessing it. Some software solutions have separate fees for each of these factors. User-based pricing tends to be more expensive than data-based pricing, especially if the software is being installed on the buyer’s server.
On-premises software requires more maintenance and IT department involvement and may eventually need an expensive upgrade. Cloud-based software allows users to access their data from anywhere with an internet connection, which can be beneficial in many situations. Pricing for cloud-based software often is calculated by the amount of data stored, and programs that allow unlimited users usually offer the lowest cost overall. Some software providers charge by the number of leases, not the actual data amount. This is handy for lengthy real estate leases that take up more storage space.
Many of the companies on our list don’t provide public pricing information, making it difficult to compare costs. However, of those that do, monthly plans were the norm with costs ranging between $99 and $500. One company charges a hefty annual rate that smaller businesses will likely have trouble managing.
AMTdirect is a cloud-based lease accounting and financial reporting compliance software that helps users manage day-to-day lease accounting and the transition to the new Government Accounting Standards Board (GASB), Financial Accounting Standards Board (FASB), International Accounting Standards Board (IASB), and International Financial Reporting Standards (IFRS) leasing standards. Its comprehensive software solution combines lease accounting and administration and handles all leasing needs for real estate and equipment, plus owned, leased, and subleased assets. Key features include:
- Processes accounts receivable (A/R), accounts payable (A/P), Consumer Price Index (CPI), allocations, operating expenses, and more
- Calculates current CPI charges and future increases automatically
- Calculates IFRS 16 or FASB Accounting Standard Codification (ASC) 842 schedules, percentage rent, and rent tax
- Creates billings and adjustments and implements approval workflow
- Automates historical reporting of payables and receivables and tracks delinquencies
- Creates monthly rental invoices by portfolio, region, or individual locations
AMTdirect integrates with core business systems, including popular accounting and ERP applications, and internally developed systems. This gives businesses a unified platform with centralized analytics and transaction management that increases efficiency and data integrity.
Pros & Cons
AMTdirect doesn’t offer a free trial, but it does offer a free demo. Its software solution includes key expense management features, such as amortization schedules, billing and invoicing, budgeting and forecasting, expense tracking and payment tracking, and has integration capabilities with ERP, accounting, and internal systems.
Bloomberg Tax Leased Assets
Bloomberg Tax & Accounting Leased Assets is a cloud-based lease management solution that helps enterprises track and manage all leased asset types, including finance and operating leases. Its SaaS solution enables users to handle complex tax calculations for managing lease liabilities and right-of-use assets. Bloomberg’s software also provides accurate classification, accounting, and reporting for leased assets under the new IFRS 16 and ASC 842 standards. Key features include:
- Automated lease accounting processes
- Comprehensive calculations that ensure accuracy
- Immediately accessible lease details, quantitative disclosures, and amortization schedules
- Ability to modify or cancel lease arrangement with calculations updated instantly
- Custom fields to track what’s important and customize reporting needs
- Access to critical lease dates to stay informed and current
- Audit trail through tracked changes and complete history of every action taken
Bloomberg Tax Leased Assets streamlines workflows through seamless integrations between multiple leasing systems, ERP, A/P, general ledger, and other internal systems.
Pros & Cons
Bloomberg Tax & Accounting’s leased assets software offers a free demo and integrates with ERP, A/P, general ledger, leasing, and internal systems to reduce errors and streamline workflow. It’s primarily a lease management package, so it’s missing key expense management features, such as billing and invoicing, budgeting, forecasting, and expense tracking.
CoStar Real Estate Manager
CoStar Real Estate Manager is a cloud-based software that combines lease accounting, lease administration, and portfolio and transaction management in one solution. Users can achieve error-free lease accounting while managing and reporting on leased equipment and real estate for compliance with new IFRS 16 and ASC 842 standards. CoStar REM quickly generates comprehensive disclosure reports, including standard, custom, and ad hoc reports. Other key features include:
- Accounting dashboard with live balance sheet
- Automatic journal entry posting to general ledger
- Base rent and payments in any currency
- Automated gross amounts payable per unit of measure and time
- Access to billing and invoicing details
- Expense payments to multiple parties
- Budgeting and forecasting guidance
- Automated disclosure with lease audit notes
- Unlimited users and security controls
CoStar REM supports more than 700 system integrations, integrating with leading ERP, accounting, reconciliation, and other business systems to streamline rent payments, financial reporting, and month-end close.
Pros & Cons
CoStar REM includes key expense management features for real estate and equipment leases, including amortization schedules, billing and invoicing, budgeting and forecasting, and payment tracking. However, it tracks expense payments but not expenses. Interested individuals can request a free demo, but CoStar doesn’t provide public pricing information for comparisons.