Tango’s 2021 Buyer’s Guide to Lease Administration and Accounting is out, and we are excited to highlight a few of the critical best practices discussed by our experts in this downloadable guide.
Leasing as a method of financing the use of assets has been around a very long time, and businesses are increasingly taking advantage of this financial instrument. When most people think of leasing in a business context, real estate is the first use case that comes to mind. Buying commercial real estate is capital intensive and most companies would prefer to lease space and conserve funds to invest in their core business. Depending on the size of a company and its industry segment, the number of property leases in a portfolio can range from fewer than 10 to more than 10,000 – you’ll also want to partner with a solution provider that can help you achieve successful, long term compliance with FASB ASC 842.
As your company shops around for a new lease accounting and administration partner, know the critical information for selecting a software that is user-friendly and effective. Below are 3 essential best practices for locating the right lease administration and lease accounting solution from Tango’s 2021 Buyer’s Guide to Lease Administration and Accounting:
Step 1: Goals & Objectives
A clear understanding of your needs is critical to identifying, assessing and selecting the right software. Imagine you’re in the market for a new car. Would you take any car off the lot? Not likely. Finding the right car depends on a whole range of factors specific to the buyer. Will you primarily drive the car around town or use it for a long commute to work? Are you typically carrying a family of six or is the car primarily for one person? What type of budget are you working with? Which brands align with your values?
Step 2: Solution Definition
You can’t select the right partner if you don’t know what you’re looking for. Now that you understand your organization’s priorities, you’ll need to turn your attention to the solution definition – what software capabilities match your needs and how should these requirements be prioritized.
At the highest level, you need to determine if you need a solution for lease administration, lease accounting, or both. With few exceptions, it is best to have a single system managing both administration and accounting. These functions are needed by most companies, with the latter being a regulatory must, so it is best to stick with a comprehensive solution. Not all software on the market can provide both, so use this as an early screening factor to reduce the number of software packages you’ll need to assess.
Step 3: Vendor Fit
Selecting the right vendor is in the eyes of the beholder. You’ve articulated the organization’s goals/ objectives, defined and prioritized your software requirements. The next step requires you to assess vendor fit – which solution best satisfies your requirements, who do you want to do business with and at what price. Broken down into its components, selecting the right vendor requires a clear understanding of the solution, company, and economic fit.
Are you interested in learning more about how to select the optimal lease administration solution for your organization? Download Tango’s 2021 Buyer’s Guide to Lease Administration and Accounting.