Businesses typically oversee an unprecedented volume of lease agreements daily, necessitating reliable infrastructure and lease management procedures as essential for success. Understanding all administrative costs and any time-consuming processes or methods that impede growth is imperative in this arena, regardless of whether your lease covers offices or other types of properties.
We address some of the more frequently experienced challenges businesses have and provide several tactics and answers in this comprehensive property lease management guide, helping to streamline lease administration and better oversee assets. Discover which features to look out for when selecting lease management ERP software and resources available to ensure compliance with IFRS 16, ASC 842, GASB 87 and other accounting rules.
What Exactly Constitutes Lease Management?
Lease management aims to simplify the administration of multiple leases and subleases, and its software offers businesses an efficient means of doing this task. Leasing ERP software allows companies to oversee renewals, create delinquency reports, and perform other tedious errands more efficiently than before.
Property lease management encompasses more than simply adhering to accounting requirements: in addition to aiding business expansion and adhering to lease accounting guidelines, it considers growth strategies, projecting the future, and GASB 87/IFRS 16 / ASC 842 compliance issues.
Many businesses are currently seeking ways to improve their approach to managing rental properties, particularly lease management, which often goes undetected until paying bills becomes due. Many strategies involve writing off management expenses while only becoming apparent later when paying invoices become due.
Due to new lease accounting standards, IFRS 16 and GASB 87, lease management has become essential to any growth strategy in today's globalized world. No longer is lease management treated simply as another expense associated with running a company; today, lease managers face increased pressure to become leaders within this domain and create the next wave of success stories for themselves and their companies.
Due to increased scrutiny around lease agreements, businesses must invest in optimizing their property lease management strategy to demonstrate compliance and promote long-term success. Before continuing our blog on optimizing property leasing management approaches, let's quickly examine its many benefits.
What Is The Importance Of Lease Management ?
Managing complex real estate holdings is no small undertaking, with construction project management, lease administration, accounting, and transaction administration just some of the many moving components comprising its lifecycle. For this reason, corporate real estate professionals must carefully consider variables that could have significant financial implications impacting bottom lines.
An integral piece of this process is lease management. While its role may not be as exciting or visible, lease administration impacts what typically constitutes the second-highest expense among most businesses. Lease administrators oversee the tracking, reporting and optimizing of property and equipment obligations to ensure compliance, reduce risks and save money. Proper lease management allows companies to achieve compliance while optimizing real estate lease agreements to achieve compliance, reduce risks and save money.
Here Are Seven Benefits Of Optimizing Your Property Lease Management Strategy
- Understanding and improving market performance
- Save on financial and timewise administrative costs by cutting expenses in both areas.
- Ability to address losses and issues as they arise
- Better planning of future growth
- Adjust lease and services contracts based on market demands
- Increased Return On Investment Opportunities with improved reporting
- Achieve global accounting compliance
Five Ways To Optimize Property Lease Management Strategies
Centralize Lease Data And Management Tools
Consolidating all leases under one central system is one of the simplest ways to streamline property leasing administration. Teams may access lease information anytime or anywhere using cloud technology - eliminating bottlenecks and increasing productivity.
Unfortunately, many businesses rely on various systems to handle leases. Since not everyone can gain access to reports, and it can be more challenging to streamline operations in separate systems compared to centralized ones, this may result in inconsistent data or inaccuracy when reporting. Emailing back and forth often is necessary when retrieving reports; with separate systems, it becomes harder and slower when trying to access information quickly, impeding decision-making in crucial moments when decision-making needs to happen quickly.
By centralizing reporting and data management, key stakeholders do not need to wait long for information required for time-sensitive strategic decisions. A centralized system also simplifies compliance with ASC 842, IFRS 16, or GASB 87.
Establish Controls And Processes To Provide Reliable Financial Reports
Establishing controls and processes in property lease management strategies presents teams with one of the main obstacles they will need to overcome: creating standard procedures. Every aspect of leasing, from documentation to termination, requires specific protocols that should be put in place to provide consistent reports from property lease management teams.
All teams involved with lease acquisition and maintenance at any stage must follow standard processes that go beyond accounting's jurisdiction. Any data provided to accounting must be accurate; thus, automating operations whenever possible and creating an approvals system will result in more precise reporting and forecasting capabilities.
As lease accounting standards frequently shift, selecting ERP software designed to automate lease modifications is most advantageous. That way, your team can rapidly implement any new accounting standards across your entire fleet as soon as they arise.
Monitor Market Data
Keep tabs on leasing market activity to gauge how well your plan is working. Otherwise, you will not be able to monitor company growth potential or identify problem areas unless you understand market trends and property value fluctuations over time.
As desirable sites and leasing hot zones fluctuate over time, accessing current market information makes it easier to make informed judgments about future sites, occupancy prices, and initiatives.
Analysis of your lease portfolio requires considering market factors. Commercial leasing requires close observation and awareness; invest in research to maintain this awareness regularly and tap into market data regularly, as this can provide opportunities that enable more informed strategy-making going forward.
Approach Strategies With An Aggressive Attitude
Businesses often make the mistake of viewing lease management solely as an administrative task. However, it would be more appropriate to view it with a strategic mindset that accounts for any changes or fluctuations that might happen regarding space use, property value, etc.
Avoid Overgrowing: Remembering Space Can Outgrow You When considering renting, it's wise to remember the possibility of outgrowing a given space; therefore, it may make sense to request first refusal on nearby properties and request right of first refusal rights when anticipated infrastructure upgrades may lead to increases in value of a property's worth; similarly it would make sense to invest in easily divided spaces or look for shorter-term renters in areas expected to witness new transportation alternatives being opened within several years, for instance, offices located nearby with anticipated transit alternatives becoming more viable over the longer run.
As your business expands globally, expanding globally can add extra concerns. While you might know how to fulfill compliance regulations within one nation, is your company compliant with GAAP or even just ASC842? As it grows, adopting and complying with such international accounting standards might become challenging; that is when property leasing management solutions can help. These tools give complete visibility over financials across locations while adhering to international accounting standards like IFRS 16 or ASC842.
Invest In Erp Software To Simplify Property Lease Management Strategy
Investment in property lease management ERP software can help maximize the efficiency and effectiveness of property lease administration. Many variables must be considered when searching for solutions tailored specifically for you.
Selecting ERP software with cloud capabilities should provide an essential way for you to establish trustworthy financial statements, real-time reporting capabilities, and processes and controls. For more on this subject, visit this blog post.
Conclusion
Effective lease administration is critical for any successful real estate firm. By adopting best practices and taking advantage of modern tools for leasing procedures, property managers can save time and money while keeping ahead of competitors. ERP software provides customized solutions designed to meet the specific requirements of property owners and managers, as it understands all of the complexities that go into lease management.
ERP software provides companies with knowledge and cutting-edge resources that enable them to efficiently meet the challenges associated with managing leases, guaranteeing increased profits, happier tenants, and peace of mind. Unlock your property portfolio's total value through a partnership. Lease management shouldn't become burdensome. Experience how simplifying lease administration can benefit your company today and experience first-hand how it makes a difference.
