Choosing lease accounting software without much consideration can lead to unexpected pitfalls in the future. The biggest mistake most companies will make is rushing into a contract without first thoroughly assessing their needs. This can lead to a situation where your software is not adequately supported with proper training and software that does not perform all the functions you require over time.
To help you avoid investing in the wrong software, this blog details seven of the questions you need to consider when looking for the right solution. Equip yourself with the criteria and questions required to assess each system and find one that will work best for your team.
1. What key business requirements do you need the software to meet?
Purchasing lease accounting software is an investment, and before you choose which solution to invest in, you need to analyze how it will meet key business requirements. The first step toward this is to document your lease administration processes, including the time and resources required to perform critical functions.
Likely, you will quickly identify numerous ways the software will benefit your team. If you’re curious about building a comprehensive list of requirements, check out our blog on how to make a requirements checklist.
2. What are the essential features you require the software to perform?
Once you know what requirements you need to meet with your lease accounting software, it’s easier to think about essential features. Property lease management software is varied, and not all solutions are equal.
By prioritizing your “must-have”, “nice-to-have”, and “unnecessary” features, you can quickly identify solutions built to meet your specific needs. For instance, if you plan to scale operations in the coming years, it’s essential to find a solution that can handle the administrative burden as you grow.
For inspiration, why not check out our blog on the eight essential commercial lease management software features.
3. How long does it typically take your team to prove compliance?
When it comes to the new lease accounting standards (ASC 842, IFRS 16 and GASB 87), many companies struggle to prove compliance, keep track of changes to regulations and implement them effectively across all leases. Weeks (and sometimes even months) of time are spent double-checking entries and spotting errors.
One of the most important ways to determine whether or not you need to invest in new software is to check the time and resources spent on achieving these standards. Does your current solution slow down the processes? Does your team struggle to provide auditable records? How quickly can you consolidate your information into financial statements?
4. Can you make a list of lease accounting software that meets your needs?
Regardless of what software you purchase, your team will be using it for many years to come. Because of this, it’s wise to make a comprehensive list of solutions that you can research, checking which solutions have the features you need to meet your business requirements.
Your team is one of your most important resources, so pool their knowledge in your search for the right leasing software. It’s likely that they’ve worked with multiple solutions during their careers and will easily be able to list their preferences.
Don’t just rely on your team. Try speaking to similar companies, checking out online forums and partnering with technology experts. This way, you will get a broader sense of your options and may discover solutions that offer everything you require.
Once you’re aware of what’s out there, you can narrow down your options to a shortlist. At this point, it’s wise to schedule demos. Make sure you bring along team members to help you ask the right questions and have a thorough understanding of lease accounting and compliance.
5. Does the leasing software include adequate training and support?
Once you’ve narrowed down your options, it’s time to start considering the fine print. It will be essential to establish how each software provider will help you in your integration journey. Do they have a support team or self-serve training tools like a thorough knowledge base? Preferably, they will have both.
If the software provider is unclear about how you will be trained or how the software is implemented, you may want to remove them from your shortlist. It’s easy to be side-tracked by impressive features in a demo, but ask yourself if they can answer your questions quickly and adequately? Does the software provider respond promptly to your request for a demo or emails? Did they send follow-up emails with answers to outstanding questions?
Even in the early stages of the acquisition journey, it’s easy to separate supportive software providers from the rest, so pay close attention to every interaction and consider the software provider as a partner when making your final decision. Is this a team you trust? Do you feel confident in their ability to address any problems that arise promptly?
6. How flexible and scalable is the software?
Companies are continually growing, so you need to purchase your lease accounting software with flexibility in mind. For instance, how many users can access the platform and do costs increase as the user base increases? Does the software work across different lease types with varying complexities? How many leases can the software handle? Is it possible to consolidate multiple locations in one central place?
These are all questions that require you to consider how you use the software over time. How you use the software today is likely to be very different from how you will use it in five years, and you need a solution that can handle your company’s future growth.
7. Does the package give you enough value for the price point?
It’s possible to find lease accounting software for almost any budget. However, if you’ve answered all the previous questions, you will be well aware that not all solutions are created equal. Many bare-bones solutions will not provide the same support level as more robust solutions, and the cost of integrating them with your current software and processes can quickly add up.
Other software may already be accounting for many of the costs you will encounter in their pricing plans. For instance, project management, integration, training and set-up fees will all be included, and you should be able to understand their licensing costs comprehensively. It’s vital to assess the value in terms of features, but it’s equally important to consider contracts closely and place adequate value on support and training when making your decision.