Tips For Perfecting Lease Portfolio Management
Managing a large portfolio of leases is a complex, time consuming and cumbersome process. Left unchecked, badly managed leases can easily add up to a significant financial burden and add unnecessary strain to even the most profitable of companies.
In this blog, we’ll look at some tips for perfecting the management of your lease portfolio.
Use Reputable Providers
Like any other purchase decision, it’s better to opt for a provider you’re familiar with or one whose reputation precedes them. If a lease provider’s offer seems too good to be true, it quite likely is. Would you be willing to risk your own money by leasing a top-of-the-range vehicle at an unbelievable price when the salesperson is reluctant to provide you with the rest of the details?
Should your domestic lease provider provide an asset that isn’t up to scratch, you can sever ties and take your money elsewhere. When your business relies on these assets in order to function, however, the knock-on effects will inevitably grow beyond your control. Before you know it, you’ll be dealing with delays, inferior service quality, unhappy clients, or worse.
If you’re new to leasing or unsure on how to identify reputable lessors, be sure to consult with leasing experts – they should be able to advise which providers are reputable lessors in general and which have experience with your type of asset in particular
Read The Small Print
It’s critical to understand in full what constitutes fair use and also wear and tear on each of your leased assets. Make sure you don’t leave any room for ambiguity, as your lease provider could surprise you with unexpected costs when the time comes to return the asset to its legal owner.
Partner With Leasing Specialists
If you aren’t confident enough in your knowledge of lease agreements and the wider market, it might be worth seeking professional assistance. Specialist leasing consultants and lease service suppliers have extensive expertise and knowledge in a variety of leasing disciplines such as new lease arrangement, lease negotiation, lease expiry, lease portfolio analysis and lease consolidation and even lease accounting.
Utilising the experience of a specialist will not only give you access to those assets crucial for the operation of your business but also ensure the best possible rates and terms that work out in your favour.
Understand Changing Lease Accounting Regulations
With the implementation of IFRS 16 finally here, lease accounting standards are undergoing significant changes for the first time in over a generation. The rulebook is being rewritten entirely with respect to accounting for lease agreements – everything down to the definition of what constitutes a lease and what constitutes a service agreement will be changing come January 1st, 2019.
For a comprehensive look at the changes coming with IFRS 16, download this free guide and see how IFRS 16 will impact your business.
Centralise Lease Management
If you’re dealing with a widespread portfolio of lease agreements, it’s vital to centralise all your data in order to become more efficient. If your teams operate across multiple locations either nationally or internationally, it’s a sensible move to create a central leasing hub.
All paperwork, agreement terms and conditions and other information should be stored in a centralised electronic location. The most practical and affordable way to achieve this is to investigate and then invest in a cloud platform. By storing your data in the cloud, all key stakeholders have on-demand access to it from anywhere around the world, and you benefit from the state-of-the-art security and redundancy features provided by the data centre where your data is held.
Another risk of managing a lease portfolio that is dispersed across a number of locations is that work can be, and often is, needlessly duplicated. This may result from different employees working on the same document, or from documents being lost and having to be recreated, causing many man-hours to be lost due to inefficiency. A centralised lease management hub or cloud storage platform will go a long way towards eliminating duplicate work.
Invest In Lease Accounting Management & Accounting Software
Innervision’s LOIS is one example of lease accounting and management software that will help you not only by having your portfolio at your fingertips but help you understand whether your agreements are offering the best value and if they’re compliant with the latest lease accounting standards.
LOIS produces all the accounting information required to complete the financial statements; including income statement, cash flow and balance sheet. The system will also run amortisation schedules, journal entries and disclosure summaries.
Increase The Visibility Of Your Portfolio
With the powerful technological lease management software on offer today, there’s ample opportunity to increase the visibility of your portfolio for all key members and ensure that all relevant stakeholders remain on the same page:
Automation software takes a lot of the repetitive and cumbersome work out of lease management. Lease management systems automate many time-consuming tasks such as report generation, comparison sheets and other tasks that often take up a lot of your team’s attention and thus raise the chance of human error and carelessness coming back to bite you in the long run. Reducing your workload via investment in automation will leave you free to focus on optimising agreements and efficiencies, and ensure that you’re managing your leases as effectively as possible.
Easy notifications should be built into your lease management software and alert you to upcoming obstacles, renewals and other red flags arising from your lease portfolio. This means you’re less likely to incur missed service charges or unnecessarily activate automatic renewals.
If you’re looking for a lease management software solution to help take better control of your lease accounting data, visit our product page to find out more about LOIS, our cloud-based lease accounting management software.
For more tips on lease management, download our free guide to the basics of leasing here: