Leases - There Is Accounting for It!

“Aside from people expenses (aka all headcount-related costs), do you know what the next highest expense line item in your organization’s budget is? For many, the answer to this question is the cost and value of your leases.”

That’s how a report — “2022 Lease Market Analysis: Lease Accounting from Readiness” —from Visual Lease begins. It continues, “When you consider commercial real estate, vehicles, equipment, land, and more, this reality isn’t surprising. What is shocking, however, is that although most organizations have robust financial controls in place to monitor people-related expenses (salaries, benefits, T&E, etc.), the same can’t always be said for their lease portfolio-related expenses.”

So how’s your multi-unit organization doing managing its leases?

Unless you have a firm grasp of each of your leases, maybe a look into the report, could help you save plenty of money and time. At the very least, it will alert you to the importance of transitioning to the new(ish) lease accounting standards.

Accounting isn’t the sexiest item on the minds of most multi-unit organizations and operators, but the thought of saving thousands of dollars and many dozens of hours might be! According to the report, private companies that are not using third-party software expect to spend 1,582 hours gathering all necessary lease information.

And while it’s no surprise that the report from Visual Lease touts the benefits of using a third-party software firm to help manage multiple leases most efficiently, the tradeoff of paying an outside source for their expertise in lease management (assuming it’s a quality company) is well worth considering. Offloading that task allows management and owners to focus on growing their business.

Download (free) the report here.