If there’s one commonality between vastly different industries, it’s reporting. That’s a good thing, as it’s important to measure what you want to improve. That being said, there are lots of bad reports and reporting tools out there—they’re unappealing, difficult to navigate and simply not helpful.
Good commercial real estate reports, on the other hand, are thorough, organized, beautiful and easy to understand. The best ones? They share all of those characteristics, but are also scalable and customizable. Let’s go over some best practices for building your next lease accounting report.
Choose the Right Software
First, it’s time to put away the spreadsheets. While this may have worked in the past, your competitors are using commercial real estate software to process their reports faster and provide more accurate numbers. Doing the same will mean a level playing field and dramatically improve your efficiency and peace of mind. Research and choose accordingly.
Set Up Your Lease Accounting Reporting
Once you have made your decision about which tool to use, make sure you’re setting up your reporting tool and template properly. With Quarem, the software will guide you through a lease accounting setup checklist to make things easier. Also, in order to ensure accuracy when determining and classifying a lease, users are provided with helpful pop-up menus that direct them through the identification process. The set-up list captures essentials, such as:
- Lease determination
- IBR/discount rate
- Lease classification
Make Sure You’re Capturing Helpful Metrics
Speaking of essentials, make sure the numbers you’re gathering are valuable. Once you’ve set up your reporting platform, make sure you’re capturing all of the required metrics you (or your superiors) need to make informed decisions.
These can include, but are not limited to, the following:
- Lease vs non-lease payments
- Initial/fixed/variable lease payments
- Compounding frequency
- Lease option declaration and payments
- Treatment of month-to-month lease payments
- Index rates for variable payments
- Lease modification events
Customize and Organize the Lease Accounting Report
From there, it’s a good idea to organize the data you’re capturing into a single customized report. The scope of these reports can range from portfolio-wide to a single lease. Here are some examples of report metrics you can include with Quarem:
- Journal entries
- Lease assumptions
- Lease Liability
- Book Value
- ROU depreciation
Make Sure Your Report Is Accessible
Finally, you want to make sure everyone on your team can access your report. (That means physical copies won’t work.) By using lease accounting software like Quarem to build your commercial real estate reports, you can have peace of mind knowing they’re accessible at any time, from anywhere, on any device. It’s all thanks to the security and convenience of the cloud.
If you’re interested in more best practices for building commercial real estate reports for lease accounting and other purposes, contact us today for a demo.