It’s no secret that risk is inherently associated with commercial real estate. Tenants are at risk of defaulting or missing payments. Interest rates are a risk of increasing sharply. Certain markets and sectors are at risk of being eliminated.
This is why ASC 842/IFRS 16 compliance is so important.
If you don’t have a solid foundation or don’t maintain certain standards with your accounting practices, you’ll be at risk. Fortunately, lease accounting software makes it easier and mitigates risk. Let’s go over a few ways it accomplishes this.
Better UX = Fewer Mistakes
When it comes to lease accounting software, the only types of errors you’re usually going to encounter are data entry errors or human errors. It’s easier to make these types of errors when recording your data if the software you’re using is cumbersome, confusing or difficult to navigate. (e.g. “Is that the field I use?” “How can I double-check this interest rate?” “I’ll just estimate these market numbers.”) Lease accounting software that prioritizes UX/UI (user experience/user interface), however, will lead to a more intuitive, easy-to-use experience with fewer risks.
Robust Data Management Features
Your ability to mitigate risk is often limited by your data management capabilities. If you’re trying to gauge which properties in your portfolio are more at risk than others, for example, your lease accounting software should give you clear and concise information for easy decision-making. With lease accounting software like Quarem, you can organize your properties into lists based on risk or filter them based on risk tiers for a clear understanding of your portfolio’s overall exposure to risk. The customization options are plentiful.
Risk and security go hand-in-hand. If the lease accounting software doesn’t give you peace of mind about protecting information—that means yours, your company’s and your tenants—then it’s probably not mitigating risk appropriately. Your lease accounting software should have state-of-the-art security protocols in place. With Quarem, all changes made to the data are tracked in an activity log with time/date/author stamping. Additionally, strict access rights are in place to give you full control of who can manage the data.
Finally, accurate reporting and software transparency will help you mitigate risk. The more eyes on your numbers, the better accountability you’ll have and the more likely you’ll be able to catch mistakes, errors and other potentially problematic information. Quarem prioritizes transparency, which is why it’s easy to customize and share dashboards, as well as other portfolio information. Transparency equals tranquility.