Setting up any kind of schedule can be a bit overwhelming if you don’t know where to start. Whether it’s an activity schedule for the kids, a meal plan or commercial real estate accounting, there are certain things you can do to make the process more manageable.
Preparing a lease amortization schedule for commercial real estate lease liability can especially be an overwhelming task. But we’re here with some tips to make this ordeal easier.
1. Ditch the Spreadsheet
Other articles about setting up a lease amortization schedule may tell you to start with a spreadsheet, but we’re going to advise the opposite. Spreadsheets are quickly becoming an obsolete method of tracking any form of data in commercial real estate (and any industry, really.) Instead, invest in a lease amortization tool or CRE software with lease amortization features. We’re confident that even those who might initially scoff at the expense will be able to see the savings right away in the amount of time, human error and sanity they save. After all, spreadsheet technology’s greatest appeal was a solution for efficiency, so why would you not consider pursuing an even more efficient tool for your needs?
2. Make Sure Expenses and Liabilities are Accurate
It’s also important to make sure your data is as accurate as possible. This is difficult to do with traditional lease amortization data entry methods for expenses and liabilities. Ask yourself the following questions:
- Is my expense formula correct? What about my liability formula?
- Have I recorded number periods and cash payments correctly?
- What about liability reductions and balances? Are they accounted for?
- Did I remember what I need for remaining liability balances?
(Of course, you don’t have to think about any of this with the right CRE lease management software, as it crunches all of the numbers for you in an automated process on the back-end.)
3. Don’t Forget Hypotheticals or Goals
There are certain unknown variables involved with liability balances, which can directly impact your goals. That’s why it’s important to factor in unknown events and hypothetical scenarios in your lease amortization planning. Make sure you account for this regardless of the lease amortization approach you’re considering.
4. Stay Updated About the Latest Lease Accounting Trends
Finally, it’s important to stay up to date about the latest lease accounting standards and best practices. Staying tuned to this blog is a great place to start, but even better is investing in CRE lease amortization software that gives you note-taking abilities, challenge-tracking and easy organization of obligations, risks and opportunities. To stay updated about the latest lease accounting trends, it doesn’t get any easier than using the right CRE software program.
If you’re interested in seeing how Quarem helps with everything related to lease amortization, request a demo today.
