Maintaining an accurate lease portfolio is essential for organizations managing real estate assets or equipment under lease agreements. With evolving accounting standards such as ASC 842, IFRS 16 and GASB 87, the need for accuracy, compliance and timely reporting has never been greater. An organized and up-to-date lease portfolio can mitigate financial risk, improve decision-making and ensure regulatory compliance. Here are the best practices to follow.

Centralize Lease Data

One of the most fundamental practices is to consolidate all lease-related documents and data into a single, centralized repository. Disparate systems, spreadsheets or paper-based processes increase the risk of errors and omissions. Utilizing lease management software or an enterprise resource planning (ERP) system helps ensure consistency, improve visibility and streamline audit trails.

Standardized Data Entry and Terminology

Lease data should be entered using consistent terminology, units and formats across the portfolio. This reduces confusion and simplifies comparison, reporting and compliance reviews. Create standard templates and glossaries to ensure uniform data entry and train relevant personnel to follow these standards.

Implement a Regular Audit Schedule

Periodic internal audits help verify that lease data remains current and accurate. Conduct quarterly or biannual reviews to identify expired leases, changes in lease terms or discrepancies between contract terms and recorded data. These audits should include document validation, payment reconciliation and assessment of accounting entries.

Track Key Dates and Milestones

Missed renewal options or termination dates can have significant financial implications. Use automated alerts or calendars to track key dates, such as lease start/end, renewal windows, rent escalations and option deadlines. This proactive approach helps avoid unwanted renewals or penalties.

Ensure Cross-Department Collaboration

Lease management often involves multiple departments, including accounting, legal, facilities and procurement. Establish clear roles and responsibilities for each group and encourage regular communication. Cross-functional alignment reduces the chance of missing critical updates and ensures decisions are made with full context.

Stay Updated with Accounting Standards

Lease accounting standards continue to evolve and it’s crucial to stay informed about changes that can impact how leases are recorded and disclosed. Engage with financial advisors, attend webinars or subscribe to updates from regulatory bodies. Being proactive ensures your organization remains compliant and avoids restatement risks.

Leverage Technology for Automation and Reporting

Modern lease management software can automate calculations, generate required disclosures and flag inconsistencies. These tools also help in generating real-time reports for management review and external audits. Automation reduces manual entry errors and saves time during reporting cycles.

Train and Educate Stakeholders

Continuous training ensures that stakeholders understand the importance of lease accuracy and stay updated on tools and processes. Empowering staff with knowledge reduces dependency on a few individuals and builds organizational resilience.

Conclusion

An accurate lease portfolio is a vital asset that supports financial transparency, compliance and strategic planning and implementing lease management software, like the one provided by Yardi Corom, can significantly help. By centralizing data, standardizing processes, leveraging technology and fostering collaboration, organizations can efficiently manage leases and adapt to regulatory demands. Implementing these best practices helps minimize risk, improve operational efficiency and support long-term success.

Yardi Corom is a comprehensive and user-friendly accounting, lease and workplace management solution for CRE tenants. Our cloud-based software solution increases efficiency and accuracy across your entire lease portfolio: manage leases and subleases, track key lease data, centralize transactions and become FASB/GASB/IFRS compliant. To learn more, you can visit our website or schedule a meeting with our team.