Since ASC 842 and IFRS 16 moved leases onto the balance sheet, a single misclassified contract can throw off your reported liabilities by millions. For corporate occupiers managing hundreds of leases across regions, the margin for error keeps shrinking and auditors are paying closer attention than ever.

Strong internal controls are what stand between clean financials and a painful restatement. Here’s how to build them.

Start with a single source of truth

Spreadsheets fail at scale. When lease data lives in disconnected files, version control breaks down, formulas get overwritten and no one can say with certainty which number is current.

Centralize every lease in one system. A shared repository gives your accounting, real estate and finance teams the same figures to work from, so a renewal negotiated by real estate flows straight into the numbers finance reports. Yardi Corom lease accounting software brings these functions together, connecting lease administration with accounting so that a change to a commencement date, a rent escalation or an early termination updates your liability schedules automatically. That means fewer manual handoffs and fewer places for a stray keystroke to hide.

Separate who does what

One person should not enter a lease, approve its accounting treatment and reconcile the results. Segregation of duties is a basic control, but it’s easy to let slip when a team is short-staffed and deadlines loom.

Assign clear roles. The person abstracting lease terms should be different from the person reviewing the classification, who should be different again from whoever signs off on the journal entries. Build these checkpoints into your workflow so approvals are required, not optional.

Standardize your lease abstraction

Most accounting errors trace back to bad inputs. A discount rate applied inconsistently, a renewal option misjudged, a variable payment logged as fixed – each one distorts your right-of-use asset and lease liability from day one.

Create a documented process for pulling terms from every contract. Use templates. Require a second reviewer for high-value leases. When a modification comes through, treat it with the same rigor as the original abstraction rather than a quick edit.

Reconcile on a schedule, not in a scramble

Waiting until year-end to reconcile is asking for surprises. Monthly reviews catch discrepancies while they’re small and traceable.

Compare your lease liability roll-forward against your general ledger every period. Flag variances. Document the explanation. This habit turns audit season from a fire drill into a formality, because the work is already done and the trail already exists.

Keep the audit trail intact

Auditors want to see not just the numbers but how you arrived at them. Every change to a lease record should be time-stamped and attributed, with supporting documentation attached.

Systems that log activity automatically capture this for you. When you can show an auditor who changed a lease term, what the old value was and the exact date it happened, you replace hours of evidence-gathering with a few clicks.

Internal controls aren’t about adding bureaucracy. They’re about earning confidence in your numbers, so you can close the books, satisfy the auditors and get back to running the business. Yardi Corom lease accounting software builds these controls into your daily workflow, giving your team one trusted place to abstract terms, route approvals and generate the schedules and audit trails your auditors expect.

Yardi Corom is built for CRE tenants managing exactly this kind of complexity. It handles both lease types under ASC 842, IFRS 16 and GASB standards, centralizes lease and sublease data and integrates with your existing financial systems. If you’re ready to move beyond spreadsheets, visit our website or schedule a meeting with the Corom team.