Accuracy is key in accounting. Reconciliation reports are essential in lease accounting to ensure that the ROU assets and lease liability accounts, which are listed in the balance sheet, are correct. They are built using the transactions recorded in the general ledger of each company to show whether tenant charges are paid according to actual expenses for that year. And while these reports can be created through Excel, lease accounting software makes the entire process easier, quicker and free of errors. Here’s how lease accounting software can help with reconciliation reports.

Automated Preparation

Usually, the reconciliation report is created manually by a company’s accounting team. All the data regarding the lease, such as the property, ROU asset and the lease liabilities must be listed in an Excel spreadsheet in order to be analyzed. However, all this information must be gathered from every individual contract’s amortization schedule to find the monthly balance for both the ROU asset and lease liability. And once all the information is introduced in the spreadsheet, calculations must be performed to determine the total values for the ROU asset and lease liability to determine if they are the same. Essentially, these reports are created to resolve any differences or issues relating to the amount owed and the amount paid by the corporate occupier to the corporate real estate owner.

However, with the help of lease accounting software, all this can be done automatically. Not only are all the contracts and data stored in the software, but the report can be generated automatically, and all calculations are done quickly and accurately.

Facilitate Documentation and Approval

When done manually, the reconciliation reports must include all spreadsheets and documentation to prove that the numbers provided for the ROU asset and lease liability are justified and correctly reported on the balance sheet. Once gathered, these materials need to be thoroughly reviewed and approved. Lease accounting software accomplishes the same review and approval tasks but does so in a much easier and accessible way. All the documents are stored in the lease accounting software and the approval process can be automated allowing for a faster and more efficient procedure.

Save Time and Create Ad Hoc Reports

Having a centralized system that groups and sums balance sheet account totals is essential for quicker delivery of monthly reconciliation reports. Furthermore, with the help of lease accounting software, the information used for reconciliation reports, as well as other information available in the system, can be used by accountants to generate other reports that may be needed. This allows accountants to generate ad hoc reports for any period, or multiple periods, using the data relevant to the report. This is beneficial in the case of a last-minute request or change in the time period of a reconciliation report. Lease management software allows for this to be done accurately and efficiently.

Lease accounting software is one of the most beneficial systems to consider investing in when it comes to creating reconciliation reports. This means, however, that the software, like that provided by Yardi Corom, should have integrated reconciliation software. All lease data is stored in a single database, and it can be accessed and processed easily. This ensures that all tasks associated with reconciliation reports can be done automatically, efficiently and without any errors.

Yardi Corom is a simple and comprehensive 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.