Accounting is often seen as a profession focused on the past, meticulously recording and reporting financial activities that have already occurred. While finance predicts the future and operations manage the present, accountants diligently keep the financial records.
Generally, this role suits them well, serving as the recordkeepers of financial transactions. However, challenges arise when documents like invoices or contracts are delayed, arriving after the financial period has closed, leaving accountants to grapple with how to accurately report past transactions.
Imagine the convenience of an “Easy” button for these situations—a magical solution to instantly generate and prepare all necessary journal entries to record the missed accounting activity for those late documents. Well, for lease accounting at least, this is no longer a fantasy.
FinQuery has once again demonstrated its dedication to innovation and excellence by introducing catch-up functionality for lease accounting. This cutting-edge feature simplifies the recording of missed leases and lease changes. It makes the daunting task of post-transition lease accounting more manageable, efficient, and precise, showcasing FinQuery’s commitment to transforming complex finance practices with simple and effective solutions.
The challenge of missed leases and lease changes
In the world of accounting, timeliness is critical. Yet, it’s not uncommon for new leases or lease changes to not be recorded in the period in which they became effective. Whether due to administrative delays, lost documentation, or simple oversight, these missed entries can create significant challenges for accountants. The repercussions can be far-reaching, affecting financial results, compliance, and the audit. Additionally, it can be an arduous task to track down and accurately record these missed transactions.
Before, accountants had to manually calculate the necessary adjustments, record separate journal entries for each affected period, create reconciliations and update financial reports for any late lease document or change. This process was not only time-consuming but also prone to errors. With multiple complex calculations involved in lease accounting, mistakes could easily occur, leading to inaccuracies in financial reporting. Furthermore, these tasks were often performed in addition to other close responsibilities and required within tight deadlines.
Why catch-up lease actions matter
The introduction of catch-up lease actions addresses these challenges head-on. This feature allows accountants to enter a lease or a lease change effective in a prior period after that period has been closed and have the system generate a one-time cumulative catch-up journal entry, seamlessly updating existing financial records. Whether this missed lease is discovered and recorded one week or several months after the actual date, LeaseQuery’s catch-up lease actions will ensure all financial data is up-to-date and compliant.
What sets LeaseQuery’s catch-up functionality apart
LeaseQuery’s functionality for catch-up lease actions takes automation and efficiency one step further by also generating a reconciliation report of the catch-up adjustments, in addition to automated calculations and journal entries. This feature is a significant benefit because the additional reporting options enable accountants to effortlessly reconcile their previous period-end account balances without the missed lease or missed lease change to the updated account balances, showing the account balances as they would have been, had the lease or lease change been recorded in the correct period.
This enhanced reporting provides accountants, and most importantly, their auditors, a clear and easy-to-follow path from the original balances to the revised figures. Anyone who has been through a financial audit understands the time savings of having a system-generated reconciliation report available with the push of a button.
The benefits of automated catch-up accounting
Efficiency
The catch-up lease actions functionality significantly increases efficiency by automating the process of calculating and recording the entries for missed leases and missed changes. This reduces the time and effort required for accountants to manually adjust the appropriate account balances and related financial reporting, allowing them to focus on more strategic tasks.
Accuracy
By calculating the precise catch-up journal entries necessary, LeaseQuery’s catch-up lease actions functionality ensures all financial data is accurate and significantly mitigates the risk of error — from both miskeying information or incorrect calculations. More accurate calculations and journal entries enhances the reliability of the financial statements.
Compliance
Compliance with accounting standards is critical for any organization. The catch-up lease actions feature helps maintain compliance with current lease accounting standards, reducing the risk of non-compliance and potential penalties.
Easy to audit
Not only will the catch-up functionality automate a previously painful manual process, the accompanying reporting features create a trail that is easy for auditors to follow. This alleviates the stress of preparing for an audit, but also ensures a smoother and quicker review process.
Real-world impact
To understand the full potential of the impact catch-up lease actions can have on lease accounting processes, look no further than its swift adoption by LeaseQuery customers. Within the first week the functionality was released, a non-close week, over 450 leases were caught up, and approximately 60 clients utilized the functionality. LeaseQuery’s founder and CEO, George Azih, also known for his passion for leases, describes it as revolutionary and a game-changer, highlighting the transformative potential of this feature for accountants and organizations alike.
But this is for companies already using lease accounting software. Imagine the significance automating these kinds of adjustments could have on organizations currently accounting for leases manually with spreadsheets. The potential is limitless.
Conclusion
By leveraging LeaseQuery’s new catch-up lease actions, accountants can finally have that “Easy” button they’ve always wished for. This innovative feature simplifies and streamlines the complex task of post-transition lease accounting, providing significant benefits in terms of accurate, compliant, and easy-to-audit financial records.
For accountants and controllers looking to streamline their lease accounting processes, LeaseQuery’s catch-up lease actions offer a powerful solution. Embrace this revolutionary functionality and experience the future of lease accounting today.
To learn more about LeaseQuery’s catch-up lease actions and other innovative features that simplify the complex, visit our website or contact us at info@finquery.com.
