Lease administration is a critical business function as it plays a key role in helping organizations stay on top of their lease portfolios. The goal is to reduce the risk of missing critical dates and payments and meet all legal and regulatory requirements as far as the leases are concerned. This blog discusses 7 ways to make your lease administration function more efficient.
Accurate lease abstracts
Lease abstraction is the process of extracting critical data which involves obligations. Your lease administrators rely on the abstracts of your leases. Lease abstracts provide a quick overview of the key financial and non-financial clauses of your lease. If your lease abstracts are inaccurate or fail to capture critical information, your lease administration won’t be efficient or accurate. The end result could be monetary losses running into thousands of dollars.
Full compliance with lease accounting standards
The recent accounting standards mandate the abstraction of additional data points, which may mean that leases need to be abstracted again. If you don’t have the resources for this one-time re-abstraction of your leases, your lease administration function will be affected. Additionally, non-compliance will attract penalties.
Have a strong lease administration process in place and evaluate it from time to time
Developing and implementing an effective lease administration process is important for the successful functioning of the lease administration department. Equally important is the consistent evaluation of the processes. This exercise is important to ensure the steps involved are not redundant and are producing the desired results without losing any critical information.
Invest in the lease administration software that’s right for you
Investing in a lease administration software is a must to stay on top of your lease portfolio and for efficient ongoing lease management. While there’s no doubt that lease administration software programs are indispensable, things start to get a little tricky when it comes to selecting a lease administration software.
Click here to learn more about the top 10 lease administration software programs of 2022.
Hire the right people!
Lease administration is an important process helping you stay on top of your lease portfolios. Typically, when we come across the term, lease administration, one of the first things that comes to mind is Common Area Maintenance (CAM) audit and reconciliation. However there’s a lot more to the lease administration process than just CAM reconciliation and lease audits. While CAM reconciliation is one the core tasks and most time-consuming, there are other equally important processes that are a part of lease administration. Outsourcing your lease administration process or looking to hire a lease administrator? Make sure your new lease administrators are adept at all of the above services and not just CAM!
Have lease translators on board, if need be
If you are a retailer with a lease portfolio that extends beyond the US borders, you also need to consider using ther services of a lease translator. Global lease abstraction projects require robust language translation capabilities and the ability to understand the various regional nuances. For example, not all English leases are the same. There will be differences in the language and their interpretation from region to region, such as between the US and UK. So, while the language is the same (English), regional nuances and knowledge of the legal terminologies pertinent to the country come into play when abstracting the lease.
La team isn’t siloed
Lease administration team’s role has broadened considerably as a result of the additional tasks that previously fell under the purview of the legal, accounting, and finance department. But to accomplish these additional tasks, there is a need for transparency and coordination between the lease administration department and all other departments. A lease administration team that works closely with these other departments will be much more efficient and effective than one working in silo
Rebolease.com, powered by RE BackOffice, Inc., is a premier provider of lease abstraction, administration, audit and accounting services. Headquartered in Pittsburgh, PA, we are a global boutique firm, providing high-quality services to top-tier clients across industry verticals, covering every type of lease and on any lease platform. We are proud to be a trusted partner, for 15+ years, to leading retailers, REITs, property owners/managers, and corporate accounts seeking a strategic advantage. All client projects are performed in-house.