Lease accounting is a process that is crucial to the financial well-being of any particular company. Depending on the accounting standard that you’re on (whether it’s AASB 16, ASC 842, IFRS 16 or other) or the one you’re transitioning to, your enterprise is going to need a lot of manpower and/or great tools to make everything work. A lease calculator seems like a viable solution at first. But along comes dedicated lease accounting software and systems that could very well outperform the calculators. Is this true? Well, we have at least 5 reasons that prove why an accounting system is superior to a calculator.

1.   It helps manage payment & lease liability better

A calculator is a one-dimensional tool that only works with a fixed range of inputs. Besides, it can’t store data. When it comes to dedicated accounting software, the latter is much more sophisticated than the calculator. The software allows the user to calculate fixed inputs and view adjustments to liability, asset value, produce G/L postings in real-time, etc.

2.   It’s more manageable

Most of the time, a calculator is just a tool that you can use for free. You cannot deny that they get the job done on a superficial level, but most calculators are Excel-based or super simple instruments that fail to meet the real needs of a business. This does not allow for easier data flow management within the company, as opposed to having an accounting system.

3.   It’s supported

Support is a feature that most businesses and private buyers tend to undervalue. However, support and help are crucial, especially when the enterprise is trying to transition, into AASB 16 standard accounting. When you begin using new software to oversee lease payments or asset valuation, etc., you’re going to need some support or assistance to help with the setup. Besides, if something stops working, you will need that fixed, ASAP.

Here is where support and service come into play. Nobody wants issues with their accounting, not to mention with regards to liability as a public company. But if they do happen, you cannot waste any time. Thus, support is definitely worth paying for.

4.   It’s best suited for your accounting standard

You generally have calculators that are shallow do-it-all’s. What we mean is that a calculator might be tailored to be able to cover the same basic features and functions of your most popular accounting standards – IFRS 16, AASB 16, ASC 842, etc. The software might be limited to one standard, but that’s a big pro. Quality over quantity in this case.

Managing accounting according to one standard and having all of the necessary metrics and data on hand is much more beneficial than having a lot of information that isn’t as useful.

5.   Data import/export

It’s true – pretty much no business does their accounting without Excel or other dedicated web services. However, managing the lease accounting data can become extremely difficult if the process needs to cover information from different systems and/or applications. This is why a dedicated lease accounting system is excellent. They allow you to import Excel or other file formats and import the available information. The interface is tailored to make lease liability, lease agreement, report generation and other related tasks, all that much easier.