7 ways how lease accounting software benefits your business versus excel calculator
Regardless of your business model, approach or values, cost-cutting and streamlining processes are a must. Accounting is one area where the latter two are particularly important. It seems logical to cut costs by going down the simplest route and using Excel sheets for accounting. But in the real world, when preparing complex financial statements, managing lease payments and other related operations, dedicated lease accounting software just has a significant edge. All things considered, purpose-built lease accounting software outperforms Excel (which is sometimes called a lease calculator). Don’t think twice before choosing dedicated apps over regular Microsoft software. Here are 7 reasons why.
1. Lease accounting software is already fully developed
If you represent a very small business and have less than 10 leases, yes, an Excel calculator might be sufficient. But only for a while. However, companies that are serious about accounting should factor in the fact that developing a fully functioning Excel document for accounting can take tens or hundreds of hours.
You need to manage criteria like lease liability, calculate variables. The file also needs to offer visual aids for the accountant to make the work more manageable. Data import mustn’t be overlooked, which in Excel is challenging. More on that – later.
So, any ASC 842, IFRS16 or AASB 16 Software or dedicated applications for your accounting standard are already prepared to handle all of your tasks. Most software has so much flexibility and is ready-to-use right away. Even the most flexible Excel templates will need constant updating and tailoring to keep up-to-date. It just costs too much time and won’t outweigh the simplicity of purchasing a calculator/software license in even the longest of long runs.
2. Data flow management
If you use Excel, it is super tricky to make documents ready-for-contributions from the outside, which means that you won’t know whoever made specific inputs, when they were made, etc. If all goes well and doesn’t need fixing, it may seem not too much of a bother. However, improving and revising documents is an inseparable part of the accountants’ job. Thus, simplified audit and data input management are crucial.
Excel doesn’t keep a thorough record of inputs and changes while dedicated software usually has that feature integrated.
3. IFRS 16, AASB 16, ASC 842 accounting software covers multiple needs
Generating invoices, financial statements, other reports or preparing miscellaneous documents for the bank, for an audit or a potential client, investors, the public, etc. Doing all of these things with Excel is a dead-end. On the other hand, dedicated ASC 842, AASB 16, IFRS 16 software or any other type of accounting tools will definitely have you covered!
You need a lot of separate templates and ready-made scripts integrated into Excel just to generate parts of professional reports. Accounting software usually has one-click or very user-friendly solutions for generating or even sending out invoices, etc.
4. Editing data inputs on the go
If you have a large Excel file on your hands within the organization network (and accounting files are usually huge), editing them with a mobile device or a tablet can be compared to finding a needle in a haystack. The file will take so long to load, and inputs will be so hard to make, that accountants usually don’t even bother to do alterations on the go. But what about those situations when something comes up, and they just aren’t at their work station?
Luckily, most accounting software is optimised for handheld devices and remote inputs. In today’s world, having important company data without remote access from handheld devices is a very short-sighted approach from the business standpoint.
5. Lease payments and all essential figures in one place
Some businesses who try and make work of Excel, create multiple Excel files. There are separate files for every single operation niche. For example, you have one file for salary payments. There’s another spreadsheet for lease payments and tens more just to have all important areas covered. Just imagine the “excitement” and “happiness” of an accountant who has to piece together data from multiple documents. It gets even more challenging when he or she has to backtrack in order to fix a wrong input.
Accounting software is already prepared for such work. The user-friendly interface maximises the convenience of the accountants.
6. Dedicated software allows task assignment and offers interactivity
If you compare MS Excel with professional accounting software, one thing could grasp your attention. One of the biggest drawbacks of Excel calculator is that it lacks proper task assignment and has very limited interactivity. It’s like a one-size-fits-all solution to cover the basic needs of every user. Still, it doesn’t have the depth and convenience as dedicated software.
So, task assignment can be immediately noted and taken care of by the responsible personnel. Some apps will even pop notifications to responsible accounting staff to take care of the necessary objectives. Furthermore, most accounting software, regardless of the standard, whether it is AASB 16, IFRS 16 or ASC 842, is very interactive. It is important for the accountant and simplifies their job.
7. Data import from external sources
If you do every input by hand, you increase the risk of making an uncalled for mistake. It’s much more sensible to just import data from external sources. With Excel, you can use the good ol’ Copy + Paste combo, but formatting and putting everything in the right place afterwards can take forever.
Accounting software is smart in that regard. You can import files from the web, Excel spreadsheet data and .xml format files. Formatting and editing are thus, much simpler. This is because most accounting apps interface with other popular software related to accounting, payment liability management, finances, etc.
This plays a huge part when transitioning from one software from another (e.g. from Excel to professional accounting tools). The difficulties are reduced, and the process can be much more straightforward, smoother and help the transition to finish quicker.