The transition to ASC 842 is inevitable. If your business hasn’t already made the shift, preparation is essential. Lease-related data gathering and processing are complex tasks, and the updated regulations are unlikely to win popularity among the teams who have to manage them daily. The increased requirements for collecting detailed data on operating lease liabilities present a challenge, especially for private companies that may lack in-house capacity.

To support this transition, SOFT4Lessee has prepared a practical guide on how to simplify and streamline data gathering for ASC 842 compliance.

Begin by implementing a clear data gathering process

It all starts with a well-defined process. Without structure, your accounting staff is likely to struggle more than necessary. Management and senior accountants should understand the upcoming challenges and proactively design workflows to overcome them. A well-organized team can handle lease liability calculations more efficiently and deliver better results from day one.

Start by sorting and grouping existing lease agreements. Categorizing leases by complexity helps distribute workloads more evenly, allowing senior staff to focus on high-priority or high-risk items. Next, break down lease data into logical sections and link related data points - for example, connecting termination options or purchase clauses to specific contracts.

Modern accounting software such as SOFT4Lessee includes built-in features that can automate many aspects of lease liability accounting under ASC 842. It can help you update records, identify missing data, and establish accurate relationships between contract terms and accounting figures.

This process should be created in close collaboration with your accounting team.

Focus on both current and future contracts

It might seem logical to design your new process only for future contracts, but doing so ignores the immediate need for accurate, complete data on existing leases. Effective operating lease liability management requires full attention to your current contract portfolio - not just what’s coming next.

If your new processes are only expected to pay off years down the line, that’s a missed opportunity. You should aim for improvements that bring value both now and in the future. Accounting is built around standardized tasks, and it isn’t easily changed. Since accounting departments rarely generate direct added value, cost-efficient improvements should begin immediately, not years into the future.

Start by conducting an internal audit of your existing contracts. You may discover outdated calculations, inefficiencies, or overpayments - for example, costs you’re covering that should be the responsibility of your clients. Depending on your lease portfolio size, cleaning up these issues could save your company tens or even hundreds of thousands.

Allocate enough resources from the start

As mentioned, lease data gathering is a labor-intensive process that requires accuracy, attention to detail, and specialized knowledge. While automation through tools like SOFT4Lessee helps reduce the burden, not everything can be handled automatically.

All departments involved in lease-related activities - accounting, procurement, IT, legal - should contribute to the transition. Their input is essential for building a complete picture and ensuring efficient implementation.

How many resources are enough? In some cases, more than you currently have. That’s why many companies bring in external consultants or third-party solution providers during a transition. Fortunately, most modern software vendors, including SOFT4Lessee, offer onboarding support and training for your staff. This can eliminate the need for expensive outside consultants while still ensuring a smooth rollout.

Utilize software to simplify ASC 842 compliance

In today’s business environment, digital tools make complex processes easier. One of the biggest advantages of software is its ability to streamline data processing and management - which is exactly what’s required for ASC 842 compliance.

Software solutions like SOFT4Lessee are designed specifically for companies managing lease portfolios. With built-in calculators, SOFT4Lessee automates many of the manual steps involved in lease liability accounting, while ensuring full compliance with ASC 842. It’s cloud-based, which means you can implement it with minimal or no system downtime. This allows your team to continue collecting and processing data without interruption.

SOFT4Lessee includes modules for tracking both current lease information and future financial estimates. Your accounting staff can input data manually, or automate calculations to support risk assessment, cost forecasting, and long-term financial planning. It offers flexibility and accuracy, which are essential in today’s fast-changing regulatory landscape.

Final thoughts

Transitioning to ASC 842 doesn’t have to be overwhelming. With the right structure, resources, and tools in place, your business can achieve compliance while gaining better control over lease data and financial reporting.

Solutions like SOFT4Lessee are designed to support this journey - reducing manual effort, minimizing risk, and helping your team make smarter decisions.