Key Takeaways:
- Decision Criteria: The selection of lease accounting software hinges on the jobs you want the tool to take off your plate. When viewed with that lens, the buying decision becomes much clearer.
- Benefits of Native NetSuite Integration: Native NetSuite solutions like NetLease offer streamlined workflows, greater control over your GL, and the ability to leverage other NetSuite tools.
- NetLease vs LeaseQuery: While both NetLease and LeaseQuery provide key lease accounting functionalities, NetLease stands out with superior reporting, dedicated accountant-led customer service, and extensive compatibility with NetSuite's suite of products.
Lease accounting software has become a vital tool for businesses looking to streamline their lease accounting and management processes given the complexity introduced to all companies due to the new accounting standard. Understanding what jobs these tools can perform for you is critical to making an informed decision. Certain features should be viewed as “table stakes” while others could be viewed as “outliers” that, when applicable, can greatly help your organization.
In this article, we will first review a few examples of those features and then see how NetLease and LeaseQuery’s native NetSuite product compare.
To navigate these complexities with ease, Netgain's NetLease offers a comprehensive solution. By automating compliance, simplifying reporting, and providing scalable management tools, NetLease empowers organizations to focus on strategic decisions rather than getting bogged down by lease accounting challenges.
Elevate Your Lease Accounting to the Next Level with NetLease
Unleash the full potential of your lease accounting with NetLease, the solution meticulously crafted for accuracy and compliance. Innovate your accounting practices and achieve unparalleled precision.
✓ Trusted Expertise
✓ Cutting-Edge Technology
✓ Personalized Support
Join the ranks of leading professionals transforming their lease accounting processes. Get started with NetLease now!
Table Stakes Functionality
A good lease accounting tool should enable you to do the following:
Easy access to the Amortization Schedule
That schedule is at the core of all Journal Entries and the reporting that will be produced in the software so having the ability to view it is key. Additionally, we have found this to be one of the most commonly requested items from Auditors. A key component of the table you should look out for is the ability to see the amortization of both the Lease Liability and Right of Use Asset.
Lease “Event” Automation
You should also expect your software to easily process and automate any lease modifications or terminations. These workflows are necessary anytime a lease is amended (think changes in key terms such as lease end date). The accounting calculations required when a modification takes place are complex and a key reason to use software. Any tool that cannot accommodate your needs easily would be suspect.
Automated Disclosures
The most basic, but also most critical job a lease accounting tool can take off your plate is the creation of financial statement disclosures. The required disclosures are difficult to complete manually and will be a know issue for you every year. A “good” tool should be able to take this job completely off your plate.
Outlier Features
The “Job requirements” referenced above will cover ~90% of work most companies have as it relates to lease accounting. That being said, there are other key roles that a lease accounting tool can play in your organization.
- Connection to the General Ledger: Automated posting to the General Ledger takes yet another step off your plate. Additionally, it adds transparency to the review process and can simplify audit procedures.
- Error Correction Assistant: Since adoption we have found that our most requested feature is a way to correct for prior errors in the current accounting period. This “true up” functionality eliminates an otherwise tedious process of either reversing and rebooking entries or manually creating a duplicate lease to continue the appropriate go-forward accounting. While we know accountants are close to perfect 😊, a tool that can make error correction an easier process is a lifesaver when needed.
- AI Powered Lease Abstraction: Following the prevalence of AI over the past year we have found many lease accounting tools to have implemented an AI powered lease abstraction assistant. These features, while still in their infancy, can really help you perform an initial review of a lease and call out key sections that will be relevant in the abstraction process.
NetLease for NetSuite Overview
NetLease for NetSuite is the initial product launched by Netgain. It is our most mature product and functions as a native lease accounting tool within NetSuite. I’m sure it won’t come as a surprise, this is a Netgain article after all, that all the functionality referenced above is included in our standard offering including some other key functions such as automated billing, foreign currency conversions and Multi-Book support.
Elevate your lease accounting process with Netgain's NetLease for NetSuite, the comprehensive solution designed to simplify complex accounting tasks. With features like automated billing, foreign currency conversion, and Multi-Book support integrated directly within NetSuite, it's the seamless, all-in-one tool your business needs.
LeaseQuery for NetSuite Overview
LeaseQuery is without a doubt a significant name in the lease accounting space. They have been a key provider for years and have seen a lot of success with their ERP agnostic tool. Separate from their ERP agnostic tool, the company has purchased a NetSuite specific application. While not their core product, this application functions as a native lease accounting tool similarly to NetLease for NetSuite.
Comparing both Products
Both tools will provide you with the basic functionality needed to handle your lease accounting. A key feature that makes both products stand out is the ability to post directly to your General Ledger. However, there are a few key areas where they differ.
Reporting
The primary reason companies have left LeaseQuery’s NetSuite tool for NetLease is due to their reporting capabilities in NetSuite. Users have reported limitations in the tools ability to generate the required disclosure tables automatically.
Customer Service
Netgain is a company that was started by accountants and run by accountants. Our customer service team includes 20+ accountants with public firm experience. That team also runs our implementations so they are all well versed in our products. Overall LeaseQuery has a strong commitment to user support and training; however, because their native NetSuite application is not the Companies core product we have been given the feedback that knowledge of their NetSuite product is more limited.
Compatible products
A final note of comparison is within the compatibility of these tools to other NetSuite products. NetLease can support features such as automated billing by plugging directly into SuiteBilling. Another benefit of NetLease is the tools compatibility with NetGain’s other NetSuite products covering key accounting areas such as month-end close, asset depreciation and loan accounting. LeaseQuery for NetSuite is a standalone lease accounting product and does not function with “sister products” such as those mentioned above.
Final Thoughts
When selecting lease accounting software, it's important to consider both the fundamental and advanced features that can streamline your lease management process. The choice between NetLease and LeaseQuery should be informed by your specific needs, including the complexity of your lease portfolio and the value you place on customer support and product compatibility. NetLease, with its robust reporting capabilities, accountant-led support team, and compatibility with other accounting modules in NetSuite, appears to be a compelling option for businesses looking for a comprehensive and efficient lease accounting solution within the NetSuite platform.
On the other hand, LeaseQuery's reputation and success in the lease accounting space cannot be overlooked. Its ERP agnostic approach may appeal to organizations seeking flexibility. However, for NetSuite users, the limitations in reporting and less specialized support for its NetSuite-specific tool could be deciding factors. Ultimately, the choice between these two solutions will hinge on a company's individual requirements, priorities, and the strategic value they expect from their lease accounting software in not just meeting compliance needs but also adding efficiency and insight into their financial processes.
For those seeking integration with NetSuite, coupled with powerful reporting and AI-driven lease management, NetLease by Netgain offers a sophisticated solution.
Questions To Ask In Your Demo
Amortization Schedule Access: Can you show me how to access the amortization schedule for both the Lease Liability and Right of Use Asset within your software?
Day 2 Activities: How does your software handle lease modifications or terminations, and can you show an example of this process in action?
Disclosure Reporting: Could you walk us through the process of generating financial statement disclosures automatically with your tool?
General Ledger Integration: How does your software integrate with the General Ledger, and can you illustrate the process of automated posting?
Error Correction: If I uncover an error in my lease inputs what options do I have to correct that if accounting had already been run on the lease?
Lease Abstraction: Does your tool have a lease abstraction assistant, could you include that feature in your demo?
Reporting Capabilities: Could you showcase the reporting capabilities of your software, especially how it generates reports on lease provisions such as renewal options?
Customer Service and Support: Can you explain the structure of your customer service team and how implementation support is provided, particularly highlighting the experience of team members?
Compatibility with Other Tools: Does the software work with other NetSuite products like SuiteBilling, and what additional functionalities does this provide?
Product Differentiators: What do you believe sets your product apart from competitors?
Sources:
- Jones, P. (2021, July 12). How this Startup Uses AI to Automate Lease Accounting. https://www.techtimes.com/articles/262776/20210712/how-this-startup-uses-ai-to-automate-lease-accounting.htm
- Lease accounting: The opportunity beyond compliance. (2018, April 2). https://www.genpact.com/insight/lease-accounting-the-opportunity-beyond-compliance
- Rashty, J. (2018, September 19). An Analysis of the New Sale and Leaseback Guidance. https://www.cpajournal.com/2018/09/19/an-analysis-of-the-new-sale-and-leaseback-guidance/
- Singer, R., Pfaff, A., Winiarski, H., & Winiarski, M. (2017, August 23). Accounting for Leases Under the New Standard, Part 1. https://www.cpajournal.com/2017/08/23/accounting-leases-new-standard-part-1/
- Smith, B D. (1982, January 1). Planning models in the leasing industry. Omega, 10(4), 345-351. https://doi.org/10.1016/0305-0483(82)90013-5
- Strauss, N., Siegel, M., LaMonte, M., Thuener, A., Taub, S., & Kalavacherla, P. (2018, August 27). Implementing the New Lease Accounting Standards - The CPA Journal. https://www.cpajournal.com/2018/08/27/implementing-the-new-lease-accounting-standards/
