Operating and finance lease is quickly becoming a popular alternative among businesses to acquire essential equipment, vehicle, property, and digital initiatives. As the use of technology continues to penetrate all fields of business, it is helping more companies streamline their leasing processes to facilitate lessees, lessors, investors, and financial managers. A seamless user experience from finance and leasing companies has become important to customers. Lease management systems provide convenience and improved assistance to both customers and investors in a variety of ways. Here are some important uses and benefits of technology in streamlining leasing processes:
Increased Transparency
The implementation of ASC 842 in lease accounting software has resulted in increased transparency between investors and customers and strict compliance with financial accounting standards. These leasing standards aim to increase debt transparency and prevent fraudulent transactions and financial statement fraud by both lessees and lessors. These standards propel lessees to record their operating leases on balance sheets. Using technology, regulatory authorities, leasing companies, and renting businesses can easily track and monitor leased equipment and property and prevent both lessees and leasing companies from hiding liabilities and leased assets. Unlike conventional IFRS 16 standards, ASC 842 requires companies to fulfill specific conditions that help identify whether the lease is an operating or finance lease, as well as which category of assets and liabilities the lease falls under. An ASC 842 lease accounting software like EZlease ensures that companies capitalize leases and show them as right-of-use (ROU) assets or lease liabilities.
Improved Communication
Technology has provided an Omni-channel communication infrastructure for businesses to increase communication with lessees. The key to increased visibility on ongoing leases or potential lease opportunities for both investors and lessees is to remain consistent in communication with each other. Many lease companies provide a centralized communication system that consolidates communications from all channels on a single platform and in sequential order. This helps investors streamline their processes, remember important information, and keep track of customer concerns.
Simplify Application Procedures
Web-based applications, mobile technology, and online banking have collectively made it possible for funding companies to simplify their leasing processes. Technology has allowed lessees to choose the most convenient option for completing the application process online or on-site. The lessee can use websites, mobile apps, and web-based applications to choose the equipment, vehicle, or property they need and apply for a lease after providing personally identifiable information over secure communication channels. They can easily pay any application fees or processing costs and access promotional materials on spot. Centralized systems also allow lease companies to verify customers’ information and retrieve their debt history and ratings to prevent fraud before granting a lease.
Greater Insight into Changing Market Trends
Market analysis software or embedded modules assist leasing companies in staying in touch with changing marketing trends. The use of FinTech has revolutionized the finance and lease industry, allowing businesses to streamline their processes and gain more control over their resources. Lease companies can now use big data and artificial intelligence combined with could computing to receive real-time data from the investor market. Using machine learning techniques, the market analysis software can determine the most feasible investment options, lease rates, renter orientation, and market sustainability.
Compare Rental Income with Competition
Rent optimization and market analysis techniques combined in software assist leasing companies in maximizing profits and ensuring that the rented equipment or property is not being over or undercharged. Lease firms utilize powerful AI-based software to give a daily market analysis that takes into account all of the contributing elements that cause market fluctuations. Based on this analysis, these systems recommend market-competitive rent rates and lease durations.
Automated Credit Checks and History
Application submission and processing are two different processes that require careful consideration. Leasing companies can leverage technology to automate credit checks and renter screening based on credit history, rent payment record, criminal profile, medical history, and other background checks. This way, lease companies can process and approve applications efficiently and more easily. Powerful AI-based tools allow leasing companies and landlords to score a renter and advise whether or not to accept an application. These tools not only save valuable time but also help managers make informed decisions.
Using Virtual Tours for Effective Marketing
Technology has provided huge benefits to both leasing companies and landlords in simplifying the lease process and attracting renters. Companies can use videos and graphics to allow potential leads to take a virtual tour of properties. Latest developments in property management now let potential tenants use immersive technologies and explore mini Metaverses of properties listed for lease. In near future, potential lessees will be able to explore digital twins of properties, equipment, vehicles, and digital initiatives through AR/VR technology. The use of technology has eliminated the need for both lessees and lessors to be on-site for inspecting lease property or equipment.
Online Lease Payments
Online lease payment systems provide a variety of handy features that make it easier for lessees to pay monthly rent and for lease companies to collect it. The centralized payment systems ensure secure online payments via a variety of mediums. More so, customers can use these online payment systems to schedule automated payments each month or set reminders to avoid late fines or forgetting to pay their rent. Similarly, lease companies and landlords can use these modules to set fine amounts and due dates and synchronize lease payments with the accounting systems to post transactions directly into related registers.
Mobile Apps for Maintenance Requests
Since maintenance costs are included in both operating and finance leases, renters expect maintenance concerns to be addressed as soon as possible. Using mobile apps and web-based systems, renters can instantly initiate maintenance requests. Lease companies or landlords leverage technology to meet customer needs and monitor property or equipment conditions. Renters use the facility of attaching media files like videos and pictures to attribute substantial maintenance claims. The purpose of these apps is to improve lease service and streamline the maintenance process.
Unified Platform for Renters and Investors
Most FinTech applications use cloud-based technologies which focus on automating the entire leasing process on a unified platform to facilitate both investors and renters, improve transparency, and provide more control to lease companies over operating leases. Lease companies can leverage this technology to attract potential leads, conduct virtual tours, and provide up-to-date information to customers and decision-makers. The centralized approach to lease management helps lease companies and landlords save valuable time and focus on high-value business activities.
Final Thoughts
While many leasing companies are rapidly shifting to collaborative financial technology to streamline leasing processes, some businesses still rely on conventional on-site application submission and manual processing. Implementing lease accounting systems and synchronizing financial modules with emerging technologies can help both property managers and lease companies stay on top of their competition, expand their areas of operation, and attract more potential lessees. We hope this article will help companies realize the true potential of technology in streamlining their lease processes, maximizing profitability, and managing lease programs conveniently.
