You could be overpaying for your finance lease without realising it, especially if you have many leasing contracts. Overcome lease reconciliation challenges and make sure you only pay what you actually owe.

How much is outstanding on each of your current finance leases? It is an innocuous enough question, but for companies with multiple finance leases it can be a tough one to answer. Invoices are spread out over years with the original lease contract filed safely away in a folder somewhere – making it extremely difficult and time-consuming to reconcile the two.

Let’s examine two challenges of finance lease reconciliation and see if they can be easily solved…

Month end close process, faster month end close1. “There is no easy way to match our invoices to the original lease agreement”

Problem: Even quite simple equipment leases can be extremely challenging to reconcile, especially for companies with many leases. It is all too easy to lose track of the lease duration, amount already paid and the amount left to pay – leaving you open to overpaying.

This is a common problem – particularly for retailers who lease their premises with a so-called common-area maintenance (CAM) lease. The cost of your CAM lease can vary drastically based on your company’s physical expansion over time, the definition of your base-year, square footage, variance cap and so on. Reconciling these variations in cost against your original contract and your actual payments with accuracy seems close to impossible.

Solution: Companies can get around the problem by deploying digital archiving software and digitising both their contract and invoices. With a digital archive financial controllers can easily keep track of all payments as well as the contract terms. 

It may also pay to install month end close reconciliation software. This software can digitise your invoices and the lease contract, and hence it is easy to see whether the cost of your lease have been correctly met or, if you’re unfortunate, overpaid. The time saved using this kind of software more than pays for itself!

2. “It’s difficult to track finance leases through Excel spreadsheets”

Problem: Spreadsheets are seen as a panacea for financial tasks, but they can easily hold small mistakes that have a huge impact on the financial close. With 90% of finance staff under increasing under pressure for a faster monthly close, the growing complexity of the close process heralds even more potential for spreadsheet errors.

excel spreadsheet reconciliation, spreadsheet errors, spreadsheet error infographic

Solution: Stop using Excel spreadsheets to record your transactions and complete your reconciliation. Besides the obvious cumbersome nature of spreadsheets, it is impossible to track which changes were made by whom, causing all kinds of governance, risk and compliance (GRC) issues. Of course you may not be able to stop using spreadsheets entirely, automated reconciliation software can help maximise productivity while minimising risk.

Account transaction matching software works directly on your accounts, matching debits with credits, or (if needed) matches against external sources such as bank statements, sub-ledger systems, or incoming payments against your accounts receivables, etc. It reconciles the balances on each and instinctively highlights any mismatched amounts in ways you will be truly impressed by if you haven’t seen it before. 

With custom rules this software is flexible enough to deal with monthly lease payments too, see Adra Match ACCOUNTS transaction matching software.


How can enhanced balance sheet reconciliation software help with lease reconciliation? 

Import your finance leasing contracts straight into the Adra Match BALANCER – balance sheet reconciliation software to digitise your lease contracts. This will record the future liability the lease represents on your leasing accounts and helps reconcile against your lease payments.

The lease templates within Adra Match’s BALANCER – balance sheet reconciliation software also standardise the information extracted from leasing contracts. For large companies, with multinational accounts, this can save a vast amount of time and effort compared to manually searching for this information – streamlining the whole process. 

BALANCER’s cherry on top is its digital archive. Collect and collate all your lease contracts, invoices and any other documentation in the archive for quick and easy searching as and when needed, even for subsidiaries far off. No more flicking through years of paper documents all in individual binders. 

This gives you great oversight of the whole process while making your lease reconciliation as easy as pie!

Discover BALANCER – enhanced balance sheet reconciliation software today and overcome your lease reconciliation challenges in one easy step.