What

Visual Lease is a SaaS company empowering organizations to leverage their lease portfolios as a strategic asset, rather than a cost item. In the face of new lease accounting standards, Visual Lease partners with its clients to ensure ongoing compliance with FASB, IFRS, and GASB lease accounting standards, which require leases to be reported on a balance sheet, while also transforming lease- and finance-related data into strategic business decisions.

Why

According to Robert Michlewicz, CEO of Visual Lease, proprietary survey data suggests 99% of senior finance and accounting professionals at sampled private companies fear misreporting company lease information. Nearly fifty percent of them were concerned about their company’s reputation being affected by potential fines or a failed audit, while 44% were further preoccupied with individual reputational effects.

“Secondary to payroll, lease portfolios for most companies are the second largest expense item on their balance sheet,” Michlewicz said. “To not have a strategic plan around that portfolio would be a total miss.”

How

Visual Lease sees the new lease accounting standards as an opportunity to cross-pollinate across teams. “Something you didn't have to report on before now has to be taken into consideration on the balance sheet, and it's all virtual teams within finance, and there are constituents within organizations that they historically did not work with before, such as on the real estate side or the equipment side,” Michlewicz noted. “What we see is even those stakeholders within the companies are meeting and working with each other for the first time; to do that in a framework where they don't have to have a common understanding of the controls in place either to operationally manage the leases or to meet the financial requirements is, by itself, whole new risk they're trying to manage together.”

The companies that move from “having to” meet these compliance requirements in 2023 to “wanting to,” Michlewicz said, are those that will turn their lease portfolios into a strategic benefit. “Companies actually can utilize these requirements not just to clear an audit or not just to meet a standard, but they actually can use them to make key decisions on which leases clients should enter into, or change in the future, to meet their strategic direction,” Michlewicz said. Visual Lease is helping clients identify overpayments and uncover unfavorable terms, especially as companies look to reduce their footprint or reallocate spaces as workers continue to work remotely or in hybrid form.

Ultimately, Visual Lease sees new lease accounting requirements as a keystone to companies’ valuations, helping investors evaluate company stability and liabilities. “On an internal basis from a customer’s perspective, they’re learning a whole new muscle,” Michlewicz said.