These ERP features can end overpayments and penalties

June 5, 2023 | 3 minute read
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Theoretically, leasing gives companies a way to optimize spending while increasing material and technical capacity. Practically, leasing offers much more. Leases are invaluable tools that give companies financial flexibility and capital efficiency. They provide roughly the same benefits as ownership while limiting risk, preserving capital, and providing access to valuable assets like real estate and business equipment.

Because leases are so important, teams spend a great deal of time and money negotiating details and paying close attention to every clause. Then, for some reason, leases are forgotten. Once signed, they often disappear into filing cabinets, perhaps never to be seen again. Many companies entrust their entire lease portfolio to one person who manages obligations and entitlements with little more than spreadsheets and emails. That leaves an awful lot of room for error.

Even a cursory review of a company’s leases often reveals hidden opportunities, costs, and risks. Many (or even most) companies struggle with:

  • Accidentally paying for charges specifically excluded from lease agreements.
  • Paying an inflated share of building expenses or paying for things the company didn’t receive.
  • Missed discounts and other incentives resulting from the late payment of lease obligations.
  • Overlooked deadlines, especially those tied to auto-renewal, often incurring punitively-inflated rates.

Since leases can often be a business’s largest contractual obligations, the impacts of having them stuck in filing cabinets can be far reaching. Without accurate lease information, businesses can’t accurately report on current and projected expenses as well as liability amortization. And, if you don’t have accurate information, lessors have a major advantage during renegotiations and renewals.

We refer to these Oracle Financial Management capabilities as “Lease Accounting,” but the benefits go far beyond reporting and communicating financial information. Specifically, your company can capture upside while reducing the effort associated with managing leases. Examples include:

  • Managing and tracking amendments, obligations, milestones, options, and end-of-term decisions.
  • Monitoring and alerting for lease exceptions to ensure best-practice compliance and consistency.
  • Automatically calculating rent increases based on indices, percentages, or fixed amounts.
  • Automating payment processing from creation and approval to disbursement through integration with Oracle Fusion Cloud Payables.

Because it uses a standardized lease repository and lease disclosure, Oracle Financial Management can also provide a single view of all lease-related contract obligations. This provides the foundation for comprehensive lease reporting and analysis, which positions companies to take full advantage of the economic potential of leasing.

Additional resources

Here are additional resources you can use to learn more about using Oracle Financial Management to improve lease management:

To learn more about how Oracle Financial Management can help your business manage leases, click the “Learn more” button.

If you're an Oracle Partner and want to learn more, visit the Oracle Partner Community.

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Fusion Development

The Fusion Development team is responsible for building, maintaining, and driving innovation on the Oracle Fusion Cloud Applications Suite, which includes Oracle ERP, EPM, SCM, HCM, and CX. Its members are based throughout the world with central offices in the US, India, Mexico, The Philippines, and Romania.

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