Lease accounting is no longer a siloed finance function. Since the adoption of ASC 842, businesses have faced new challenges in how they manage, track, and report leases across departments. Today, technology is essential in bridging the gap between finance and IT—ensuring compliance and driving smarter business decisions.
The updated lease standard, ASC 842, requires businesses to bring virtually all leases onto the balance sheet, a move that dramatically changed financial reporting for thousands of companies. With this change came an increased demand for integrated systems, precise data management, and audit-ready transparency. That’s where the right software comes in.
Tools designed for asc 842 compliance help streamline workflows between finance and IT while reducing errors and enhancing visibility.
Why ASC 842 Raised the Stakes
ASC 842, issued by the Financial Accounting Standards Board (FASB), took effect for private companies in 2022 after a delay due to the pandemic. It mandates that all leases longer than 12 months must be reported as assets and liabilities on the balance sheet. That’s a big shift from the previous standard, which allowed many leases to remain off-book.
According to Deloitte, 73% of companies surveyed found implementation more difficult than anticipated, with data collection and lease identification cited as the biggest pain points. The core of the issue? Lease data lives across different systems—finance platforms, spreadsheets, shared drives, and sometimes even filing cabinets.
Where Finance and IT Must Collaborate
Bridging finance and IT is now a compliance requirement, not just a best practice. Finance teams need accurate and consistent lease data for reporting, while IT is responsible for selecting and maintaining the technology that supports this.
Here’s where the alignment becomes critical:
- Centralized data management – Avoids duplicates and discrepancies across systems
- Automated calculations – Reduces human error in depreciation, interest, and amortization
- Access control and security – Ensures only authorized personnel can modify lease data
- Audit trails – Keeps a record of every change for compliance and internal review
- Integration with ERP systems – Keeps the accounting flow smooth and timely
The success of ASC 842 compliance isn’t just about understanding lease terms—it’s about building a system that keeps everything aligned, traceable, and scalable.
Key Software Features to Look For
To support lease accounting compliance, modern platforms need more than basic data storage. Businesses should evaluate tech solutions based on their ability to scale, integrate, and ensure accuracy. Critical features include:
- Lease classification tools for easy finance vs. operating lease designation
- Automated journal entries aligned with FASB reporting standards
- Forecasting modules to model future lease expenses and impacts
- Custom reporting capabilities to support audits and board reporting
- Real-time collaboration features for multi-departmental access
If your current system involves Excel sheets and scattered PDFs, it’s probably time for an upgrade.
Real-World Impact: Compliance and Beyond
While the initial push for lease software came from compliance deadlines, companies are now seeing longer-term benefits. Centralized lease data allows better forecasting, more confident budgeting, and even negotiation advantages when it’s time to renew or terminate leases.
PwC’s 2023 Lease Accounting Survey revealed that 63% of companies said better lease visibility improved financial decision-making—showing that the right tools can turn a compliance burden into a strategic asset.
Moreover, streamlined workflows reduce hours spent chasing data or correcting errors, freeing teams to focus on value-added tasks.
Final Thoughts
ASC 842 isn’t just a rule change—it’s a mindset shift. To succeed, companies need both strong financial processes and reliable tech infrastructure. It’s not enough for finance and IT to operate in isolation. Lease accounting demands a unified approach.
Investing in the right tools to manage lease data under ASC 842 doesn’t just help you meet requirements—it creates clarity, reduces risk, and sets your business up for smarter, more agile growth. And as accounting standards evolve, having scalable, tech-backed systems in place makes it easier to adapt without disruption.
