Leave Spreadsheets Behind: Smarter Lease Invoicing

Introduction

Collections are a critical part of every leasing business. It starts with sending timely invoices to your customers. Spreadsheets can help with simple leases. Contract modifications are becoming more complex. Keeping them updated on spreadsheets is very difficult.

Any invoicing errors result in customer dissatisfaction and payment delays. Customers dispute the statements generated by lessors. Automation increases accuracy and scales efficiently.

The Hidden Pitfalls of Spreadsheet Invoicing

Spreadsheets are quick, easy, and cheap. Easy to start up by entering invoicing schedules. Easy as you can manage it yourself. They are cost-effective, as you already have spreadsheets.

As your portfolio grows to hundreds or thousands of leases, it becomes complex. Updating hundreds or thousands of scheduled tasks without errors is very difficult. Errors in invoicing result in delayed payments.

Managing modifications to payment schedules on a spreadsheet could be complex. Tracking the history of changes is not possible on spreadsheets. The result is excessive time before responding to customer queries. Enforcing contractual terms is a missed opportunity that may be available through automation.

Regulatory compliance is getting more stringent. Spreadsheets are not built with audit trails and internal controls. Any mistakes could result in financial penalties, reputational risk, and lost customers.

How Automation Transforms Lease Invoicing

Automated lease invoicing addresses issues with manual invoicing. Storing relevant terms and conditions relating to invoices and changes. This data is used to automatically generate invoices promptly. Set up the solution to send invoices 30 days before the due date. Customers can pay on time to avoid any delinquency charges.

Changes to the contract are updated in the solution. Impacts to the schedules are recomputed and stored for generating accurate invoices. Follow-up and reminders are generated automatically.

These steps minimize manual errors and free up valuable resources. Seamless integration with your other software solutions. Typically accounting, CRM, and ERP, are integrated. Real-time reporting and dashboards provide business insights to management. Audit trails track who made a specific change and when, enhancing compliance.

Artificial Intelligence Impact on Lease Invoicing

Artificial intelligence is disrupting many established business processes. Let us explore how it could impact lease invoicing.

Invoice generation – is it possible for AI to read smart lease contracts? Generate real-time to generate invoices based on customer preferences. Smart contracts could get updated based on an interest rate change or a triggering event. The customer could change preferences. They may change the invoice delivery mode from paper to electronic or EDI.

Invoice validation – invoices may be against a predefined payment schedule or ad hoc. An ad hoc invoice should be validated against the agreement.

Payment processing – with new and secure payment rails getting established. AI could drive the payment workflow. Payment requested by the lessor may require real-time authorization by the customer.

Delinquency follow-up – AI could determine the best follow-up strategy to apply. Behavior patterns can drive AI to email, call, or use any other appropriate method. The results are tracked in real-time and adjusted.

Customer service – respond to customers’ queries. AI can access all the information on the agreement, invoicing, payments. The responses could be more comprehensive than those of a customer service representative.

The Key Benefits of Smarter Lease Invoicing

Smarter lease invoicing results in improved cash flow. Accurate and timely invoicing enables lessees to pay efficiently. Customers have fewer queries, in addition to appreciating the clarity and consistency. Lessors free up resources across the organization to focus on value-added activities.

Customers are likely to appreciate the relationship with lessors who make fewer errors. Lessors who provide timely and accurate information to increase their business.

Conclusion

Spreadsheets are familiar and cheap. The lack of audit trails is a concern. Preventing errors is difficult. In addition, spreadsheets are cheap.

In comparison, automated lease accounting software is expensive. These solutions help minimize errors, increasing timeliness and accuracy. The direct and indirect benefits outweigh the additional costs.