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Keeping your data safe when outsourcing your lease administration or abstraction process

Despite the numerous benefits offered by outsourcing lease administration and abstraction functions, businesses sometimes refrain from doing so, due to the fear of lack of data safety and security. If you are one of them, then this blog is a must-read for you. It touches upon six key data security related questions you should be asking your lease administration/abstraction service provider before signing up with them. 

How is your data access structured? Ask your lease abstraction/administration service provider about their data access structure. Ideally, the access should be role-based, meaning the service provider should limit data access and editing permissions such that only those who need to work on the data should get access to it and also, the access level should be limited to their scope of work. All data access should be logged and monitored to detect any unusual activity that may be an indication of unauthorized access.

Where is all the work stored? Check with your service provider to ensure no work is performed or stored on their local machines or local external hardware. Data stored locally can be easily stolen. Ideally, your service provider should be using local machines to only access the Cloud or the main servers where all the work would actually be done and stored.

Is their IT outsourced? It is best if your service provider has an in-house IT team. While managed IT services is not necessarily a red flag, an in-house IT team is preferred as it means your vendor will be directly responsible for ensuring data security and safety standards are maintained. Check with your vendor if they have firewalls, antimalware systems, security patches and updates implemented.

How are the physical entry and exit points managed? Physical entry and exit points to the vendor’s office/workspaces where your leases are managed should be monitored and secured. Examples include CCTV cameras, biometrics, electronic access controls, etc.

How do they deal with hard copies? Check with your vendor if they will be using hard (paper) copies of your lease documents as a part of their SOP. If yes, then ask them to specify how and where they will be stored during the course of the project, who will be having access to them, how the access will be controlled and how these will be discarded after the project. Ideally, they should be shredded and disposed of under the supervision of the project manager or some other person in a position of authority. 

Are they flexible? Your lease administration/abstraction service provider should be also flexible enough to accommodate your specific needs in terms of data security. For example, if you want multi-factor authentication for electronic data access or a strict ‘no-print’ policy followed during the project, your vendor should be willing to make it a part of their SOP for your project and implement it diligently. 

Data security is a very real concern when outsourcing your lease administration and abstraction processes. An experienced vendor will most likely be following the best practices we discussed and be willing to improvise as well to suit your specific requirements.

Backed by 14+ years of lease experience, RE BackOffice’s lease administration team is well versed in all leading lease administration platforms including MRI, Yardi, Prolease, Lucernex, and more. To learn more about RE BackOffice’s lease administration services, contact us at support@rebackoffice.com.

Month-to-month lease administration: The Solution to Lease Administration Challenges during the Pandemic

In the current pandemic situation, many businesses are finding it challenging to maintain up-to-date lease portfolios. Hiring full-time lease portfolio managers, lease administrators, or even executing long-term contracts with lease administration service providers during these uncertain times is not an option for many of them. As a result, they are struggling with a backlog of leases to manage, pending lease audits, and also delays in their recovery of dues. 

The industry is turning to month-to-month lease administration services as a solution to this challenge. Month-to-month lease administration services are outsourced lease administration services that help businesses stay on top of their lease portfolio without having to worry about the costs or obligations associated with a yearly contract or the higher costs of hiring an in-house lease administrator. Outsourcing lease administration on a month-to-month basis to a service provider that has a proven track record presents a ‘High-ROI/Low-risk’ solution, that is most sought after in the current circumstances. 

Here are some key benefits of opting for an MTM lease administration service model-

No long-term commitment, more financial efficiency, zero contractual obligation
MTM lease administration services help companies become more efficient by eliminating training, HR related expenses, and save on lease agreement interpretation and translation costs. There’s no long-term commitment as companies don’t have to sign an ongoing contract with the lease administration service provider nor are they bringing a lease administrator onto their payroll. 

Scale up or down as per your business needs
When you hire an in-house lease administrator or sign up with someone long term to manage your lease portfolio, you are essentially stuck with them, irrespective of your lease portfolio management needs. You have to continue paying them whether you have enough work for them or not. But, with MTM lease admin services, you have full control and flexibility to navigate your lease admin needs. You can get a team of lease administrators to work for you when you have a sizable lease audit load and deploy just one resource when the number of leases to be audited and updated is less. Zero contractual obligations mean you get to scale up or down as you want, whenever you want. This flexibility can mean a lot in the current scenario when the money is tight.

MTM lease administration services make sure that you don’t miss critical timelines due to resource shortages and get timely access to important lease data that help drive key strategic decisions–even in the current situation.

Backed by 14+ years of lease experience, RE BackOffice’s lease administration team is well versed in all leading lease administration platforms including MRI, Yardi, Prolease, Lucernex, and more. To learn more about RE BackOffice’s month-to-month lease administration services, contact us at support@rebackoffice.com.

Revolutionizing Lease Abstraction with Artificial Intelligence

Lease abstraction is one of the core administrative tasks in CRE. However, the manual process of analyzing, abstracting, and storing critical lease data makes it a very time and resource consuming activity. This is where AI can help companies save valuable time and money. AI-enabled lease abstraction automation software scans through the entire lease document, including the addendums, letters, and notices, and extracts the relevant data points. Rent roll information and important dates are abstracted quickly. This process would otherwise take considerable time and a high level of accuracy when abstracted manually. Once this is complete, the information is then ready for auditing. 

In this blog, we will address some common questions companies have regarding the lease abstraction automation software.

– We have a large portfolio of leases. Can we upload and abstract bulk leases?
The tool is capable of bulk upload and abstraction of large volumes of leases. 

– What is the accuracy of the abstracted lease data?
The accuracy rate is as good as a manual abstraction, if not better. The lease abstraction automation tool is programmed to comb through the entire lease document ensuring key data is not left out or lost. This process remains uncompromised throughout the lease abstraction cycle. 

– Can we review the lease data extracted before exporting it?
Absolutely. The software displays all the lease data points extracted along with the section reference. This provides the required flexibility to review and make edits. The software displays the entire lease data extracted, including their section reference. This provides the required flexibility to review and make edits.

– Do we have to manually upload every lease document in the software?
Not at all. Lease documents are stored in a centralized folder, and the path to the folder is entered into the software. Technology does the rest.

– Is there a limit to the number of leases we can abstract?
No. The software has no limit on the number of leases it can abstract.

– In which format can we export the data?
The abstracted data can be exported in Excel, PDF or Word format.

– Can we integrate the lease abstraction automation tool with our existing lease administration platform?
Yes. The lease abstraction software can be integrated with any lease administration platform so that the time spent on transferring the abstracted lease data to a centralized system is cut down.

Is AI redefining Lease Abstraction?

Machine learning has made it possible to develop software that aims at reducing the time spent on abstracting leases substantially. In this blog, we will discuss the potential of automating the lease abstraction process.

Lease abstraction is one of the most critical tasks in CRE. The lease abstraction process involves thoroughly reviewing the lease document and extracting key data points. The data points then need to be audited and stored in a centralized system. The entire process is carried out manually and involves many laborious hours. There are many challenges in this manual abstraction process.

Firstly, the data abstracted is not in a structured format, which will make updating and retrieving key lease data difficult. Secondly, human intervention is not always immune to error. Maximum accounting mistakes are a result of an omission. With the implementation of the new accounting standards, there should be efforts to reduce errors. Thirdly, as the RE portfolio increases, companies are burdened with the need to hire and train additional human resources which will eventually deplete their financial resources.

These are the challenges that AI can quickly fix. AI-enabled lease abstraction software can swiftly scan through the entire lease document and its supplementary documents while extracting the key data points. This improves the efficiency of the lease abstraction process and the accuracy of the abstracted lease data. The software is capable of handling complex lease language as well as handwritten notes usually scribbled in the lease. With in-built rent and date calculators, the company will no longer have to worry about getting real-time access to lease data to make informed decisions. The use of the automation software also ensures a higher level of consistency and accuracy while implementing the regulations as per the new accounting standards. 

With AI the need for human involvement is greatly reduced. This enables companies to move their lease abstraction resources to other tasks that need that require manual intercession. 

Lease abstraction is a repetitive process, and by automating it, companies can rise above the mundane tasks and concentrate on growing their business.

Top 6 Real Estate Accounting Challenges

People in the real estate business enjoy selling and client interactions. But ask them about bookkeeping and they will tell how tedious and time consuming it is. The challenge begins with the need to maintain their books and hire staff to manage their accounting tasks.

Listed are the top 6 challenges for real estate companies

  1. New accounting regulations: The new accounting standards have affected the way businesses have been maintaining their records. Compliance with these regulations has made it vital to conduct accurate and timely updates of each financial transaction. Additionally, non-real estate leases need to be tracked, abstracted and stored. This is challenging for companies who have not maintained these types of contracts.
  2. Automation: The changes in accounting software have been significant. Artificial Intelligence is making it possible to reduce the manual work involved in accounting. So, it is essential to invest in the latest accounting software and identify which accounting tasks can be taken over by it. However, technology cannot accomplish every accounting task, and human action is still necessary.
  3. Shortage of skilled accounting applicants: One of the major concerns of companies is finding qualified, experienced applicants for accounting positions. This is the reason more companies are moving towards outsourcing their accounting tasks so that they can focus on revenue-generating activities. 
  4. Up to date data: Accurately updating and tracking financial transactions is important for successful accounting. The details of payroll, commissions, taxes, etc. must be recorded promptly, and made available for evaluation purposes.
  5. Organizing documents: Accounting involves recording transactions and reconciling records with the appropriate account to ensure there are no discrepancies. Documents like invoices, receipts, tax returns, insurance documents, etc. need to be filed and organized properly and should be available for reconciliation purposes.
  6. Lack of coordination with lease administration team: Lack of coordination between the accounting and lease administration departments hinders the performance of critical tasks. For instance, payment of invoices needs lease references that are readily available with the lease administration department.

For companies whose main occupation is not accounting, bookkeeping can be a daunting and costly activity. But companies have a choice to seek help from an expert service provider. Third-party service providers come with the expertise required to manage all the accounting activities, so companies don’t have to worry about it.

7 Mistakes that can shake your Lease Administration Function

Landlords and tenants engage in lease administration activities to manage their CRE portfolios. The goal is to reduce the risk of missing critical dates and payments. But are lease administration functions effective and efficient? The answer is no. Many companies are struggling with increasing lease admin operations costs and the problem of missing data.

In this blog, we will look at the 7 common reasons the lease administration department may not be functioning as it should.

  1. Lease abstraction error
    Lease abstraction is the process of extracting critical data which involves obligations. If any information is overlooked or lost during this process, there could be monetary losses running into thousands of dollars.
  2. Lack of compliance with lease accounting standards
    The new accounting standards mandate the abstraction of additional data points, which may mean that leases need to be abstracted again. This is a burden on a company’s financial resources. Additionally, non-compliance will attract penalties.
  3. Lack of process and evaluation
    Developing and implementing a productive lease administration process is important for the successful functioning of the lease administration department. Equally important is the consistent evaluation of the processes. This exercise is important to ensure the steps involved are not redundant and are producing the desired results without losing any critical information.
  4. No system or too many systems
    Investing in multiple software capable of catering to lease data management, document management, financial analysis, and accounting is important for any company to improve its efficiency. However, constant evaluation of this software is vital to ensure they are not redundant and are up to date.
  5. Wrong people on the staff
    Expertise in lease abstraction and lease administration tasks is mandatory for the smooth functioning of the lease administration department. Staff performance should be reviewed regularly to ensure they understand and conduct their duties effectively.
  6. Lease translation
    Global portfolios necessitate the translation of leases, and many companies do not have skilled resources to undertake this translation function. Service providers, who understand real estate, can accomplish this task economically.
  7. Lack of coordination between departments
    A lease administrator’s role has broadened considerably as a result of the additional tasks that previously fell under the purview of the legal, accounting, and finance department. But to accomplish these additional tasks, there is a need for transparency and coordination between the lease administration department and all other departments.