Episode 10 “2023 Accounting Predictions with VL’s CEO, Robert Michlewicz”

VLDI Podcast Episode 10 Transcript

Joe

Hi. I’m your host, Joe Fitzgerald. Happy New Year and welcome back to the Visual Lease Data Institute Podcast. Here at VL, we empower organizations to turn their lease portfolio into a strategic asset. Our solutions help companies easily sustain compliance with FASB, IFRS and GASB lease accounting standards, as well as implement proper lease controls to improve the financial and operational performance of their leases.

Today, I’m joined by Visual Lease’s CEO, Robert Michlewicz. With 2022 now pretty much behind us, there are many things we’ve learned when it comes to lease portfolio management and optimization. So, let’s dive right in. Welcome back, Robert, and thanks for joining us.

Robert

Thank you, Joe. Great to be back here with you.

Joe

So let’s talk about what’s on the horizon for 2023. Most companies have now addressed their lease accounting compliance requirements. Is it true that maintaining this compliance is just as important as achieving it in the first place?

Robert

Absolutely. In today’s economic climate, companies can’t afford to neglect one of their largest expense items, which for many is their lease portfolio. Many companies we talked to are stunned to find out that after headcount related expenses, leases are typically the second largest expense. To further complicate matters, leases are very dynamic agreements, and the economic market in recent years means companies are often subject to changes that need to be documented, tracked and reported over time to ensure proper and ongoing compliance with the lease accounting standards.

When considering it from that perspective, you assume companies are keeping close tabs on their leases. But before the introduction of the new lease accounting standards, public and private companies as well as government agencies, tend to neglect their lease agreements. Thankfully, the new lease accounting standards have given businesses a time sensitive reason to maintain strong lease accounting and administration processes.

Joe

With initial compliance in the rearview mirror, what should be top of mind for CFOs this year?

Robert

Well, if they haven’t already, CFOs should focus on ensuring they have the right technology to help their company sustain compliance while implementing proper lease controls. This is critical given the number of teams that are typically involved in these processes. Just to name a few: real estate groups, operations, finance, legal and procurement are typically involved.

By taking these steps, a company can ensure the right people have access to the right information at the right time. Otherwise, they’ll unnecessarily expose their organizations to risks. These can include the inability to respond to changing circumstances, missing deadlines and options, miscalculating lease costs, missing an incentive or reimbursement, or even overpaying and assuming responsibilities that belonged with their lessor. With leases now being represented on the balance sheet, these agreements are priorities to CFOs.

This critical shift has provided businesses with an opportunity to really get a handle on their leases. In fact, when prioritized, are properly managed, an organization’s lease portfolio has the ability to not only reduce substantial risk, but also introduce real business benefits, including cost savings opportunities, stronger internal controls, access to capital via a more transparent evaluation criteria, easier audit prep, and the ability to make more strategic operational decisions in the future.

Joe

So, Robert, when I opened up our conversation, I said that VL can help companies transform their lease portfolios into a strategic asset. What exactly does that mean?

Robert

Yes, Visual Lease is uniquely designed to meet the needs of every team that interacts with a company’s lease portfolio, to reduce risk, drive confident and sustain lease accounting compliance, and provide the visibility required to make agile business decisions. The only way that companies can access the unique insights within a lease portfolio is to first align and implement a robust set of lease controls, which is something Visual Lease is uniquely positioned to do based on over 25 years and helping businesses across all industries get maximum value out of their leases.

We offer control structures that bring finance, administrative and operational stakeholders, the ability to work together in a way that they’ve never been able to before by empowering finance and their counterparts across the business to better understand their leases and access the insights within. We empower them to bring even more strategic value to their companies.

Joe

So Robert, I don’t know if you get your crystal ball sitting next to you… But any predictions for the fintech world in 2023?

Robert

Oh, it’s going to be an amazing year! In our current economic climate, you know, companies are going to just continue to be hard pressed to do more with less and really focus in on their overall cash. This year, businesses are more likely to prioritize financial technology that can really address the multiple business needs to create an even greater return on investment as they continue to evolve with their virtual teams.

Joe

Would you care to leave our audience with a parting thought?

Robert

Well, you know, I’m really excited to say that we’re going to have a new survey report coming out from the Visual Lease Data Institute that’s currently in the works right now. It’s going to dive into hot topics like lease management, lease optimization, ESG and several other things that are impacting organizations. We had this report in 2022, and it provided a tremendous amount of value to not only our customers, but our partners.

So be on the lookout for this as we go into 2023.

Joe

That will conclude today’s episode of the VLDI Podcast. Robert, thank you so much for joining us again and sharing your valuable knowledge. If you enjoyed this episode and want to catch up with other resources from the Visual Lease Data Institute, be sure to follow our LinkedIn, Twitter, Instagram and Facebook pages @visuallease, as well as our new LinkedIn community page, which you can join by using the link in the YouTube description below.

And don’t forget to tune in to the next episode of the Visual Lease Data Institute Podcast, where our focus is on helping you leverage your lease portfolio as a strategic asset.