In the competitive world of biotechnology and pharmaceuticals, managing medical equipment leasing efficiently can provide both flexibility and significant cost savings. As companies scale operations and innovate, it’s critical to have a leasing strategy that allows access to cutting-edge technology while maintaining financial stability. This blog explores how to improve your medical equipment leasing strategy by leveraging lease accounting solutions, managing compliance, maximizing contract terms, and integrating with ERP systems.

Include Lease Accounting and Compliance in Your Strategy

Over the past few years, lease accounting has undergone significant changes, with leased equipment and property no longer just appearing in the footnotes of financial statements. Today, right-of-use assets and lease liabilities must be included on the balance sheet, thanks to new accounting standards like IFRS 16 and ASC 842. These regulations have made it necessary for organizations to implement an end-to-end lease accounting solution that ensures compliance and simplifies administration.

For pharmaceutical companies, compliance with both local and international standards is crucial. With so many different accounting guidelines in play, managing medical equipment leases can be complex. According to Deloitte, a significant number of companies, including those in the life sciences sector, still struggle to master compliance with ASC 842. Having a centralized platform like Nakisa Lease Administration helps capture all requirements, providing a unified solution for managing lease accounting, from lease determination and asset recognition to lease event management and disclosure reports.

Choose an Asset-Agnostic Lease Management Solution

Pharmaceutical companies manage a diverse array of leased assets, including equipment, fleet, and real estate. This diversity can pose challenges when trying to scale operations, especially when relying on outdated tools like spreadsheets or legacy software. These systems often lack the flexibility and scalability needed to handle large, complex portfolios, leading to errors and inefficiencies.

To effectively manage your growing lease portfolio, look for a lease management solution that is asset-agnostic, meaning it can handle all types of leased assets within a single platform. Nakisa Lease Administration offers a centralized solution that can scale with your operations, allowing you to manage multiple contracts, automate key processes, and ensure compliance with audit trails and reporting requirements. The platform integrates seamlessly with major ERP systems, like SAP ERP and Oracle Fusion Cloud, making it easier to keep track of leases across your organization.

Maximize the Value of Your Medical Equipment Leasing Contracts

One of the primary benefits of leasing medical equipment is flexibility. Leasing allows companies to access cutting-edge technology without the high upfront costs, which can significantly impact capital expenditures. This enables pharmaceutical companies to stay agile, improving their ability to innovate and compete in a fast-paced industry.

To make the most of your leasing contracts, it’s essential to have clear visibility into the terms and conditions (T&Cs) of each lease. With a powerful lease management solution, you can track critical dates, such as options to extend or terminate leases. This allows you to stay in control of your leasing strategy, aligning it with your broader business goals.

Nakisa Lease Administration provides the tools needed to stay on top of contract terms. You can set notification dates for key milestones, such as contract expirations, and receive alerts to make timely decisions. The platform also offers detailed financial reports, including a Contract Expiration Report, which helps you manage your leasing strategy and ensure that you are fully prepared for any changes. Additionally, with the Data Quality Integrity Reports feature, you can validate the terms and conditions of your leases, identifying any gaps in your finance strategy and ensuring alignment with your overall business objectives.

Is There a Future for Medical Equipment Leasing?

Absolutely. The demand for flexibility in manufacturing and production is expected to grow, particularly as pharmaceutical companies shift from large-scale production to more specialized, smaller-scale operations. According to industry experts, this shift is driving the need for new models of working, and leasing is becoming an essential strategy for accessing the latest technology without committing large amounts of capital.

As the industry continues to evolve, the flexibility provided by medical equipment leasing will remain a crucial component of the strategy for staying competitive and cost-effective. By implementing an optimized leasing strategy, pharmaceutical companies can focus on innovation and growth while managing costs and maintaining financial agility.

Conclusion

In conclusion, an effective medical equipment leasing strategy requires more than just finding the best lease terms. By adopting a centralized, asset-agnostic lease management solution, ensuring compliance with accounting standards, and leveraging powerful reporting tools, pharmaceutical companies can optimize their leasing practices. With the right strategy and technology in place, companies can unlock the full potential of medical equipment leasing, allowing them to stay ahead of the competition while managing costs effectively.