The Silicon Review
Companies lease, rather than buy, many of the assets they use to run their business - real estate, cars, trucks, laptops, servers, forklifts, and dozens of other types of equipment. In aggregate, businesses around the world over $5 Trillion of assets. However, historically neither small or large companies have never had a business application to track these leases. ERP applications were designed to manage the assets that companies own, not the assets that they lease. Instead, companies have attempted to manage their leases using spreadsheets, emails, and yellow sticky notes. There are few, if any, other business processes that touch trillions of dollars in spend with so little automation, governance, process, and controls.
The lack of automation results in millions of dollars of unnecessary expenses at most Global 2000 companies. Data center and end-user technology such as servers and laptops are often returned late and penalty fees are issued. Equipment such as forklifts goes missing and must be purchased at a loss. Companies miss critical deadlines for renewing their office leases and end up paying higher monthly rents. In fact, some of the largest and most innovative companies on the planet have abandoned leasing altogether due to the complexity associated with trying to manage the underlying business processes. Although there have been many vendors providing sales and servicing automation at the leasing companies (lessors), there were no commercial applications designed to support the lessees. LeaseAccelerator Inc. was born in 2003 to meet the demands of automation in lease management and fill this industrial gap. The company was founded with the vision of developing the world’s first software application to automate the end-to-end business processes for leasing.
The New Frontier in Procurement
One of the biggest savings opportunities in the leasing lifecycle is to negotiate contracts with lower rates and better terms. Most procurement organizations have a playbook of strategies such as competitive bidding, RFPs, and spend consolidation that they employ to extract cost savings from vendors for assets they purchase. However, they fail to execute the same playbook to lower the financing costs and other expenses associated with leases.
LeaseAccelerator hopes to change the way that corporations finance major equipment acquisitions with its cloud-based Enterprise Lease Sourcing application. The platform caters to the procurement organizations of Fortune-500 companies that lease significant dollar volumes of computers, trucks, forklifts, railcars, shipping containers, and other types of assets.
When equipment financing is required, the procurement organization can use LeaseAccelerator to quickly create a specialized RFP that outlines the desired terms and structure of a lease. The RFP is then distributed to LeaseAccelerator’s Global Lessor Network, which attracts capital from hundreds of leasing companies around the world. Many of these leasing companies specialize in financing particular deal sizes, asset types, and geographic regions.
Navigating a Zero-Billion Dollar Market
In its early days LeaseAccelerator faced little competition. The idea itself was much ahead of time, which posed challenges for the company initially. Although the first application was released in 2004, demand did not surge until twelve years later and many were skeptical whether the market would ever materialize. However, Michael Keeler, the visionary behind the company, never doubted himself or the value proposition of the software. In fact, Keeler bootstrapped the company from his own bank account for many years. Employees worked out of the basement of an orthodontist building in Great Falls, Virginia. There were ups and downs including months when Keeler deferred his own salary in order to continue funding his vision.
However, success slowly prevailed. Between 2009 and 2014, LeaseAccelerator began to accumulate wins with Fortune 500 companies such as Cisco, Cummins, and Salesforce.com. These companies did not realize that they would be the pioneers in, what at the time was a zero-billion-dollar market, but today is one of the fastest growing categories of software applications.
Keeler and LeaseAccelerator finally struck gold when a new set of lease accounting standards were published in February of 2016. Complying with these new guidelines would not be possible for Fortune 500 companies without automation of the processes, policies, and controls supporting the leasing process. This was a problem LeaseAccelerator was uniquely positioned to solve. Riding the surge in demand for its software, LeaseAccelerator has doubled its employee base and tripled its revenue in the past twelve months.
What Differentiates LeaseAccelerator
The company’s core differentiating factors that provide a competitive edge include:
Designed for All Categories of Leases: Unlike most lease applications that were designed principally to account for real estate properties such as retail stores, office buildings, and industrial space, LeaseAccelerator was designed from the ground up to support all categories of leases including aircraft, automobiles, computers, forklifts, rail cars, marine vessels, photocopiers, trucks, and other equipment.
Software-as-a-Service Model: Lease Accelerator’s lease accounting application is offered in a Software-as-a-Service (SaaS) model which means that the company handles all of the on-going maintenance of the underlying technology. The LeaseAccelerator team provides performance and health monitoring; system backup and recovery; and administration of server hardware, databases, and application servers.
More than Compliance: Unlike many leasing applications that were primarily designed to help companies meet the tactical accounting and financial reporting requirements of the SEC, LeaseAccelerator was designed to automate the end-to-end leasing lifecycle. The product includes lease management features that allow companies to track changes to the leasing portfolio such as new leases, rent fluctuations, contract modifications, end of term renewals, asset buyouts, and equipment returns.
Meet the Leader
Michael Keeler, CEO and Founder: An expert in lease accounting, he has been the primary force behind the growth and vision for LeaseAccelerator and Enterprise Lease Accounting. Michael has more than 20 years of experience building software businesses. Prior to joining LeaseAccelerator, he served as President of Onmark Corporation, an international IT leasing company, and founded and managed two software firms, DataZen, and Ecologic Corporation.