Why we DON’T require contractual commitments, and why you should be wary of any company that does.
In college I had a friend with the following routine: The first day of each semester, he would classify his classes into 2 groups: those that required attendance and those that didn’t. He would attend all the classes that didn’t require attendance, but gleefully skip every single class where attendance was required. His rational was this: professors that took attendance recognized that their courses were passable simply by reading the textbook, and because they did not want to teach to an empty class, they required attendance. The professors that didn’t require attendance, on the other hand, realized that the material was so difficult that you would figure out very quickly that you needed to attend the class to pass it, as such requiring attendance was unnecessary. He said this was why most of his marketing classes required attendance, but his engineering classes didn’t.
The same can be said of contractual commitments by software companies. Software companies that require you to sign a commitment for a certain period are those that recognize that you may be inclined to leave them after a while, and the contract ensures that you can’t leave even if you want to. Simply put, they do not need to keep you happy after you sign on. On the other hand, software companies that do not require a commitment are willing to bet that they provide so much value that you will not want to leave them, and because they know that you can leave them whenever you choose, they MUST keep you happy.
Some may argue that the reason software companies require term commitments is to protect themselves from any initial investment the company made for the customer. Now that may make sense for a cell phone provider, which gives you a cell phone at a discount and requires a contractual commitment to protect themselves. But any software company that requires a contractual commitment to “protect themselves from initial investment” is spewing ABSOLUTE NONSENSE. Why? Software providers charge you for the initial setup, customization, and even training. They do not come out of pocket for those costs. Their “protection” is that they are billing you.
On a related note, be wary of software providers that plug into multiple facets of your company; those that attempt to do everything for you. For instance, your lease accounting software provider may want to plug into your general ledger, your accounts receivable ledger, your accounts payable ledger, your asset depreciation ledger, etc. For each “intergration,” the company charges you. A good way to identify these companies is that their salespeople use the word “streamline” a lot. What that software company has done is created “vendor lock-in,” meaning that because you have invested so much in integrating the software into your existing systems and because the software has its tentacles in multiple facets of the company, you are locked-in, and you cannot leave them even if you want to. Want proof? If you are reading this article on Internet Explorer 7 (IE7), then I bet that your company is forced to use IE7 because you are running some legacy software from some antiquated system that forces you to use IE7. This is why you may get a message that says something like “the version of this browser is no longer supported” when you visit some websites. Why haven’t they upgraded their system? They don’t have to, plain and simple. They are getting paid no matter what.
So when you are in the market for lease management software (or any software for that matter), be wary of those that require a commitment. If the salesperson says “streamline” more than once, run. If he/she says they will integrate with ALL your existing systems, run further. LeaseQuery requires no commitments whatsoever. Sure, we bill our clients annually, but that is to keep things simple and reduce administrative costs. Keeping things simple is a BIG part of what we do. Billing annually eliminates the need to send out monthly invoices, track the number of leases in the system monthly, etc. It reduces our overhead, which is one of the reasons we are VERY affordable. We are system agnostic, so when we integrate with your system it is painless. If you decide to leave us, you get a prorated refund. And for the record, we have not had a SINGLE client leave. Not one.
About LeaseQuery: LeaseQuery is lease management software that helps companies manage their leases. Rather than relying on excel spreadsheets, our clients use LeaseQuery to get alerts for critical dates (renewals, etc), calculate the straight-line amortization of rent and TI allowances per GAAP, provide the required monthly journal entries (for both capital and operating leases) and provide the commitment disclosure reports required in the notes and the MD&A. Contact us here.