For most finance and accounting teams, lease abstraction is a necessary evil. It’s a time-consuming, manual process buried in spreadsheets, financial reports, and PDF documents. Extracting key financial terms from lease agreements – such as rent escalations, renewal options, and termination clauses – requires meticulous review, expertise, and patience.
Lease accountants know too well that the stakes are too high to get it wrong. With evolving standards, such as ASC 842, IFRS 16, and FRS 102, every detail matters. A missed clause or misinterpreted term can ripple through your general ledger, financial statements, and compliance reports, exposing your organization to unnecessary risk, including material misstatements and audits.
It’s time to move beyond lease abstraction – with automation, AI, and purpose-built accounting tools.
What traditional lease abstraction looks like
1. Initial review (lengthy lease review processes)
Teams begin by identifying the required data fields across lease documents. They sift through lengthy agreements to determine which clauses are relevant for accounting and compliance.
2. Data extraction (prone to errors and omissions)
The accounting team then manually scans, locates, and inputs key data into spreadsheets or systems. It’s tedious, time-consuming, and highly prone to human error and missed details.
3. Validation (tedious procedure with no link to source data)
After the data is entered, it needs to be manually reviewed for completeness and accuracy. Without a single source of truth and direct links to source documents, validation is a tedious and disconnected task.
4. Change tracking (disjointed spreadsheets and version control issues)
Lease terms, such as renewals, amendments, and terminations, can change over time. Teams need to update records, track changes, and often repeat steps 1–3. With disconnected spreadsheets, version control becomes a substantial risk and a bottleneck to completion.
This process isn’t sustainable.
Why lease abstraction is so painful
By design, lease abstraction involves transforming unstructured lease documents into structured data for accounting and reporting purposes. Sounds simple. But in practice, it’s anything but:
- Lease contracts can vary wildly in format and language.
- Key data points are buried across pages, often without consistent phrasing.
- Teams spend hours manually scanning PDFs and printed documents to identify, interpret, and input relevant terms.
- Disconnected spreadsheets create version control issues and broken audit trails.
The result? A slow, fragile process with a high risk of human error, no scalability, and little time left for review or strategic analysis.
The risk of standing still
Today’s compliance landscape leaves little room for mistakes or outdated, error-prone processes. Accounting standards like ASC 842 and IFRS 16 require granular, consistent lease data across thousands of possible contracts and amendments. In addition, the requirements to meet these standards must be built into the process, whether it’s manual or designed with AI to be automated.
If lease abstraction drags, everything downstream suffers:
- Accounting close timelines slip
- Financial reporting becomes more reactive than strategic
- Audits take longer and cost more
- Compliance risks escalate
- Overburdened teams work long hours, and lose steam
Doing nothing is a costly and unsustainable approach if accounting practices wish to survive.
A smarter way forward: automated lease abstraction
Trullion’s AI-powered platform reimagines lease abstraction from the ground up. Instead of manually poring over every document, teams utilize automation to extract critical data with speed and precision.
Here’s how it works:
- AI-powered document parsing scans lease agreements and extracts key data points – like lease start and end dates, base rent, renewal terms, and more – in minutes.
- Rule-based logic and customizable prompts adapt to your business’s terminology and lease structures.
- All data is linked back to the source document, providing full auditability and transparency.
- Cloud-based collaboration ensures version control, secure access, and a centralized system of record.
- Outputs are structured, reliable, and ready for compliance with ASC 842, IFRS 16, and other standards.
This is practical, value-adding automation that adapts to your workflows and scales with your lease portfolio.
The ROI of accounting automation: efficiency, accuracy, and peace of mind
Trullion helps your team:
- Define precisely what matters with custom prompts. Customize Trullion to extract client-specific data fields, tailored to the unique structure and terminology of your lease agreements and accounting requirements.
- Extract lease data at scale – in minutes, not hours. AI-powered automation processes lease documents quickly and accurately, significantly reducing manual effort and saving valuable time.
- Ensure audit readiness with full traceability. Maintain complete transparency by linking every data point directly to its source document, thereby supporting a clean and verifiable audit trail.
- Track every change with confidence. Keep lease data versioned, centrally tracked, and always up to date – eliminating version control issues with a reliable single source of truth.
- Work smarter with Trulli, your GenAI assistant. Trulli, our embedded generative AI chatbot, guides you throughout the lease abstraction workflow with instant, adaptive, and on-demand support.
And the results speak for themselves. Real Trullion clients report experiencing changes like a 90% time saving on lease management, and a reduction in lease accounting time from days to just minutes:
- Save hours per lease. Trullion users reduce abstraction time by orders of magnitude, freeing teams to focus on review and decision-making.
- Improve accuracy. Automated extraction ensures consistent data capture across contracts.
- Strengthen compliance. With every data point tied back to the original document, audit readiness becomes a built-in feature, not a scramble.
- Work from a single source of truth. No more version control chaos or fragmented data. Accounting, audit, and legal teams all benefit from one unified platform.
Lease abstraction can be a whole lot easier
Lease abstraction has long been a bottleneck – and even a pain point for accounting practices. But with the right software, it can become a source of clarity, control, and confidence.
Trullion’s AI-powered lease abstraction platform delivers speed, accuracy, and compliance in one intuitive interface. No more disconnected spreadsheets. No more late nights chasing down terms. Just clean data, faster decisions, and audit-ready outputs.
Discover how Trullion can abstract your leases in minutes, not hours. Book a demo to see it in action.