Many companies invest millions in evaluating and improving their business processes with the objective of reducing costs and improving controls. However, they often overlook their asset procurement and financing activities. Yet those activities, typically undertaken directly by each division or business unit, are often expensively financed and inefficiently executed through one-off leases.

Financing under the Corporate Treasury's "radar screen" is expensive
Since individual leases are usually for amounts that fall below a dollar amount that requires Corporate Treasury's review and approval, each lease is negotiated individually and typically financed at high costs. The pricing is based on the type of lease and leased equipment, not on the company corporate credit rating.

Leases are not properly tracked and monitored
With numerous leases executed with as many as 50 lessors, it is difficult for companies to properly track all leased assets. Poor tracking often leads to inefficient asset management and past-due delinquency charge.

Inefficient procurement process
Companies cannot leverage their corporate spending to the full extent and the lack of central controls may result in unnecessary expenditures.

High compliance risk
With decentralized leasing, companies carry a higher risk of not accounting properly for their leased assets in their financial statements. Decentralized and manual asset tracking also makes it more challenging for large companies to comply with the Sarbanes-Oxley Act.