New AI product to be a game changer for lease contracts
LeaseInfo, Australia’s largest provider of retail leasing data, has launched Accurait, an advanced digital lease extraction platform set to revolutionise the management of leasing contracts. Accurait is the first in Australia to use artificial intelligence (AI) and machine learning methods as part of the automation process for commercial lease abstraction.
These methods were developed in partnership with CSIRO’s Data61, with support from the NSW Government. The process used by Accurait also uses Text Classification tools, optical character recognition (OCR) and LeaseInfo’s own meta data to improve data accuracy.
Lease management involves coordinating vast amounts of documents and data on the accounting, administrative and legal requirements associated with the rental and maintenance of properties and other assets. Currently this is largely a manual process, which is expensive and time intensive. With advances in technology, it is now ripe for automation.
The new software seamlessly reads lease contracts and scanned data, and stores key information in a database, allowing tagging and linking of information across different documents, which can then be exported to asset management software, via an API.
“Accurait is quite simply a game-changer. It will redefine the way businesses manage leases and in fact, can have application for any form of standardised contract. For head offices of franchised business and companies managing large portfolios, the savings in time and productivity are significant,” says Simon Fonteyn, founder and managing director of LeaseInfo and Accurait.
Business intelligence software products have to date focused on capturing data and transferring it into a digital format using technology such as OCR, which relies on templates and rules. With the introduction of machine learning, the platform gathers insights which enable it to self-improve and recognise similar attributes for future contract processing.
According to CSIRO’s Data61 head of Strategic Accounts Warren Bradey, Accurait is a great example of how data science can be applied to streamline business processes.
“Data61 has extensive experience in areas such as natural language processing and machine learning, both methods are used in Accurait, whether it’s helping organisations understand themes in public discussion on social media or making sense of digital legislation for regulatory processes in organisations. Through partnerships with forward thinking companies like LeaseInfo, we are accelerating our data-driven future by making it easier to do business,” says Bradey.
Key features of Accurait include:
- compliance with Accounting Standards IFRS/AASB16 for auditing purposes
- a clause locator and highlighter for locating key text within leases and contracts
- lease verification, due diligence and exception reporting
- identification and comparison of clauses across a portfolio of leases
- worldwide access through a secure on-line presence or cloud-based system and agnostic database
- intra-link technology to cross-reference source documents with retrieved data
- seamless integration through an API with other approved platforms and systems
- accuracy and data quality with reliable error detection
- maintaining the hierarchy of leases including variations, assignments and sub-leases; and
- local industry product support, training and continuous enhancement.
Statistics from Accurait’s beta testing phase provided live data from customers including several high-profile retailers. This output shows Accurait results in increased productivity, higher rates of error detection, faster turnaround times, reduced legal fees and labour costs. Accurait also provides a full audit trail, which will drive further cost savings and enhance governance.
According to Rachel Bessis, head of Market Development of Swarovski for Australia and New Zealand, the business case for adoption of Accurait relates to four key areas – saving time in uploading leases; managing the hierarchy of leases; sub-leases, assignments, reducing error and risk; as well as enabling global searches across executed leases and leases under negotiation for due diligence.
“Our initial estimates are that we save at least 30 minutes per lease in uploading time and Accurait eliminates the need to go back and re-read contracts saving hours. When multiplied over the typical lease term of five years and across our whole portfolio, the savings in productivity and costs are significant,” Bessis says.
The Accurait system was developed with the assistance of a $25,000 Minimum Viable Product grant from the NSW Government-backed Jobs for NSW, and a $15,000 TechVoucher through the Government’s Boosting Business Innovation Program.
“Through Jobs for NSW and the Boost program, the NSW Government is making smart investments to help create the businesses and jobs of the future for the people of NSW and helping companies drive innovation,” says The Hon. John Barillo, Deputy Premier and Minister for Small Business.
Accurait was also made possible through the CSIRO Kick-Start initiative which provides Australian start-ups and small to medium enterprises with funding support, and access to CSIRO’s research expertise and facilities.
While LeaseInfo anticipates its initial market will be largely within Australia, it plans to launch Accurait internationally in 2019.
“In Australia alone, there would be easily over one million commercial leases transacted annually, including equipment and vehicles. Manual lease abstraction is not only laborious, it can also be expensive and error-prone. Accurait presents an automated solution using highly advanced contract reading technology and not only saves both time and money, it reduces the risk of error,” Fonteyn says.
Accurait is expected to cater to the demand for digitalising lease contracts and complying with the new global accounting standard IFRS16 becoming effective from January 2019, requiring commercial and equipment leases to be recorded on the balance sheet.
“The impact will be significant for the retail sector with 95 percent of Australian retailers operating out of leased premises. The liability implications of IFRS16 are far-reaching and could hit hard, causing rising debt levels which will require all retailers at best to renegotiate debt covenants with financiers,” Fonteyn says.