4 Reasons Why Government Agencies Need Fund Accounting Software
As a government agency, your team is used to doing more with less. But just because your accounting is complicated—with hundreds of ways monies flow in and out of your budget—it doesn’t mean your accounting system has to be difficult to use. Or that your team has to jump through hoops just to run a Statement of Activities that considers fund restrictions.
Fund accounting software provides government agencies with the organization they need to track hundreds of funds while also establishing the internal controls and transparency required when stewarding constituent money.
What is Government Fund Accounting Software?
Tracking myriad income sources and providing clear transparency on the revenue, expenses, and liabilities for each fund is a difficult task for even the most robust spreadsheet. Fund accounting software is an accounting system designed to make managing restricted funds streamlined and easy to track.
Whether you are part of a housing authority or a parks and recreation department, you need to quickly differentiate revenue from fees for a specific program and grants that require detailed reporting. With fund accounting software, you can see the status of each fund quickly and easily. You can track and report income and expenses by program or department without a complex account structure.
Because fund accounting software separates restricted funds from unrestricted, you don’t need any workarounds to comply with GASB standards. Your government agency’s financial statements clearly show fiscal accountability for both revenue and expenses.
Simplified Processes for Your Government Agency Finance Team
If you are like most government agencies, the employees in your finance office are stretched thin. Help your team be more productive by removing complex procedures and giving them a single source of truth for your data.
With fund accounting software, all your financial information is in one place. Simple integrations with Excel enable you to get batch information into the system quickly and easily without constantly toggling between spreadsheets. Having all your data digitally in one system also helps you reduce paper processes, decrease your footprint, and get expenses approved faster.
When you have all your data in one place, it also helps streamline the budget process. You can easily provide budget managers with online access to up-to-date budget performance data. This also simplifies the audit process because invoices and external documents are stored directly in the project, and no one is tracking down last-minute paperwork from email accounts or computer folders.
A single source of truth for everyone in your government agency can also enable you to administer more grants without adding staff. You reduce the amount of time needed—and steps in the process—to meet grant reporting requirements. Because fund accounting systems have intuitive project and grant tracking, you don’t have to waste time formatting charts and graphs. You have reports at the touch of a button with no pivot tables required.
Increased Accuracy of Your Government Agency’s Finance Data
When your team is juggling multiple spreadsheets and sources of information, mistakes are inevitable. Integrations and automation cut down on the accidental errors that come with manual entry and line-by-line reconciliation.
One of the simplest ways to reduce errors from manual data entry is to pull data directly from the source through an integration—cutting out the manual entry entirely. Fund accounting software often has integrations that pull data directly from your payroll or specialized billing systems to the appropriate GL. You can also tie in your cash management system to include non-digital payments.
Fund accounting software also can reconcile your bank and credit card statements automatically by pulling in feeds directly from your financial institutions, saving your team time and improving accuracy. With all your government agency’s financial information in your system efficiently, you can get real-time updates to help you identify opportunities and risks.
Improved Transparency for Your Agency’s Stakeholders
Having a single source of truth for your agency’s finances, and confidence in the data, you can provide improved transparency to those who need to know your progress. When you understand both your historical data and can run scenarios on potential outcomes quickly and with up-to-date information, you can create a clearer picture for your departmental leadership and external stakeholders.
Fund accounting software makes it easy to budget across multiple years or customizable fiscal periods. You can run unlimited budget scenarios at the grant or project level to better set data-driven strategic priorities for your agency.
You also increase transparency when you have clear data visualization and professional reports with a click of a button. Flexible reporting options help you show high-level information with dozens of pre-built reports. Or you can dig into granular data with individual filters and parameters that matter to your leadership. You can also download your reports as PDFs to share with FOIA requests or send recurring reports, so stakeholders get them before they have to ask.
With institutional knowledge housed in the software, you also break down silos of information. Everyone who needs to know vendor contacts or whether payments were received can access that information, helping decisions get made faster and new employees get up to speed quickly.
Stronger Internal Controls for Better Security
When you are dealing with constituent and taxpayer money—through direct payments or grants from the federal government—it’s crucial to be a good steward of the funds you receive. By locking down your internal controls within your accounting system, you can be confident that those who need access to the information can see what they need, and nothing else.
Translate your internal controls and accountability structures into your fund accounting software to create security rights by fund, account, or program. There is no reason for the County Sheriff’s office to be able to see what the County Clerk is doing and vice versa. Even within a department, you can designate different roles, functionality, and level of access for different stakeholders and expense amounts. For example, your office manager may be able to enter invoices but not approve expenses.
You can also set up view-only rights so department heads and managers can log into the system to retrieve information they need without making demands on the accounting staff.
More Relevant and Reliable Data-Driven Decisions for Your Government Agency
Fund accounting software is designed to efficiently manage a variety of income streams. And when your government agency can easily see all the funds—restricted and unrestricted—in one place, you can drill into the data to find more efficiencies and better ways to steward the funds.
If you are ready to learn how fund accounting software can help your government agency be a better steward of your income, check out our datasheet, Blackbaud Financial Edge NXT® for Public Sector and Government Entities.
Fund Accounting Software that Drives Impact
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