7-minute read
State and local government finance operations have spent the last two years navigating massive disruptions to how they work. But with challenges come opportunities. So how are these organizations taking advantage of the changing landscape to push forward and modernize their operations?
This spring, BlackLine Senior Director of Solutions Marketing Molly Boyle sat down with Justin Marlow and Kristen Cox, Senior Fellows at our Center for Digital Government, to unpack this question.
“One of the biggest things we're seeing,” Boyle says during the webinar, “is a big shift away from the traditional back-office accounting and finance roles where we're reporting on last month's or last quarter's results.
“We're seeing a demand for more frequent updates and input, and more intelligence coming out of Accounting and Finance is really needed by the business to drive strategic initiatives.”
She explains that leaders can no longer wait for these updates to come at the end of the month or the quarter. Instead, accounting and finance business partners must be actively involved in ongoing decisions and operations—and that requires the kind of real-time data that is hard to provide with manual systems in place.
At BlackLine, we often see that state and local organizations benefit from a quick win to help them create some momentum toward transformation. Organizations and teams often have disconnected systems and difficulty collaborating with one another or establishing a single source of the truth. They don't know where to start because they simply don't know what they don't know.
To help get you started, we’ve identified the top five trends we’re seeing among state and local government organizations. We’ve also broken out some of the steps they are taking to achieve these goals, so you can use them as a blueprint in your own accounting and finance processes.
Focusing on Better Close Management
Many accounting and finance teams live and die by the end-of-the-period checklists on their desktops (or on post-its stuck to their desks). This reliance on manual processes can create confusion and block efficiency across your team.
To modernize, many state and local government organizations are bringing that information together in the cloud—where everyone can work from the same source of truth.
By focusing on unifying all close and close-related activities, including tasks, reconciliations, supporting documentation, and audit PBCs, they are standardizing processes and quality.
This includes:
Aggregating tasks and documents in the cloud
Centralizing controls, reconciliations, and details
Reporting on status and KPIs in real-time
Replacing emails and phone calls with alerts
This kind of consolidation helps finance leaders reveal bottlenecks, standardize processes, and evaluate team capacity. It also helps identify short- and long-term opportunities and goals. And, of course, when organizations begin with this sort of low-hanging fruit, they can use the momentum to move on to some of the more substantive transformations below.
Building Accurate, Cloud-Based Balance Sheets
Balance sheet integrity is another critical early focus area for local government organizations as they modernize. Specifically, they are substantiating all their balance sheet accounts as they consolidate them in the cloud, which includes balances, transactions, supporting documentation, comments, and workflow.
To do this, organizations are:
Standardizing reconciliation templates
Unifying data, supporting documents, and comments
Embedding controls, policies, and procedures
Ensuring segregation of data
Ensuring integrity means not just making sure that you have your general ledger data complete, but that it's entirely accurate—so your auditors can come in and re-perform and validate that information. Following best practices and standardizing to build out your actual reconciliation in the cloud will help get your workflows in a single place and improve completeness and accuracy.
Visibility & Reporting
One of the benefits of consolidating in the cloud is the boost it gives to visibility and reporting. As state and local organizations modernize, they are more focused on reporting on assignments, status, and close metrics. They are also using data and reporting to provide deeper insight into errors, results, and trends. Finally, they are using this data to drive accountability and partnership through visibility.
This includes:
Viewing close activities and progress in one place
Identifying risk areas and bottlenecks at a glance
Analyzing details and trends across periods
Using standard reporting or creating their own
Very often in Finance, what gets measured is what gets done. As accounting and finance teams strive to provide more insights, it is critical to have that information consistently available on demand.
State and local organizations recognize this and are creating rules-based reports based on their identified KPIs. By using technology to create these real-time dashboards, they can now deliver these meaningful pieces of data whenever and wherever they are needed.
Remote Audit Enablement
Once organizations have consolidated their information and made it accessible, they can move on to other important goals. One of these is making that data available for a smoother audit.
Audit enablement can be a challenge for any organization and will benefit exponentially from modernization. State and local governments can make this easier by enabling a remote audit—with the ability to manage audit requests collaboratively and support for auditor-specific user roles that control information access.
This includes:
Importing a PBC list to track and manage audit
Granting tailored access for auditor self-service
Share supporting documentation
Track and report on certification details
A remote audit will also facilitate easier access to completed activities, certification checklists, supporting documents, and comments. By activating cloud collaboration and establishing a single source of truth, state and local agencies can reduce the cost of their audits and the effort required to support them.
Essential Automation
Finally, state and local government organizations are using automation to reduce the overall level of effort required for ongoing compliance. By identifying and automating manual tasks and low-value, repetitive work, these organizations are transitioning to a more exception-based approach.
More modern organizations are focusing on:
Auto-certifying based on materiality thresholds
Auto-reconciling subledger to the general ledger
Scheduling review frequency by account
Providing a complete reporting and audit trail
This frees employees from tedious manual busywork and enables them to focus on risk and timeliness—based on the organization’s actual needs and requirements. The result is a faster close, where the organization can automatically certify account balances based on business-driven parameters.
It’s important to note that there's no one-size-fits-all answer to transforming Accounting and Finance. Your organization should take the time to set these goals and prioritize them based on your specific needs and challenges.
Watch the webinar on demand to discover more about how state and local governments are modernizing accounting, and achieving results like reducing manual journal entries by more than 80%, and enabling Accounting to work securely and efficiently from anywhere.