FINANCIAL MANAGEMENT/Automation frees time for analysis

Sound financial decision-making is based, in part, on effective use of financial reports. For accountants and financial analysts, the process of providing department managers with the data they need can mean producing reports in multiple formats. By computerizing the financial reporting process, local governments can put an end to manually generating and updating paper reports for individual managers. Through automation, financial staff can extract data, input revisions and update calculations electronically, giving them more time to concentrate on analysis and planning.

Orange County, Calif., is one of many local governments that are benefiting from automated reporting. Prior to making the transition from paper reports, accountants entered data from the county’s 5,000-page Expense Budget to Actual (EBA) report into multiple formats to meet managers’ needs.

For the Social Services Agency alone, consisting of 4,000 employees, the county had one accountant rekeying data from the EBA report into multiple spreadsheets for several different managers. Each manager wanted to see data in a different format (e.g., with detail, as a summary, with year-to-date figures, with month-to-date figures). Rekeying that data took days, and it took the accountant away from the task of analyzing data.

County officials had to decide whether to force all of the departments to adopt a single method of financial reporting or to find a way to process and manipulate multiple types of reports. Changing the accounting and reporting method to a single standard not only would be costly and time-consuming, but it would force managers to adopt financial methods that may not be appropriate for their departments. Instead, the county needed a solution that would allow it to use existing financial reporting systems more effectively.

In October 2001, the county purchased Monarch software, manufactured by Lowell, Mass.-based Datawatch. The software allows the county’s financial staff to electronically find, tabulate and aggregate information from financial statements and accounting reports, such as general ledgers, cash journals, and receivables and payables.

Analysts can open the files using the software and extract the data in any way they need. The extracted data then can be sorted, filtered and supplemented with additional data.

Data can be exported in a variety of formats, including Excel, Access or 123. In addition, analysts can produce graphs that incorporate data from multiple reports and paste them into other software applications, including Word or PowerPoint.

By using the computer-generated reports, analysts can rely on the information without hesitation because the data already has been validated by the computer. The manual extracts, on the other hand, required analysts to validate the financial data, often by comparing the extracts to official reports.

The county’s accountants now get an electronic copy of the EBA report and process it to produce different views of data for each manager. Templates define the data filters, sorts and summary views for different managers, and they can be used repeatedly.

Orange County has developed templates for all of its major reports, so analysts can access the data in a workable tabular format. Now managers are getting the data they need in hours, not days, so they can actively manage their controllable expenses.

By using the software, county officials can devote more time to financial analysis so they can identify minor issues before they grow into significant problems. By using electronic formats, the county is saving on paper and printing costs as well.

The author is the auditor-controller for Orange County, Calif.