FINANCIAL MANAGEMENT/Local convergence
Accounting departments in local governments that work with offices in different locations face physical, reporting and logistical constraints. Finance managers often struggle to quickly distribute reports, collect and approve receipts, and manage budget revisions when department heads, accountants and local government officials are geographically distributed.
For example, different offices have different financial reporting and account structures. While a school department may require more financial detail than other departments within a township, a county highway department may need to track special projects.
Gathering accounting information in an organization with multiple locations becomes more complicated during budget cycles when the central office, CEO, remote department heads or finance leaders need current information, which includes revisions from workers in other locations. And, having multiple locations may delay such things as signatures for approval.
Many cities and counties have external approving agencies, such as a finance committee or board of directors, who require information about budgeted and requisition amounts, confirmation of prior approvals, or impact on cash reserves. Ensuring that the external agencies have the most current information when they need it often creates challenges for accounting departments.
To overcome those challenges, some cities and counties are beginning to use centralized, online accounting systems that process requisitions, approvals, budget changes and accounts payables. The system tools and organization’s data are located on a server, which can be accessed from multiple locations, as long as users have the proper log-in information and security access rights. One advantage an online system provides is the need for only one hardware location to house data and one IT staff member to maintain it. In some cases, cities or counties may choose to take advantage of the vendor’s hardware and technical expertise, thereby eliminating the need to purchase or staff their own.
In addition, an online system makes it easier for department heads to make purchases, allocate budgets, and direct staff on future expenditures. In essence, the department head can access data without depending on the accounting manager to provide it. A centralized accounting system reduces auditing costs and consolidates reporting and gathering monthly, quarterly and annual financial data from each location and department.
Department heads always can remotely access an online accounting system to run queries. Using real-time financial data ensures that department heads, finance committees and accounting teams all are working from the same set of information. Department heads can develop reports, which can be accessed in formats such as Excel, PDF or Microsoft SQL, and they can continuously refresh online information as transactions post to the accounting system, ensuring everyone uses the most current and up-to-date numbers.
Organizations should implement security measures, enabling only department heads to access relevant data. An online accounting system should allow data input, inquiry and reporting controls to reflect management responsibilities, allowing users to access only their department’s projects or grants data.
The author is general manager of Denver-based Kintera FundWare.
