Presented by SAP Concur
Modern financial reporting tools have become a key part of resiliency and continuity efforts for agencies — for good reason.
State and local government agencies are driven by a mission to serve citizens effectively, and being responsible stewards of taxpayer dollars is a large part of that. But city, state and local agencies across the U.S. face tremendous budget pressures and complicated compliance requirements.
Legacy expense and invoice reporting systems that rely on manual processes and often outdated information technology systems are yet another challenge. For example, agencies that use legacy expense reporting systems or rely on paper could waste up to 3,000 hours per month processing expense reports and invoices manually, according to a 2019 study by SAP Concur and Kelton Global.
Accuracy is also an issue. Even small errors in invoices can have big consequences. More than a quarter of financial decision-makers said they have unintentionally reported incorrect budget data at their organizations because of inaccuracies in invoices or expense reports, according to the survey.
“When you think about your government workers, they are working on behalf of the taxpayers. And taxpayers expect efficiency and they expect accuracy,” says David Ballard, senior vice president of public sector at SAP Concur, one of the leading expense, travel and invoice management services providers.
In other words, for state and local government agencies, now is the time to stash the stapler and those piles of receipts and modernize.
The Next Level of Finance Management
Unfortunately, much of the technology that underpins state and local governments’ financial management systems is of another time.
“Most state and local government financial reporting was developed during what we might call the rotary phone era, even though we now live in the iPhone era,” says Justin Marlowe, the editor-in-chief of Public Budgeting & Finance, the leading scholarly journal in public financial management, and a professor of public finance and civic engagement at the University of Washington.
But things are changing: After years of stasis, there’s now a push for state and local agencies to adopt digital tools and technologies to better track organization’s spending. There are growing calls for states and localities to adopt some private sector best practices, such as reporting financial statements in the digital XBRL format and to increase the timeliness of financial reporting.
Marlowe says he has also seen a greater merging of finance and IT in recent years. That’s partly driven by an influx of new talent joining the ranks of state and local government agencies, who are pushing for better technology, more transparency and other improvements to financial reporting.
“I think that's only going to continue, because not only are these people going to work in government, but they're also soon to be taxpayers and citizens, and it's what they're going to demand,” Marlowe says.
A transition to a paperless system minimizes overhead costs significantly, speeds up time to delivery and payments, and increases the ability for throughput within an organization’s accounts payable and receivable office, says Carlos Soto, a former technology innovation manager for Bank of America.
“This then allows you to focus on other aspects of your financial planning and analysis, as opposed to having to troubleshoot end-user errors that are happening from manual transactions that some workers, particularly remote workers, often find challenging and onerous,” he said.
By having paperless billing, finance departments can also seamlessly flip a switch when a disaster happens that requires the business continuity planning and execution to manage an increase and scale of its remote workers. This allows organizations to take three crucial steps: provide easy tools for employees, realize cost savings, and ensure compliance.
Automated tools can automatically create an audit trail at the beginning of a transaction and create parameters that keep employees compliant by default throughout the spend process, streamlining workflows and freeing up employees from getting bogged down in reviews associated with manual audits.
The Power of an Integrated Solution
When it comes to automating spend management, it’s important to have an integrated solution. That’s because each element of an organization’s spend is a link in the entire financial management chain. Errors and inefficiencies in one part of the process can hinder other parts as well.
SAP Concur solutions are powered by AI and ML that allow agencies to manage all aspects of their financial reporting seamlessly, including digital tools that automate the processes involved in invoicing, expense reporting and travel-booking.
The Invoice application automates the invoice process, helping eliminate late payments and manage cash outlays. Many organizations are forced to have finance staff spend countless hours reviewing invoices and tracking down documents and approvals. The Invoice tool streamlines purchase requests and automates approval. Machine learning captures invoices and since organization policies are already built into the solution, noncompliant expenditures are automatically flagged.
The Expense solution allows employees to see all of their expense data in one place. It enforces spending policies set by the organization and captures and itemizes an expense automatically.
“All that person has to do is come in and review that item, and literally in one click can be done with it,” Ballard says.
While each tool is powerful on its own, one of the central benefits is they are part of a platform — the tools are designed to work together.
“Tying that all together into that single operational platform is probably the biggest value that we bring,” Ballard says. “Instead of having a point solution, being able to incorporate all that data from all corners of the operations into a single platform is really key.”
The Roadmap to an Automated Future
When it comes to implementing an automated solution, concerns about technical debt and legacy systems, sometimes decades old, are among the biggest hurdles to overcome, Ballard says. IT leaders are sometimes hesitant to get rid of highly customized, expensive-to-run legacy systems. In part, that’s likely because of the misconception that rolling out a digital solution requires a huge implementation.
“What we’ll find is that the cost of putting an entirely new system and ongoing maintenance is actually cheaper than what they're paying for the current maintenance,” Ballard says.
Further, as Marlowe points out, digital invoicing and the ability to run purchase order processes internally through digital systems, rather than moving paper, “just fundamentally transforms everything.”
“When you think about the ability to have digital automated processes that not only get the work done that much faster and that much more transparent, but you're talking about changing business processes and making them technology-driven rather than people-driven,” he adds.
Rolling out automated, integrated solutions for financial management also provides opportunities for an organization. For example, the switch to paperless financial systems can be a chance for the chief financial officer and finance departments to collaborate more effectively with the chief information officer and IT shops.
“We really advocate for bringing together the CFO and CIO organizations to have a conversation because those are the two functions that really need to collaborate,” Ballard says.
Automating spend management is also about getting tools in the hands of front-line employees that allows them to do their jobs more effectively.
“You have tools that people really want to use and tools that are highly valuable to the business side of the organization,” Ballard says.
This content is made possible by our sponsor SAP Concur; it is not written by and does not necessarily reflect the views of Route Fifty’s editorial staff.