Citizens across the nation are quick to examine the financial spending patterns of their local and statewide government agencies. Fiscal accountability and taxpayer transparency are hallmarks of a well-run agency, and one way to achieve these benchmarks is through the implementation of cloud-based financial systems that have found favor in the commercial world.
However, governments often overlook valuable business practices used in the private sector, despite the marked differences from the commercial realm. Fund accounting, encumbrances, requirements and state-by-state regulations governing public finance all contribute to the differences. Likewise, budgeting in public sector is a dramatically different process. Public sector budgeting is both a policy setting and legal control device with different implications on how budgeting software applications are configured and used, while commercial entities use budgets for managing expenses and forecasting cash flow and profitability.
Despite the difference, government agencies such as the have adopted private sector solutions to dramatically improve the financial consolidation, reconciliation and close process. In particular, enterprise performance management (EPM) solutions address the following business functions:
Purpose- built applications widely used by the private sector can provide similar benefits to the public one. Rather than using disconnected applications or spreadsheets, these private entities use Commercial off-the-Shelf applications from a variety of vendors (including Oracle) to support these processes.
Current close processes can be inefficient. The majority of public sector customers lack a purpose-built application for financial consolidation and reconciliation, instead using inefficient manual processes, reports and spreadsheets. The majority must make manual adjustments during the close and reconciliation process. In short, there is great room for improvement.
Oracle recently , both Oracle and non-Oracle customers, to understand the value they received from using EPM cloud applications. The results were impressive:
In addition, respondents who use account reconciliation were rewarded with instant visibility into the progress and status of reconciliations, reducing errors and speeding up the close process.
Artificial intelligence and robotic process automation has been built-in to purpose built applications for financial consolidation, close and reconciliation is the introduction of new technologies such as artificial intelligence and robotic process automation. These emerging technologies can improve accuracy, reduce risk and streamline the entire financial close and reporting process. For example, a process that has eight steps now could be compressed to three steps with higher levels of automation.
So what should public sector entities be thinking about? First, familiarize yourself with the purpose -built applications available today from Oracle and other vendors. You can start by looking at , one of the most complete offering on the market. Second, examine inefficiencies in your current consolidation, close and reconciliation processes and think of areas for improvement. You’ll see how EPM applications can support changes in business processes that improve accuracy, efficiency and your ability to produce timely reports.