Organizations in the public sector support many of the same accounting activities as commercial companies: cash management, analytical report tracking, creating budgets, as well as identifying and tracking operational costs. But solutions designed exclusively for commercial use often fall short of supporting the full needs of government and public administration organizations. Support for fund accounting practices and GASB compliance set certain accounting systems apart as particularly applicable for use in the public sector. Discover more about your options for government accounting software in this article.
While government organizations aren’t typically engaged in the standard commercial enterprise of generating profits, there is still a need to make financial management as efficient and accurate as possible. The pressure to lower operating expenses and maintain error-free books is just as real for public sector organizations as for any business.
In order to track the allocation of funds for specific purposes, government entities use fund accounting practices. Funds are essentially accounting entities with self-balancing accounts designed to record cash and other assets, as well as related balances and liabilities. A fund accounting approach allows government entities to track all expenditures back to specific fund sources.
Government and public administration organizations also need software that is compliant with GASB (Government Accounting Standards Board) regulations. While the Government Accounting Standards Board is not actually a government run program–it’s a non-profit standards board–many states require compliance with GASB. It is in general considered to be the gold standard for defining government accounting practices. One of the standards that GASB sets is actually a requirement for a fund accounting approach to managing financial data.
One of the challenges of meeting government accounting requirements is that there are so many different types of public sector organizations. Local, county, state, and federal levels represent just one aspect of the variety. In terms of which accounting software is appropriate, the more relevant difference can be seen in the multitude of functions that public sector bodies serve. Without attempting a comprehensive list, it’s clear to see that there are major differences between the type of accounting features needed by: fire and police, health care and social service departments, tax related groups, public works departments, the courts, and various elected officials.
The challenge of meeting such disparate needs is compounded by the fact that there a major benefits to using a comprehensive system for organizations with a number of different departments. Integrated information allows public sector entities the ability to lower the total cost of ownership by creating efficiencies associated with keeping all relevant information within one centralized database. Hardware requirements are significantly reduced when records are not duplicated across multiple systems. There is a major time savings impact, as well, when staff can access information easily from within one single system.
Typical financial management functions included in government and public administration systems include general ledger, accounts payable, accounts receivable, and budgeting. Additional modules frequently include applications such as billing programs, job costing, project management, licensing, inventory control, and purchasing.
Most government agencies require three bids when purchasing. Locating three software solutions that can meet your needs can be time consuming. Save some time and let us do the leg -work of identifying three or more appropriate solutions for you to include in the bid process. Whether you are looking for a complete ERP system or specific functionality to augment existing software, through a brief phone call, our software specialists will look to better understand your business and software needs to help you locate the most relevant solutions for your requirements. Get started today!