8 Tips for Future-Proofing Financial Systems
Section: NASACT

The Center for Digital Government (CDG) recently conducted a survey of finance and budgeting leaders in state and local government and found many leaders expect to modernize policies, processes, and IT systems to make them more resilient in the face of future disruptions.
Leaders planning to upgrade their finance systems can improve their chances of success if they follow eight key practices. But before we get to that, let’s dig into the survey data.
Becoming more resilient

After the events of 2020 and 2021, it’s no wonder that public finance and accounting teams want better ways to keep on keeping on. Many had to revise budget forecasts, first as the COVID-19 pandemic threatened to reduce sales and income tax revenue, and then as federal stimulus programs and an improving economy provided relief. Stimulus programs also brought new regulations and reporting obligations for government teams.
Of course, it has always been important to closely track budgets and keep financial systems auditable. But the pandemic accelerated the need to modernize financial systems so teams could work quickly, accurately, and from anywhere.
In February 2021, the software company Workiva asked the Center for Digital Government to survey 125 city, county, and state government leaders about the issues they’re facing.
While many government teams are generally satisfied with how their financial IT systems performed during the pandemic, 28 percent are not very satisfied, or not satisfied at all, with their ability to create or update budget documents. The same percentage are unhappy with the way their systems can track and monitor grant awards and opportunities.
According to the survey, they have faced especially difficult performance challenges in three areas:
  • Budget planning and forecasting: 47 percent
  • Keeping stakeholders informed: 32 percent
  • Gathering and consolidating data: 30 percent 

Modernizing for the future
As the U.S. recovers from the pandemic, state and local governments are not necessarily going back to the way things were. About 40 percent of state and local government leaders say they plan to modernize their systems to improve resilience.
Seventy-one percent of leaders want those improvements to make their processes and workflow more efficient. As part of that effort, 38 percent say they want to improve their ability to share data and information internally and across agencies and departments. Another top goal, cited by 29 percent, is to improve budget planning and forecasting.

Process and policy changes

About half of government leaders say they want better document management and workflow systems; 34 percent want to increase the capacity to share data and information.
Workplace policies may also change. More than half of respondents expect to include new work-from-home policies in their modernization efforts, while more than a third plan to upgrade their cybersecurity policies.

8 best practices for modernization
In working with more than 250 government clients, Workiva has found that those who modernize their finance systems successfully tend to follow several key practices:
1. Choose technology that multiple teams and departments can use to solve multiple challenges. Solutions that support multiple functions may give you a higher return on investment—for example, perhaps a financial reporting platform can be used to create budget reports but also annual comprehensive financial reports and even maintain internal controls over reporting. With a single solution that an entire organization can use, it’s easier to collaborate across teams, agencies, and departments.

2. Look for solutions that make processes more transparent, auditable, and repeatable. A solution that provides well-designed dashboards provides real-time visibility into the status of any given process. Technology that automates routine tasks within the auditing process—evidence gathering, certifications, reporting, and more—lets the audit team focus on higher-value work.

3. Aim for flexibility, so teams can bring in data from any source and use it to create any kind of output or disclosure. This allows organizations to integrate new solutions with applications already in place, as well as accommodate future upgrades to new applications.

4. Seek a solution with dynamic linking. This mechanism connects data drawn from a source and syncs it across all the files in which it is used, including charts, tables, and reports. Dynamic linking ensures consistency and accuracy. When a data point is updated in any document, the system reflects that change in all linked documents.

5. Centralize data gathering in a single platform. Ideally, key contributors should be able to enter data themselves, so the core reporting team does not bear the full burden of data gathering. 

6. Choose a solution that provides for version control. This ensures that when team members collaborate, everyone is working with the latest version of the document. A cloud-based system naturally provides this capability, allowing several people to work on a document simultaneously. 

7. Optimize ROI with a solution that can adapt as demands evolve. New legislation, regulations, or grant opportunities may affect the kinds of reports a government must produce. Organizations should not have to buy new software every time requirements change. 

8. Partner with a provider whose vision of innovation matches your own. A solution that fits your needs perfectly today could feel outdated in a year or two unless your software vendor keeps its eye on the future. Does the company regularly release updates? Does it have a track record of evolving to keep pace with changing regulatory requirements? Will it be able to integrate with new software in the future? Can its solution adapt to new modes of work, such as a hybrid remote/in-office model, while maintaining strong cybersecurity controls?
A government that chooses a versatile, flexible financial management system, designed to serve the whole enterprise, from a vendor that will adapt its solutions to evolving requirements, will be in a strong position to thrive, whatever the future may bring.
Find more insights from Workiva at workiva.com/resources.