GASB 87 and GASB 96 have significantly changed governmental accounting and financial management by revolutionizing the management of leases and subscription-based information technology arrangements (SBITAs).
To ensure continuous compliance with these critical standards, organizations that once depended on third-party data management are now strategically moving towards a combination of co-sourcing and the use of sophisticated software solutions. This transition is motivated by the substantial advantages of having full command over their data.
When it comes to outsourcing, it’s not only the control that gets handed over but all of your organization’s data. If your organization needs to pull that data back (for your own analysis or to switch accounting firms) it can become very difficult.
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Co-sourcing is a business practice where an organization partners with an external service provider to manage and execute a portion of its business functions or processes. This collaboration combines the strengths and capabilities of both the company and the external provider to achieve greater efficiency, expertise, and flexibility. Unlike outsourcing, where an entire function might be handed over to an external party, co-sourcing involves a more strategic partnership where both the internal team and the external provider work closely together. |
Co-sourcing, particularly with your accounting firm, offers the benefit of leveraging specialized expertise while maintaining control over the compliance process. It ensures that knowledge transfer and system control remain with your organization, enabling a switch in service providers without the risk of losing institutional knowledge or disrupting continuity.
Modern software solutions like DebtBook act as an archive of this intelligence, housing all the relevant data and schedules in a system that your organization fully owns. This synergy not only streamlines the compliance process but also fosters a sustainable approach to financial management.
By choosing to utilize sophisticated software systems and co-source with accountants, your organization can create a resilient framework for managing leases and IT subscriptions that is both compliant and cost-effective.
Co-sourcing for GASB compliance is a strategic model where your organization partners with an accounting firm to manage and execute GASB-related tasks through shared access to software that you own. At the same time, your organization maintains oversight and control over its financial systems and data.
This approach provides a dual benefit by allowing your organization to:
By using modern software solutions, internal staff can collaborate with external experts, ensuring that GASB 87 and GASB 96 requirements are met with accuracy and efficiency.
When compared to traditional outsourcing models, co-sourcing stands out for its collaborative nature.
Traditional outsourcing often involves handing over complete control of specific functions to a third party, which can lead to a dependency on external providers and a potential loss of internal expertise.
Co-sourcing, on the other hand, promotes a partnership that builds internal capacity while still benefiting from external expertise. This model not only supports compliance with complex regulations but also empowers internal teams by keeping them engaged and informed.
Co-sourcing is particularly well-aligned with the evolving needs of organizations who face changing financial and regulatory environments and are also small or under-resourced. These organizations benefit from co-sourcing as it allows for flexibility and scalability in addressing GASB standards, which can be especially critical when undergoing transitions, such as accounting firm changes or shifts in financial strategy.
It also ensures your organization has continuous access to your financial data. This accessibility is important for:
Owning your data for GASB 87 and GASB 96 compliance is not just a matter of record-keeping—it’s a strategic advantage.
A model that incorporates a software solution like DebtBook, co-sourced with a CPA firm for support, allows organizations to maintain data ownership and control. This approach ensures that regardless of who is doing the work—be it your organization itself or an accounting firm—the data remains within your domain.
When you have control over your data, you can:
When it comes to working with external partners there’s one thing that’s almost always true: contracts will eventually end and new firms will step in. When this happens, how can you make sure that you keep things running smoothly and the stress levels within your team are properly managed?
Co-sourcing allows for a continuous flow and retention of knowledge within your organization. This is critical when transitioning between accounting firms, since your internal team retains ownership of the process and understands the underlying details. This retained knowledge can be efficiently transferred to the new accounting firm, smoothing the transition process.
Since your team remains involved, they are better positioned to provide insights and historical context to the new accounting firm, creating a seamless handover and continuity in reporting and compliance practices. This can be particularly beneficial during an external firm transition, as the incoming accounting firm will not have to start from scratch or rely entirely on the outgoing firm for historical data and process understanding. Your team acts as a bridge, ensuring continuity.
With co-sourcing, the transition to a new accounting firm can be easier because your team has ongoing involvement and familiarity with the GASB standards and associated processes. This helps in providing consistent and accurate information to the new accounting firm, mitigating risks associated with miscommunication or lack of information continuity.
Having this data not only fosters continuity even when external partners change, but also paves the way for long-term cost savings.
When you have a system like DebtBook, you’re not just storing data; you’re actively managing it. This system becomes a powerhouse tool for your financial strategy. Every time you need to prepare for an audit, or make strategic decisions based on your lease and subscription commitments, the data is ready and waiting. There’s no need to pay for re-entry of data, no delays in getting the latest information from external partners, and no re-analysis costs.
This kind of setup empowers your organization. It means you're not just reacting to compliance needs or scrambling during audit season. Instead, you're making informed, strategic decisions throughout the year, which can lead to significant cost savings. For instance, recognizing overlapping subscriptions or leases that are not serving your strategic needs anymore can be identified swiftly and adjusted, thus saving money before it even becomes an expense issue.
And because your team has access to your data and is familiar with this system, they can leverage the data for more than just compliance. They can use it for strategic planning, risk management, and even forecasting.
There are going to be times when your organization is juggling multiple real estate leases and one is about to expire. If you miss that 90-day notice period for renewal, you're not just looking at potential eviction; you're facing the hassle of relocating your entire team and possibly higher costs to secure a new lease.
Now, apply the same scenario to your software subscriptions. A lapse there could disrupt services critical to your daily operations. Having control over your data means you can keep a close eye on the lease and software agreements you manage and help keep these disruptions at bay.
Regularly reviewing your leases and subscriptions allows you to reassess needs, negotiate better terms, or even discontinue services that no longer serve your strategic goals. When you manage this data through a shared software system with your accounting firm, you both have instant access to the data needed to make these calls effectively so nothing is overlooked.
Having a co-sourcing system in place empowers you to manage your data effectively, maintain continuity in your processes, and control costs. It aligns with the best interests of your organization by providing a consistent and reliable data foundation that supports both current compliance and future financial strategies.
Software solutions like DebtBook play an important role in enabling your organization to take ownership of its compliance processes. Such software solutions serve as robust platforms for data management, safeguarding against the employee turnover that is all too common throughout the public finance industry.
By maintaining data in-house within a reliable data management system, you protect against the loss of institutional knowledge and ensure continuity through staffing changes.
A platform like DebtBook can do more than just retain data; it empowers decision-makers with immediate access to their data, facilitating proactive management and strategic analysis. DebtBook keeps your data and workflows in a centralized, audit-friendly platform, so when key performers leave, core processes don’t break.
This capacity to self-analyze allows for the identification of cost-saving opportunities and risk assessment without the lag time associated with requesting and receiving reports from third parties. It’s a sustainable approach that equips your organization to not only meet current GASB 87 and GASB 96 compliance standards, but to also adapt swiftly to future changes and challenges.
By using modern software solutions, your organization can ensure that your data remains accessible and manageable, regardless of external accountant involvement. This approach not only builds resilience against potential disruptions but also aligns with your evolving needs if your organization seeks greater control over its financial future.
Initially, it might seem that there's less gross revenue for a CPA firm when such a system is implemented—since the heavy lifting of data entry and initial system setup could decrease. However, the reality is that this shift leads to a more streamlined process that can help increase profit margins.
As an accountant, what does your deliverable really do for your clients? Does it just keep them compliant for now, or does it empower them as an organization going forward? It’s about more than just ticking off compliance boxes. It's about delivering a tool that improves their operational and financial processes.
Implementing a solution like DebtBook means you’re not just providing a band-aid; you're implementing a long-term, sustainable solution that enhances your client's ability to succeed. This kind of deliverable transforms the standard CPA-client relationship. It's about building your brand as a firm that equips its clients for future challenges, not just current ones.
In a co-sourcing model, the relationship between outsourced accountants and their clients is redefined from a traditional service to a collaborative partnership. Benefits of co-sourcing for accounting firms include:
Accountants are no longer just executors of compliance, but become strategic allies who empower their clients by helping to implement systems like DebtBook. This shift allows the client to maintain control over their data and compliance processes, setting them up for future success without complete reliance on external parties.
This positions accountants not as a crutch for compliance, but as a catalyst for an organization’s financial and operational growth.
Co-sourcing is a large time-saver for accountants, particularly those who are also strapped for personnel and time. Accountants no longer have to burn time running and re-running one-off reports. They can spend time on adding strategic value and building meaningful client relationships.
This not only improves accountant work satisfaction but also enhances the overall value they provide to their clients, leading to stronger, more resilient business relationships.
The role of accountants extends beyond the deliverables of a PDF or spreadsheet; they add value by advising on the implementation of solutions that ensure their clients are not just compliant today but are equipped for tomorrow's challenges.
By guiding the setup of robust lease or subscription management software, accountants promote their clients' long-term strategic decision-making. This empowerment enables clients to self-service many of their one-off tasks and make informed decisions without unnecessary delays.
Ultimately, the co-sourcing model promotes a win-win situation where accountants can build stronger, longer-lasting relationships with clients, not by gatekeeping information, but by equipping clients to be more independent and proactive.
The financial logic of co-sourcing with DebtBook versus traditional full outsourcing, reveals an interesting look at cost efficiency and strategic control.
Despite the assumption that it’s more expensive to pay for both the accountant and the software, cost analysis between these two approaches often tips in favor of co-sourcing due to the value it offers.
While full outsourcing may appear to reduce the immediate burden on your organization's resources, the benefits of owning your own data will save time and provide valuable control and insight. If your organization needs to get its data back, it can be a difficult and drawn-out process.
The incorporation of software into the co-sourcing model represents a smart financial strategy. It’s an investment in a tool that delivers ongoing value and enables your organization to modernize, allocating resources to areas that can drive growth and efficiency, rather than repetitive compliance tasks.
This model not only positions your organization for immediate compliance success but also paves the way for sustained financial health and independence.
Long-term financial benefits of implementing a software solution include:
Co-sourcing is made even more cost-efficient with DebtBook:
It's clear that establishing a proactive co-sourcing system is not merely about compliance or managing the present—it's fundamentally about empowering your organization for the future.
If you're partnering with accountants because of time constraints and resource limitations—common challenges for many—you need to address this strategically. Engaging with your accountants is excellent, but ensure that the data and processes they help manage are housed in a system that you own and control. This approach guarantees that no matter the changes or transitions your organization undergoes, the critical data remains accessible and within your grasp.
By doing so, you anchor your team in a position of strength, equipped to handle future changes efficiently and confidently. This isn’t just about meeting today's needs but ensuring that every step forward is on firm, familiar ground, reducing future costs and enhancing operational agility. The key is collaboration—working together to establish a robust system that serves both current needs and future growth.
Disclaimer: DebtBook does not provide professional services or advice. DebtBook has prepared these materials for general informational and educational purposes, which means we have not tailored the information to your specific circumstances. Please consult your professional advisors before taking action based on any information in these materials. Any use of this information is solely at your own risk.