There has to be a better way of compiling consistent financial reporting data for your Annual Comprehensive Financial Reports (ACFR) than tracking down information across different spreadsheets, juggling multiple data sources, and hoping for the best when it comes to accuracy.
Enter debt management software, an up-to-date, secure, and centralized data source that helps public finance teams operate efficiently, collaborate effectively, and make better decisions on outstanding and future debt obligations—all without deciphering convoluted formulas across countless spreadsheet tabs.
Let’s dive into how efficient debt tracking and management can enhance your year-end reporting and help you generate in-depth and granular reports in a matter of clicks, not weeks.
Common Challenges of Debt Management Practices
Traditional practices may cause your public finance team to look at debt management and year-end reporting as a stressful chore. Y
our team is likely juggling multiple data sources and versions of spreadsheets, manually updating tables, tracking down information, and potentially missing reporting deadlines or payments in the process.
Not only do traditional debt management practices create a lot of inefficiencies, but they also create a high risk of inaccuracy due to human error.
In the end, this decentralized information creates additional work—especially if an auditor asks for more information, which they often do.
All of this sounds like a recipe for major headaches.
The good news? It doesn’t have to be this way! In fact, the entire process can be simplified and automated.
How Does Debt Management Software Help with Consistent Financial Reporting?
Debt management software empowers treasury teams, providing them with confidence in their data and enabling them to perform their specific functions with a more strategic lens.
Let's dive into the 5 reasons proactive reporting can enhance your ACFR process and provide consistent financial reporting.
1. Reduced Potential for Human Error
Performing complex manual financial calculations such as premium/discount amortization, as well as updating spreadsheets by hand, raises the risk of transposing numerals and decreases trust in the accuracy of your reports.
When you automate these tasks, you can turn every data set into one you can trust, which means team members can confidently make meaningful decisions and stakeholders can be confident in their data.
2. Boosted Collaboration
When debt managers must share different versions of spreadsheets with their internal team, financial advisors, and auditors, they run the risk of sharing the wrong version.
With the right debt management software, you’ll see a collaboration boost between departments because they are all working from a single source of truth.
This means issuers can give their internal teams and outside professionals access to their debt profile, where everyone can see the most up-to-date information from debt schedules to continuing disclosure obligations.
3. Minimized Risk
Debt payments are too important to be left up to chance.
Debt management software helps minimize risk by sending automated email reminders before payment is due and on the due date.
With an accurate view of key milestones for the next quarter and beyond, you don’t have to worry about important deadlines slipping by and you can see that past payments have been made as scheduled and by whom.
4. Decreased Manual Labor
Gone are the days of wasting time trying to manually update spreadsheets, fix formula errors, and locate and access correct information.
The right debt management solution streamlines data collection and generates reports in seconds rather than days or weeks.
This gives time back to your team, so they can do more strategic work such as long-term financial planning, refunding analysis, or evaluation and creation of short-term vehicles.
5. Improved Tracking
Debt management software enables more control over your data.
It also provides more detailed reporting with the ability to slice and dice data to meet your organization's needs.
For example, teams can control how they want reports to display and view historical data such as:
- Refunding lineage
- Annual roll-forward tables
- How much debt is outstanding
- Project allocations - how much debt is allocated to water, recreation, roads, athletics, etc.
Improved data management and tracking speed up reporting and allows cities and counties like Memphis, TN, and McHenry County, IL to compile critical ACFR details like debt schedules and audit notes in just a few minutes, rather than the weeks it took them before leveraging debt management software.
Features to Look for in a Debt Management Software Solution
The market is flooded with vendors touting their debt management capabilities, but their solutions are often outdated and clunky.
These one-size-fits-all solutions may not address the specific use cases required by public sector organizations.
Let’s take a look at how you can be sure a solution is a good fit for your company.
Ease of Use
Numerous spreadsheets managed by one person who knows the method behind the madness isn’t efficient.
Software that’s difficult to learn and implement won’t necessarily improve the situation. Especially if the software provides only one license and charges excessively for additional users.
Your debt management software should be simple for users to learn quickly, including clear navigation with easy and efficient implementation.
Look for a solution that can automate tasks and provide in-depth analysis and record-keeping while maintaining ease of use.
Historical Record
Don’t waste time wondering why a data point is a certain way or spend hours crawling backward in the spreadsheet formula to figure it out.
Make sure your solution has a robust historical record with the capability to customize views according to project, type, fund, purpose, and other dimensions, based on your reporting needs.
Scalability
Choose a solution that grows and adapts to your organization as your debt obligations change or you add new issuances.
Look for software that also stays up-to-date with ongoing disclosure requirements and helps you build a true historical record by storing not only your outstanding debt but also any refunded debt, and builds a lineage between the two.
Additionally, your debt management software should also allow you to track both public issuances and privately placed debt while being a place where you can store all related documents and see an audit trail of each activity.
Make sure this software works with your needs for the long haul, not one that you’ll outgrow.
Accessibility
Look for a cloud-based solution that maintains security while offering users the freedom and flexibility to access your organization’s debt information from any browser, device, and location.
This is convenient for hybrid or remote treasury teams and enables easy collaboration between internal teams and outside professionals, such as your bond counsel or municipal advisor.
Use Debt Management Software for Consistent Financial Reporting
It’s time to overcome the challenges presented by traditional debt management practices to gain better consistent financial reporting.
Treasury teams use DebtBook to create a durable and usable system of record to track all current and historical debt obligations, including all changes over time (reallocation, defeasance, refinancing, etc.).
Effective debt management is crucial for treasury organizations, where debt service payments are a significant annual expenditure.
With many organizations relying on outdated systems like spreadsheets and on-premises software, the potential for inefficiencies and errors is high.
Dive into our in-depth guide to discover how to streamline your debt management operations, eliminate common inefficiencies, and empower your treasury team to allocate more time to strategic initiatives.
