Today’s accounting and finance professionals are tasked with much more than just crunching numbers and preparing spreadsheets. They are the backbone of many organizations and responsible for ensuring that business goals are met and projects are funded and succeed. But these mighty, and often small, teams have a unique set of challenges facing them in2022. Those accounting teams that leverage technology will be better equipped to adapt and evolve and will have the tools to help their organization find strategic ways to overcome these shifts.
Here are the four biggest accounting challenges facing local and state government, higher education, and healthcare organizations across the country today, along with ways technology can help to address and overcome them.
Challenge #1: Mass Retirements Talent Acquisition
Since the fall of 2021, news headlines have been covering ‘The Great Resignation’ and its impacts. The current job market is plagued by long-term senior leaders looking to retire and a shortage of young college graduates who are ready to enter the public accounting workforce.Without a clear and defined succession plan for the scenario of losing key team members or the tools and resources young talent requires, it will be very difficult to staff an efficient and effective team.
How Technology Can Help: Investing in the right technology can help your organization to attract quality candidates, retain high-performing employees, and efficiently document operating procedures. In fact, technology can be critical for the success of your hiring, onboarding, and training processes. Having up-to-date and relevant technology solutions will not only help to recruit new talent but is also important to current employees; a recent Accenture survey tells us that 45% of respondents admitted that their own devices were more effective than the ones provided by their employers. Further, the benefits of building a tech stack go beyond talent attraction and retention; technology can automate tasks, streamline workflows, and improve reporting throughout the organization. This functionality will free up the team’s time to focus on more value-add tasks, leading to greater job satisfaction.
Check out these additional Resources for further reading:
- Blog Article: The Great Resignation: Embracing Technology to Attract and Retain Young Finance Talent
- Blog Article: Leveraging Technology to Prepare for the Future and Support Succession Planning For Finance Teams
Challenge #2: Implementing GASB-87 (and Doing so Before the Deadline!)
GASB-87 officially went into effect June 15, 2021, meaning June 30, 2022 audits will be the first that need to have their leases comply with this new accounting standard. Implementing GASB-87 requires preparation, attention to detail, and an evaluation of current resources and bandwidth. In summary, government, higher education, and public healthcare organizations will be required to:
- Gather their lease agreements(lessee and lessor - copiers, vehicles, real estate, and cell towers, among others)
- Test each agreement to determine whether they’re subject to the new reporting requirements
- Calculate lease beginning balances and schedules
- Update their financial statements and note disclosures with this new information
There are many tasks to consider as organizations prepare for the mandatory change: understanding the structure and requirements of the new accounting standard, evaluating whether to overhaul your current lease reporting structure yourself or leverage a technology solution, and completing the GASB-87 implementation before the 2022 deadline.
How Technology Can Help: Lease management software, such as DebtBook, has been developed specifically with governments and other public entities (and their unique challenges) in mind. These solutions can help organizations operate more efficiently and significantly reduce the burden placed on local teams to comply with new financial reporting standards. Most importantly, they can address all three phases of challenges faced by organizations looking to implement GASB-87:
- Upfront Lease Organization and Data Extraction
- Schedule Creation
- Ongoing Compliance
If implementing GASB-87 sounds overwhelming, you may want to consider a lease management solution. These types of platforms help organizations implement and maintain ongoing compliance with GASB-87 by automating time-consuming processes and eliminating manual data entry. Not to mention, if you put off prioritizing this initiative and find yourself scrambling to comply before the deadline, a lease accounting software may be the only solution to efficiently implement this regulation, as it typically takes 3-6 months to implement GASB-87.
Check out these additional Resources for further reading:
- Checklist: GASB-87 Readiness Assessment
- Blog Article: Building an Action Plan for GASB-87 Compliance
Challenge #3: Remote or Hybrid Business Models as a Result of COVID-19
Local government finance teams increasingly face complex tasks, cumbersome processes, and shifting accounting standards and requirements. Their roles have become even more challenging in the unpredictable world we currently find ourselves, as municipalities take on more debt to accommodate budget shortfalls and attempt to navigate uncertainty while supporting their communities. And in today’s ongoing pandemic, instead of turning to your team member sitting next to you or walking down the hall to your manager’s office, you must track them down virtually and try to manage these projects via phone calls, emails, and video meetings. For organizations that have not already embraced remote or hybrid business models or invested in the tools and resources their teams need to be more successful in this work environment, 2022 should be the year to do so. Organizations must face the reality that remote work is here to stay and find partners, vendors, and technology providers who can help their organization thrive.
How Technology Can Help: There is no shortage of digital applications and platforms that can be leveraged and integrated to create a technology stack with the ability to reduce or eliminate the challenges associated with a remote or hybrid environment. From collaboration and project management tools to powerful data analytic engines, there is a solution and a price point to meet the unique needs of every organization. And with finance teams continually being asked to do more with less, it’s becoming increasingly necessary to find better tools that are tailored to address their specific challenges. If your organization is struggling with scattered data, information silos, and limited accessibility, it might be time to make the switch to a modern FinTech solution. Enter debt and lease management software.
Check out these additional Resources for further reading:
- Blog Article: How to Select a Debt and Lease Management Software Vendor
- Blog Article: How Organizations Can Embrace Technology to DigitallyTransform their Finance Operations
Challenge #4: Data Security
Cybercrime is up 600% due to the COVID-19 pandemic according to a cyber security report by PurpleSec, and on average, only 5% of companies’ electronic document folders are properly protected (Varonis). Organizations that have financial programs and databases installed locally on individual computers and hard drives are exposing their critical financial data to potential cyber attacks.This type of data storage is vulnerable to malware and threats from individuals who want to corrupt, steal, or lock-down your database.
How Technology Can Help: Replace your hard drives with a cloud-based system that gives you 24/7 access to critical debt and lease information in the event of an attack. The data that you save with cloud-based service providers is likely safer than the information you've stored on your computer's hard drive. The security measures undertaken by larger companies providing cloud services are often more robust and powerful than what you have protecting your home computer and devices. Look for a provider who meets SOC compliance to ensure your software provider meets the standards designed to help measure how well a given service organization conducts and regulates its information.
In addition, we all know that spreadsheets are notoriously prone to error. Responsibility for these types of files is in the hands of individual users, and there are likely multiple copies of each file spread across various computers, storage locations, and servers. Spreadsheets are frequently printed out, photocopied, emailed to others, accessed through shared folders, and generally not safeguarded. As lease accounting becomes more central to financial reporting, there must be adequate controls over data security and disaster recovery that spreadsheets cannot not provide.
How Technology Can Help: Software enables password-protected system access that protects sensitive data.Further, databases allow data access by multiple users at a time and offer different levels of secure access depending on user roles and needs. Further, choose a technology solution that provides audit trails and tracking history to see who, when, and what was changed in the system.
Check out these additional Resources for further reading:
Local government, higher education, and healthcare organizations are likely moving into 2022 with fewer staff members than they had in 2021, GASB deadlines demanding their time, and an increased need for data security protocols to be put in place -- not to mention many teams are still operating in a hybrid or remote work environment. While it is good to be aware of the challenges that lie ahead, these issues also offer opportunities to leverage technology and tackle the roadblocks head on. With the right technology solution, 2022 can be your most efficient and productive year yet.
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.
