Outsourced Accounting Gives Municipalities Flexibility and a Technology Edge

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‘Right size’ Your Finance Staff

By Danielle Hollingshead, CPA

Like private companies, municipalities and other local government agencies are finding it increasingly difficult to fill finance department positions as long-time employees retire.

Finding candidates qualified to fill such positions as payroll or accounts payable clerks is a challenge. Candidates often don’t have experience with the rapidly changing technology that finance departments use today, and those that do have the right skills expect higher salaries than small government agencies usually pay.

When the payroll clerk who has made sure the government’s employees got their checks on time for 40 years decides to retire, these issues come to a head for the accounting and finance department.

 

Outsourced accounting services

Municipalities and other local government agencies are starting to take a page from private industry and are turning to a new solution to fill finance department roles.

Outsourced accounting services enable government agencies to “right size” their finance staff by paying for the precise skills and functions that they need, when they need them. By hiring the services of an outsourced accounting team, an agency can avoid the inconvenience of staff turnover and the cost of fringe benefits for a variety of finance positions.

Outsourced accounting services provide a deeper bench for smaller municipalities and public agencies, with more professionals at various skill levels whose expertise can be tapped as needed. This adds a layer of internal control that augments the controls that a finance department’s internal employees provide.

Government agencies that are subject to external audit requirements benefit from the experience that outsourced providers have, since the outsourced finance staff know how to prepare for an audit and understand the advanced reporting and documentation that is required.

Moreover, special projects and in-depth financial reporting such as utility rate valuations or bond ratio review can be performed by outsourced providers when internal finance staff don’t have the time.

Kansas municipalities and government agencies are just starting to turn to outsourced accounting solutions. Outsourced accounting is a particularly good fit for medium-sized municipalities and agencies with revenue in the range of $500,000 to $20 million.

Technology advantage

Outsourced accounting services can provide a technology advantage to municipalities and small government agencies, which usually have budget constraints that prevent frequent upgrades.

An outsourced provider will work with whatever technology system you have but may be able to add benefits such as cloud-based applications and mobile capabilities. If a city council member can approve an invoice through a mobile phone app without having to go into city hall, it can help streamline payments and processes with no technology investment by the city.

Getting started

Once a government agency decides to consider the outsourced accounting solution, our team meets with their key finance employees to establish what they are doing currently and what their needs are. A proposal is prepared with recommendations for measures we think can be implemented to streamline inefficiencies, meet reporting deadlines, and achieve a smooth transition.

With the increasing pace of retirements among Baby Boomers in local government staff positions, outsourced accounting – which is being widely adopted by private industry – may provide a solution for municipal agencies, as well.

If you are interested in learning more about how outsourced accounting services may benefit your municipality or government agency, contact Adams Brown.