Processing documents such as vendor invoices and employee timesheets involves frequent approvals. It can be inefficient to pass around paper for these purposes, so electronic options are attractive to many. Some local governments moved to electronic approvals already, using features in their financial software systems, while the pandemic and teleworking has others exploring options now.
We know that moving to paperless processes has been a goal for some local governments. If you were on the fence, the pandemic might be prompting you to explore your options now. Here is some information we frequently share when asked about going paperless.
Where to find guidance
Many of you are attempting to anticipate the length or depth of the financial impacts of the pandemic. This will be difficult to predict, which makes financial planning challenging. One important tool available to help you in these circumstances is scenario planning.
Scenario planning is the purposeful act of preparing forecasts based on different underlying assumptions. It might include a worst case, a best case, and maybe two more possibilities in between.
Why you should use scenario planning
The Center for Government Innovation, a service to local governments provided by the Washington State Auditor's Office, has been working hard to bring some new resources to local governments, including cities. We'd like to tell you about a few new items, plus what's on the near horizon to be published!
Just released: Cash Receipting Guide
COVID-19 has challenged many governments to consider remote work strategies and how their work processes would need to change. Process improvement specialists have started gathering – virtually – to share their experiences and lessons learned during the pandemic. We are calling these sessions “Virtual Lean Coffee.”
From stickies to screens
It is critical to forecast your cash inflows, outflows, and balances into the near-term future to anticipate liquidity shortfalls and remain solvent. Annual budgets tell you your spending authority for a year, whereas a cash forecast will tell you whether you have sufficient cash in the future on a month to month (or even daily) basis.
Why do it?
Cash forecasts:
We've encouraged local governments to step up their documentation practices, and for good reasons. Sometimes documentation is required by law or by the Budgeting, Accounting, and Reporting System (BARS) manuals. In other situations, documentation is a best practice for conducting government business and can help you in so many ways. Preparing your documentation at the time the event or transaction occurs ensures you capture the most accurate and complete information – both for you and for auditors who often review decisions and actions that happened in the past.
As your employees continue to telework, they might be handling, transferring and storing confidential data at home differently than they did at their usual work location. Ideally, you would have a policy in place and trained employees in this area. If you have taken those steps, that is a great start! However, given this period of change and transition, you'll still want to check in with staff to ensure confidential data is safeguarded.
During this pandemic, many governments are feeling the pressure on their general fund and looking at cost cutting and other measures. Acting early can be very beneficial. We noticed some local governments during the Great Recession (2007-09) that seemed to fare better because they did just that. Another strategy we observed was the use of teams to flush out financial options and strategies, to take advantage of some creative but legally allowable solutions. Even if you have a small staff, you can potentially reach out to peers to work on this together.
At least initially, the general fund typically bears all general operating costs, such as for information technology, human resources, accounting, and facilities maintenance. But some local governments develop a plan to share these overhead costs with other funds that jointly benefit from the services provided. A cost allocation plan is optional and requires some work to set up and carry out, but it can take some pressure off of the general fund. This blog post will share some helpful tips and resources should you decide to go that route.