Key Takeaways:
- State and local government finance departments are facing staffing shortages due to more professionals retiring and fewer new graduates entering the field of accounting.
- Technology can help understaffed teams work more efficiently by streamlining processes and automating tasks, monitoring compliance, and providing data insights.
- Innovative solutions like debt management software can empower finance teams to navigate challenges, optimize operations, and create a path forward despite personnel shortages.
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State and local government finance departments are grappling with a daunting challenge: a shortage of skilled accounting professionals.
Your government finance team may already know the challenges all too well: long hours, mountains of paperwork, and a lack of qualified personnel — making even routine accounting tasks feel like an uphill battle.
The bad news is based on current trends, you can expect staffing shortages and challenges to increase over the next several years. The good news is there’s a solution that can both provide your team relief in the short term and help streamline your operations moving into the future.
The Accounting Staffing Shortage: A Perfect Storm
Recent headlines like "The Accounting Profession Is in Crisis" and "Why No One's Going Into Accounting" may sound dramatic, but they reflect a field experiencing an increasing shortage of professionals resulting from a perfect storm of demographic shifts and changing career preferences.
Accounting is contending with an aging workforce. The CPA Journal reports the average age of a CPA partner in the United States is 52-53 years old. Meanwhile, the nation as a whole is experiencing a retirement wave, with the last of the Baby Boomers — the largest generation in American history — set to reach age 65 by 2030.
Compounding this challenge is an alarming decline in the number of younger accountants entering the profession. The American Institute of Certified Public Accountants (AICPA) reports a 33% decrease in first-time CPA exam candidates between 2016 and 2021 (AICPA 2021 Trends Report), while bachelor's degree completions in accounting dropped by 7.8% from 2021 to 2022 (AICPA 2023 Trends Report).
An exodus of retiring professionals combined with a significant drop-off in new graduates entering the field could equal years of accounting staffing shortages throughout the nation. These shortages will have a greater impact on state and local government entities, which will be challenged to match the salaries offered by the private sector.
The Increasing Demands on Your Team
As if staffing woes were not enough, the accounting profession is also facing increasing complexity. New accounting standards, like Governmental Accounting Standards Board (GASB) 87 for leases and GASB 96 for subscription-based IT arrangements (SBITAs), have made compliance more time-consuming and difficult.
Meanwhile, the Bureau of Labor Statistics projects continued growth in demand for accountants and auditors, driven by factors like the "complex tax and regulatory environment." This mounting pressure threatens to overwhelm your already understaffed team, potentially causing delays in critical tasks like completing timely audits — a requirement in many states and for federal funding.
The Solution: Implementing Technology to Help You Work Smarter
While staffing shortages pose a major challenge, there is a solution that can help ease the burden on your team: technology. By automating repetitive tasks, streamlining complex processes, and ensuring compliance, the right software empowers your team to work smarter and more efficiently — even with limited personnel.
Here are five ways debt management software can be a game-changer for your understaffed government finance department:
- Automate data entry and reporting — Repetitive tasks like data entry and financial reporting are time-consuming yet essential. Debt management software automates these processes, reducing the risk of human error while freeing up your team's time for higher-value activities.
- Provide real-time access to financial data — Cloud-based debt management software gives your team real-time access to up-to-date financial records from anywhere. This centralized data improves collaboration and makes it easier for your team to work together or with external accounting firms, even remotely.
- Simplify compliance — With new accounting standards for leases and SBITAs, ensuring compliance is more complex than ever. With built-in compliance, debt management software protects your organization from penalties and reputational damage — providing you peace of mind and making audits less intimidating.
- Increase efficiency for lease and SBITA management — From generating lease schedules and tracking payments to calculating renewal options, debt management software automates and streamlines the many tasks involved in managing leases and SBITAs — helping you accurately track and manage all relevant information to reduce errors; and saving you valuable time and resources.
- Deliver insightful reports and analytics — Go beyond just tracking data — debt management software generates reports and analytics that provide deep insights into your activity. You can use this business intelligence to make smarter financial decisions and strategies.
By leveraging debt management software, your understaffed team can achieve more with less. Automation frees them from tedious tasks, allowing them to focus on higher-level work that truly moves the needle.
Embracing Innovation to Create a New Path Forward
The accounting profession's "perfect storm" of staffing shortages and increasing complexity shows no signs of letting up anytime soon. For state and local government finance departments already struggling with lack of personnel, the road ahead may seem daunting. But you don’t have to go it alone.
By embracing innovative technology solutions, you can empower your team to overcome today's challenges while future-proofing your operations for tomorrow's changes. Invest in the tools that will enable your team to work smarter, not harder.
One option to consider is DebtBook, a leading lease and debt management software for state and local governments. In partnership with DebtBook, MGO can assist you with implementing the system, entering your data, and educating your team on usage and maintenance*. Reach out to us today to learn more about how DebtBook can work for you.
*Services for audit clients are limited to those that do not impair independence, such as providing advice and validation services to ensure the integrity of the financial information that comes out of the system.