Just about every industry is going through some level of technology-driven change, and organizations in local government, higher education, and healthcare are no exception. For finance teams working tirelessly to operate more efficiently, collaborate more effectively, and make more informed decisions, it’s becoming increasingly necessary to embrace technology and find better tools tailored to meet their specific teams’ needs.
Let’s start with debt management – what is it? Debt management encompasses everything an organization must do to maintain, build, and protect one of its most precious resources: its ability to borrow money to fund future capital needs. Steps involved may include making payments on existing debt; budgeting and cash flow forecasting; complying with continuing disclosure and reporting obligations; generating accurate reports, journal entries, and year-end financial statements; and tracking future debt service obligations across multiple funds, functions, and projects. Each step is critical to ensuring the organization is managing its capital effectively and sustainably. To do all this well, organizations need a centralized, secure, and up-to-date data source that can be accessed by internal team members and outside partners and advisors.
Defining “debt management software”, then, becomes rather simple: it is technology that empowers all of those who touch some aspect of an organization’s debt portfolio to perform their specific function with significantly greater ease and confidence, allowing them to save time, reduce errors, and make smart, informed decisions.
As opposed to the typical tools finance teams have historically used to manage their debt, such as spreadsheets, debt management software is tailored to meet a finance team’s specific needs, pain points, and challenges. With the efficiency and insights generated by a tailored debt management software solution, finance teams can expedite financial reporting and access better data to improve their budgets, board decisions, rate and fee setting processes, and financial planning for future projects.
In short, debt management software is powerful, both in its ability to streamline existing workflows and to create new opportunities to drive organizational impact.
Debt management software provides efficiency gains to organizations around one of the largest budget line items in the budget: principal and interest on outstanding debt, which generally account for 5-10% of total expenditures. With these efficiencies, team members can focus on activities that may reduce these costs, likely producing returns far in excess of the cost of software. For example, if a team had more time to identify, evaluate, and implement creative ways to shorten the repayment term of a 20-year, $10 million financing by just two years, it could generate more than $600,000 in cash flow savings – a massive budgetary boost for organizations being asked to do more with less each and every year.
Apart from the potential cost savings, we’ve highlighted other benefits that debt management software may provide for finance teams and the professionals who serve them.
Public sector organizations face unprecedented changes and challenges as they struggle to maintain tactical and strategic effectiveness. As Deloitte found in its study on the potential power of innovation in the public sector, “Disruptive innovation offers a potentially powerful tool [for organizations to drive efficiencies]: a way to reduce costs by upwards of 50-75 percent in some instances while maintaining or improving services.” If one or more of the following indicators rings true, you should consider acquiring debt management software.
A “fintech stack” refers to the group of solutions used together to operate finances more smoothly. Debt management software is one piece of the technology that keeps finance teams on task and on time: payroll software, enterprise resource planning (ERP) software, tax management systems, budget software and accounting programs all fit into this stack.
Implementing the proper technology can eliminate tedious, time-consuming, manual tasks in order to free up personnel to focus on more high-value work. Technology can also help to attract new talent, as many younger professionals want the ability to leverage the latest tech in their work.
Look for the following types of features when evaluating debt management software:
In a post-pandemic, digital-first reality, it is perhaps more important than ever to have up-to-date technology when it comes to finance. Investing in the proper tools will mean a smoother overall experience, and debt management software has become an essential part of any organization’s fintech toolbox.
DebtBook is powerful, easy-to-use, cloud-based debt and lease management software for finance teams in local government, higher education, and healthcare. Our software helps these teams effectively manage their debt and leases in the cloud, driving efficiency, collaboration, transparency, and informed decision-making within their organizations.
As the new standard in debt management and the only consolidated solution for debt and lease management, DebtBook is trusted by finance professionals nationwide. Ready to go ahead and take the next step? Schedule a demo with us today to learn more and see the solution in action!