Finance and accounting teams in local government, higher education, and healthcare know the importance of vigilant and meticulous debt management practices, as they directly affect one of their most valuable resources: their ability to borrow money to fund future capital needs. Practicing good debt management can also impact your credit rating (making it easier to attain future bonds), reduce stress during audit season, and instill trust and confidence in the communities you serve.
But managing an organization’s debt is not so simple. 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. Add on the fact that many of these tasks need to be completed monthly or quarterly, involve multiple contributors, and relate to data that often exists across multiple spreadsheets, paper files, or even sticky notes, and you’ve got yourself a recipe for a major headache.
While many organizations have tried and true methods of managing their debt, these are typically very manual and time-consuming. 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.
Enter debt management software, which is designed specifically for the unique needs of local government, higher education, and healthcare finance teams. In order to accurately and efficiently manage the complex steps of debt management, organizations need a centralized, secure, and up-to-date data source that can be accessed by internal team members and outside partners and advisors. Debt management software 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.
Now that you know what debt management software is, keep reading to learn 10 ways debt management software can reduce the challenges of managing debt obligations.
Replace Inaccurate Spreadsheets and Have Data Confidence
Debt management software can give you confidence in your data, knowing the information is accurate and tied out to the penny. Are you working off spreadsheets that may be inaccurate with no way to tell whether it’s a broken formula, a mistyped data entry, or outdated version of the file without completing hours of meticulous scanning to find the error? Utilizing a powerful technology solution to calculate complex reports such as amortization schedules, forecasting models, and payment tracking enables your team to trust that the data is accurate and without human error.
Reduce the Time Spent Updating Data Manually
Debt management software can automate manual, repetitive tasks and give you more time to focus on value-add activities. Do you have a drained and tired finance team who look at debt management as a chore because they are spending hours updating spreadsheets and creating reports every month? A debt management software can generate financial notes, journal entries, debt service schedules, and more in a matter of seconds, so you can focus on maintaining attention to detail on the reports rather than the painstaking task of generating them.
Decrease Stress During Audit Season
Debt management software creates a solid foundation of organization, accessibility, and compliance heading into audit season. Does your finance and accounting team dread audits every single year because files are in disarray and without a clear path as to how you arrived at certain assumptions and financial balances? With original documents, general ledger balances, and schedules stored electronically in a centralized hub, your auditors can have automatic access to your network, data, source documentation, and disclosure notes, lifting that burden off your shoulders.
Minimize Risk with Key Action Items
Debt management software can minimize risk and help you stop leaving debt payments up to chance with automated email reminders ahead of and on payment due dates. Do you have pop ups in your calendar to remind you of key dates for call dates, arbitrage reports, and continuing disclosure and sticky notes of upcoming payments due? With an accurate, calendar view of key milestones for the next 12 months and beyond, you won’t have to be worried about an important deadline slipping by.
Work From a Master Data Warehouse
Debt management software can give your finance team a master data warehouse to store all debt obligations and supporting documentation. Do you have a disorganized hard drive with multiple people working off duplicate versions of the same spreadsheet and changing datasets and reports with little to no tracking as to what, when, or who made the updates? Debt management software can provide you with a single source of truth where all debt and source documentation can be stored. Data and reports will be updated in-real time as changes are made so that the entire team will be on the same page and fully aligned.
Stop Requesting Access to Spreadsheets
With debt management software, gone are the days of limited access and asking for spreadsheet permissions for a handful of users. With a solution that can grant an unlimited number of internal team members access to your database, you can collaborate across departments and empower users to get the information they need. Your team can even provide external parties with free, but controlled, access that can be turned on/off easily, enabling auditors, advisors, and accountants to easily access records.
Access Your Data Easier
Cloud-based debt management software enables your finance team to upload and easily access pertinent records at any time from anywhere. Do you store debt records in paper binders and scattered spreadsheets that can only be accessed when you're in the office or have remote team members who can’t access the data they need in a timely manner? With a cloud solution, important decisions about your debt obligations and budgeting don’t have to wait until you’re back in the office.
Increase Transparency into Your Organization’s Debt
With debt management software, you can provide your constituents with concise and comprehendible updates to your outstanding debt. Do you have long, text-rich reports that external users and residents find hard to navigate and understand and limited resources to create powerful and engaging data visualizations? Debt management software allows you to update your stakeholders on new and existing debt and how it will serve them through easy to comprehend data visualization, charts, and reports.
Secure and Protect Your Data
Debt management software can protect critical financial data from cyber or malware attacks. Does your organization have a debt management system installed locally on individual computers and hard drives that makes data vulnerable to cyber attacks? Instead replace it with a cloud-based system that gives you 24/7 access to critical debt and lease information in the event of an attack. Relax with peace of mind knowing your important and sensitive data is secure and protected.
Plan and Prepare for Future Retirements
Debt management software can help you prepare for the future and support succession planning to minimize the stress and headaches caused by employee turnover, leave, or retirement. Does your team have a single or few individuals who know the nuances of your spreadsheets and reporting practices or multiple people creating and editing financial records without following a consistent process? Debt management software provides a standardized reporting process that is followed regardless of the individual updating it and is easy for a new team member to follow and understand.
How DebtBook Can Help
As opposed to the typical tools finance teams have historically used to manage their debt, such as spreadsheets, DebtBook is tailored to meet a finance team’s specific needs, pain points, and challenges. With DebtBook 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. To learn more about how DebtBook can help your team overcome the challenges highlighted in this article, and more, please contact us to set up a personalized demonstration.