As public finance teams increasingly turn towards digital solutions to help support and improve their operations, organizations can find themselves hosting dozens of various IT subscriptions for essential tools and services across departments. This has led to a decentralized landscape, where governments and non-profits often are unaware of which IT subscriptions are being utilized, the terms of the agreements, the amount and the frequency of payments due. Managing IT subscriptions is crucial for government finance teams to track software costs, maintain a system of record, and increase visibility into their cash flow for financial decisions. Teams must now treat digital subscriptions with the same strategic importance as physical assets.
Why Public Finance Teams are Turning to Subscription Management Software
With the introduction of GASB 96, the Governmental Accounting Standards Board's standard for Subscription-Based Information Technology Arrangements (SBITAs), accounting teams are now required to report their organization’s SBITAs on the face of their annual financial statements. This shift means more work to be done for finance teams to establish and maintain compliance.
Subscription management software enables public finance teams to maintain GASB 96 compliance and offers visibility into software costs across the organization. This type of software streamlines the collection and monitoring of IT subscription agreements by simplifying the extraction and organization of required data from subscription documents. In the modern financial landscape, embracing subscription management technology allows finance teams to enhance their operational efficiency, foster improved collaboration, and produce more accurate and reliable reporting.
Organizations can no longer delay the adoption of solutions that provide a centralized repository for IT subscriptions and GASB 96 SBITAs, streamline digital data management, and automate financial reporting. This industry shift is shining a spotlight on the need for reliable subscription management tools.
In addition to enabling GASB 96 compliance, below are 6 helpful features and functions you may not have known subscription management software offers.
#1: View Contracts by Fund, Purpose, and Custom Frequencies
Efficiency is crucial when reviewing contracts and extracting key details from them. Manual data management processes, such as creating custom pivot tables in Excel, can be time-consuming, and relying on these manual entries heightens the risk of inaccurate data.
DebtBook makes it simple to switch between different views of your entire subscription portfolio for easy-to-produce reports. Seamlessly track, manipulate, and analyze your agreements across multiple categories, filters, and allocations with the “View By Type, Fund, Purpose” for both qualifying GASB 96 SBITAs, and other software subscriptions in your profile.
Practical Use: Consider a regularly occurring meeting during which you report on all projects relating to your Water and Sewer Department and funding. With DebtBook, simply sort your profile by your Water/Sewer fund, view all subscriptions or project costs related to that fund, select the right dates, download the export, and go to your meeting with confidence in having an accurate report.
#2: Manage Project Costs for Subscriptions
Many software subscriptions include costs outside of the normally recurring payments. These costs, known as project costs, can include initial discovery costs, implementation fees, and ongoing maintenance costs. With the new GASB 96 standard, it is important to track project costs as they can directly affect the reporting and associated subscription asset balances.
DebtBook’s project management feature allows your team to easily track project costs throughout the complete subscription lifecycle, from discovery to termination. Once assigned to a subscription, all of the journal entries associated with your project costs will be included in your journal entry exports. With comprehensive tracking and an audit trail, your team will be confident that all of your project costs are being correctly accounted for.
Practical Use: Imagine your team is in the midst of completing an implementation for a new ERP software. Throughout the implementation, you have been making ad-hoc payments to the software vendor as implementation milestones have been completed. As audit season approaches, you need to compile these costs and report them on your balance sheet. Using DebtBook you can easily create these entries and have all of your project costs organized in one place. Instead of trying to track down invoices and remember which payment was for which task, you can spend your time focusing on other important areas of your audit.
#3: Prepare Accurate Journal Entries
If cash flow is the lifeblood of any accounting and finance organization, then journal entries are the heartbeat. The precision, legitimacy, and promptness of these records are critical. Although the management of journal entries in spreadsheets is widespread, it's well-known that spreadsheets are susceptible to errors, and relying on manual data management can lead to burnout, even for seasoned financial professionals.
DebtBook's powerful yet user-friendly custom General Ledger builder allows teams to generate precise, automated GASB 96 journal entries. Regardless of the complexity of your account structure or subscription amortization schedule, you can effortlessly export your journal entries directly to Excel in a well-structured and easily understandable format.
Practical Use: Imagine you are running behind on this month’s financial analysis and your manager asks you to deliver all journal entries for your entire subscription portfolio by the end of the day. With DebtBook, you can quickly sort your subscription portfolio by your preferred reporting date and download all corresponding journal entries for the necessary SBITAs within seconds. Or better yet – invite your manager to create their own DebtBook account so they can view and download this information whenever they’d like!
#4: Automate Audit Season
Teams operating in local and state governments, higher education, and healthcare often experience a sense of audit apprehension and stress as the financial year comes to a close. The rush to meet deadlines, locate source documentation, and validate stated assumptions can be overwhelming.
DebtBook provides modern tools and resources to help automate your audit season, enable GASB 96 compliance, and reduce the stress often associated with the process. DebtBook helps you stay organized by providing a centralized repository for all your schedules and contracts for debt obligations, leases, and SBITAs, enabling access to up-to-date payment projections, and surfacing the underlying documentation requested by auditors. With quick and easy access to these resources and reports, preparing for and successfully completing audit season has never been easier.
Practical Use: As audit season approaches, utilize DebtBook to anticipate and prepare for the requests your auditor will have. With DebtBook you can export footnotes and amortization schedules, locate and tag all source documentation related to the subscriptions being audited, and showcase how your organization is complying with current and changing GASB accounting standards by keeping a system of record for which contracts did or didn’t qualify as a GASB 96 SBITA, and why.
#5: Achieve and Maintain GASB 96 Compliance
GASB 96 has fundamentally changed the way public finance teams must evaluate and account for subscriptions. It establishes criteria for recognizing and reporting SBITAs in financial statements, ensuring consistent and accurate accounting practices across different government entities. It defines what qualifies as an SBITA and provides rules for recognizing and measuring these arrangements.
Complying with this new standard is no small undertaking. Software use is only increasing across public and private entities, and as your organization adds additional SBITAs, your finance and accounting team will be required to account for the associated costs and agreements. You might have finished the initial GASB 96 implementation, but that doesn’t mean the work is over.
IT software encompasses a wide variety of products and services— software as a service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). When someone at your organization notifies your department of a new IT contract or an amendment to an existing contract, you’ll need to determine if the SBITA falls under GASB 96 or not. This determination, along with determining materiality can be done with DebtBook.
By relying on subscription management software that specializes in complying with GASB 96, organizations can drastically reduce the time, stress, and resources allocated to accomplish ongoing compliance for years to come. DebtBook focuses on the three key areas required for management GASB compliance:
- Upfront subscription organization and data extraction
- Crucial accounting details: schedule creation, project expense tracking, journal entries, audit notes, and incremental borrowing rate calculations
- Easy ongoing compliance and maintenance
Practical Use: By following a proven subscription management process, your organization can digitize your entire subscription repository; generate the amortization schedules, GASB 96 journal entries, and disclosures required; and showcase ongoing compliance methods – throughout the year so your next audit is a breeze.
#6: Grant Access to your Auditors, Accountants, Attorneys, and Other External Stakeholders
In a time-sensitive environment like audit season where you and your team have a million things to do, the least desirable task is sifting through stacks of paper contracts or searching for PDF documents scattered across multiple hard drives and email inboxes. This challenge becomes even more pronounced in cross-functional contract management scenarios, where responsibilities are distributed among different internal departments and external team members, including accountants, advisors, lawyers, consultants, and bankers.
With DebtBook, you have anywhere, anytime access to your subscription data and can invite unlimited internal and external users to your workspace for free. DebtBook serves as a single source of truth -- where all subscription agreements and source documentation can be stored.
Practical Use: Invite any guests who review contracts, verify data, check source documentation, or provide financial analysis and recommendations. When audit season is over, choose to maintain their access, reduce their permission levels, or suspend their account – the power is in your hands.
How DebtBook is Here to Help
Beyond compliance enablement, Subscription Management Software can help your team create operating efficiencies, improve transparency, and manage IT contracts in a secure and centralized cloud-based platform. See what DebtBook can do for your organization with a personalized, 30-minute demo today.
Disclaimer: DebtBook does not provide professional services or advice. DebtBook has prepared these materials for general informational and educational purposes, which means we have not tailored the information to your specific circumstances. Please consult your professional advisors before taking action based on any information in these materials. Any use of this information is solely at your own risk.
