Common Types of Software Subscriptions in Government
Here are some of the most widely used types of software subscriptions in the government sector:
1. Enterprise Resource Planning (ERP) Systems
Used for budgeting, payroll, HR, and general ledger functions. Examples: Oracle, Tyler Technologies, Workday.
2. Financial Management and Accounting Software
Handles core accounting tasks, grant tracking, debt management, and reporting. Examples: Munis, DebtBook, Blackbaud.
3. Human Capital Management (HCM) Tools
Supports onboarding, benefits, time tracking, and performance management. Examples: ADP, Paycom, UKG.
4. Permitting and Licensing Platforms
Used by planning and zoning departments to manage permits, inspections, and compliance. Examples: Cityworks, Accela.
5. Document and Records Management Systems
Helps manage digital archives, FOIA requests, and document workflows. Examples: Laserfiche, OnBase.
6. Public Engagement or Communication Tools
Used for agenda management, meeting livestreams, or public surveys. Examples: Granicus, CivicPlus.
What is the Difference Between Seat Based and Usage-based Pricing?
Seat-Based Pricing
- Charges are based on the number of authorized users (or "seats").
- Common in ERP, financial systems, and HR platforms.
- Offers predictable billing but may include unused seats if overestimated.
Usage-Based Pricing
- Charges are based on system usage, such as number of transactions, storage used, or API calls.
- More flexible, but can lead to variable monthly costs.
- Often used in public engagement tools or cloud platforms with scalable services/
Understanding the pricing model is important for both contract evaluation and GASB 96 compliance. Seat based models often result in fixed costs, while usage-based arrangements may not qualify as SBITAs unless there is a minimum commitment or fixed component.
What is the Difference Between Usage Fee and Subscription Revenue?
While both terms relate to software services, they represent different sides of the transaction:
Usage Fee
- The cost the government pays to the software provider based on actual use.
- Appears as an expense in the government’s financial records.
- May be variable, fixed, or part of a hybrid subscription model.
Subscription Revenue
- The revenue earned by the software provider from customers using its services.
- Reflected on the vendor’s income statement.
- Not typically relevant to public sector accounting unless the entity is offering its own software-as-a-service model.
Usage fees are what your organization pays, while subscription revenue is what the software vendor earns.
What's Important Here
Governments use a wide range of software subscriptions to support daily operations, from accounting to community engagement. These subscriptions are commonly structured with either seat-based or usage-based pricing and knowing the difference is important for budgeting and compliance.
Organizations should pay close attention to how fees are structured to determine whether a contract qualifies as a SBITA under GASB 96, and to ensure clear, accurate financial reporting.