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INDUSTRY INSIGHT

How automation can help local governments thrive in the post-COVID world

The coronavirus outbreak has generated unprecedented disruption for state and local economies. But local government revenue is among the areas hit hardest.  

Across the country, tax revenues are plummeting while spending is increasing, and city governments are struggling to do more with less. A survey conducted by the Washington Post found that 2,100 U.S. cities are facing severe budget shortfalls because of COVID-19 and its consequences. And these cash-strapped cities are desperate for new ways to balance their budget. Already, 1,100 of them plan to cut public services, while 600 expect to lay off employees.

But cities don’t need to take such extreme measures. In fact, there’s a different way forward for cities looking to generate new revenue and keep employees on staff, while simultaneously enhancing the quality of their services and streamlining their operations. That way forward is automating revenue management.

Automated revenue management works by digitizing paperwork and freeing employees from performing time-consuming manual labor like data entry, billing, application and certificate processing, funds distribution, compliance and taxpayer support services. What’s more, automation is good for constituents too. Automated revenue management enhances the tax-paying experience, ensuring smooth and easy interactions between tech-savvy younger taxpayers and government agencies.

For governments looking to enhance their revenue, automation can have a transformative impact on revenue streams and work quality. That’s because workflow automation can eliminate the operational inefficiencies that hurt revenue and waste time. Approximately 55% of managers lose eight hours or more per week performing manual administrative tasks. Through automation, governments can rescue that lost revenue and empower their employees to shift their attention away from administrative busy-work and focus on the high-value tasks that define good government.

At the same time, automation can revamp revenue collection and management processes, making them faster, more efficient and less costly. Automating tax revenue collection and remittance on a cloud-based system, for example, cuts every cost associated with paper filing, on top of delivering superior and more reliable revenue management. Additionally, automated systems can provide disbursement modules that handle daily expenditures with ease. Finally, automated systems can offer 24/7 interactive reporting tools that enable real-time data analysis, eliminating major sources of human error and streamlining decision-making.

For governments worried about the costs of automating operations, it’s worth noting that automation often pays for itself through the revenue it generates and the time it saves. The process of automating invoice processing, for example, can pay for itself in under 12 months. That makes automation something of a miracle solution for cities that want to enhance their revenue streams but are unable to make a costly investment upfront. And automation doesn’t take long to get started -- some government systems have been automated in under 90 days.

But cities have historically been slow to adopt digital automation strategies to improve workflow. Too many agencies still rely on paper filing, in spite of how costly and cumbersome it can be. One IDC survey discovered that 58% of constituent-facing processes and 46% of internal processes still rely on manual work and paper forms. But even when and where governments have gone digital, they’ve still lagged behind on implementing fully automated systems. A recent survey by Concur and GovLoop found that only 16% of state and local respondents reported using automated systems to submit invoices.

But the challenges posed today by the COVID-19 outbreak present a massive opportunity for governments to embrace automation. Expectations for government to deliver high-quality services amid significant workplace and revenue disruptions are mounting. At the same time, state and local governments face a high level of scrutiny surrounding the transparency and efficiency of their day-to-day operations and expenditures. All told, it’s a situation that demands an innovative solution that push the boundaries of how governments operate.

Automation provides that innovative solution, one that can simultaneously make regulatory compliance easier, improve cash flow and better equip governments to provide reliable and effective services to constituents. Ultimately, automation provides one of the safest ways for governments to increase revenue without raising taxes. And governments can leverage third-party partnerships to start building for automation without disrupting their day-to-day operations.

In both the public and private sectors, automation will define the future of work. Now is the time for governments to embrace this trend in workplace innovation.

About the Author

Christy Cato is the vice president of tax administration at Avenu. 

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