Public Financial Management (PFM) encompasses the legislative and regulatory structure, information technology systems, and operational procedures employed by governments for revenue generation, public expenditure management, financial accountability, and result auditing.
Why is Effective Public Financial Management Important?
Effective PFM serves as the backbone of a well-functioning government, directly impacting its ability to meet the needs of its citizens. Robust PFM:
- ensures that resources are allocated in line with government priorities
- supports sustainable growth
- builds public trust and reduces corruption
- makes a country more attractive to investors and builds international reputation
- helps to improve citizen wellbeing
- mitigates global risk
- improves a country’s resilience
- contributes to achieving the UN Sustainable Development Goals.
In short, strong PFM underpins good governance, benefiting both the government and its citizens.
FreeBalance PFM Tools are Designed for Governments
Governments that harness the power of digital technologies for PFM enjoy enhanced efficiency, transparency, and accountability. FreeBalance’s (PFM) Public Financials Management software enables governments to realize these benefits wherever they are on their digital evolution.
FreeBalance’s (PFM) Public Financial Management solution supports core government fiscal functions including:
- accounting and reporting
- national and international public sector standards
- commitment accounting
- budget execution, budget and commitment controls
- assets and inventory
- cost and project accounting.
(PFM) Public Financial Management is specifically designed to support unique government needs, and is one of key components in FreeBalance’s PFM Component Map. It can be implemented as a standalone product, or as part of a wider implementation of the FreeBalance Accountability SuiteTM. And it supports governments whether they are at the digitization, digitalization or digital transformation stages of their digital journey.
We have discussed the importance of digital fiscal management approaches for governments in our recent blog post, What are the Benefits of Digital PFM?, but there are specific benefits of using FreeBalance’s (PFM) Public Financials Management as a digital PFM tool.
Moving PFM From Paper to Digital
Governments who are using manual or paper-based processes can improve information security, reduce administrative burden and improve access to data by digitizing their records. (PFM) Public Financials Management can be used to digitize key information and processes, including:
- completing period and year-end procedures
- producing financial reports meeting international standards
- supporting accounting adjustments, journal vouchers, and budget transfers
- implementing commitment controls.
Augmenting PFM with Automation
Further benefits come through increasing automation and digitalizing financial processes, records and information. FreeBalance (PFM) Public Financials Management facilitates:
- integrated authorized budgets with commitment controls and budget transfers
- automated general ledger and subledger accounting
- easy management of end-to-end assets, fleet, inventory, or facilities data
- integrated fiscal transactions and fiscal data.
This can result in cost savings and increased capacity for other critical tasks.
Transformative Technology for PFM Reform
Digital transformation offers the highest impact in public financial management. It puts technology at the heart of operations, and redesigns processes to improve efficiency, reduce human resource requirements and improve value. When implementing digital transformation programs, FreeBalance (PFM) Public Financials Management tools ensure maximum efficiency and drive enhanced decision-making by:
- integrating commitment controls on all spending functions, especially procurement, social programs, and payroll
- supporting early warning and alerts for potential surpluses and deficits
- enabling systems of record integration with systems of engagement, intelligence, and innovation
- supporting easy and agile integration with big data analytics, social media, mobile systems, blockchain, artificial intelligence, the Internet of Things, artificial reality, and virtual reality.
To learn how FreeBalance can help transform your public financial management, get in touch.