Sausalito’s Revenue Report is a Time Saver

July 10, 2018 – Charlie Francis

A report generated by the City of Sausalito highlighting annual revenue and expenses for parking fees is definitely one report that will save you time in OpenGov.

Tracking financial performance over multiple years helps finance directors to steer their city in the right direction. In particular, monitoring the revenues and expenditures helps to ensure that the city remains financially viable and capable of meeting its service level objectives. Otherwise, a city may run out of cash, default on debt or become unstable.

Trend Analysis
One of the biggest advantages of comparing balance sheets and annual operating reports over time is discovering trends and analyzing the findings. For instance, if key taxes are down year-over-year, leaders are able to identify the trend and develop explanations for the negative change, and to plan accordingly. The same goes for major expenditure accounts. Comparing three or more years' statements enhances the trend analysis and helps management forecast future operating activity.

Performance Evaluation
Balance sheets and annual revenue vs expenditure reports allow managers to gauge performance on an organizational and departmental level. By evaluating the percentage increase or decrease of expenses and revenues, city financial managers can measure operating performance and adjust their strategies. If there are certain types of expenses reducing operating income, management can analyze individual departments to identify the root cause. Comparing multiple years’ statements allows all stakeholders to determine if performance is improving or getting worse.

Accounting Discrepancies
Comparing multiple years’ of balance sheets and income statements also helps to identify errors, omissions or misreporting in financial statements. Line items may vary drastically year-over-year, a red flag that discrepancies are present. Also, comparing ratios and percentages helps to identify inconsistencies not related to actual operating activity. Fluctuations in account balances are to be expected, but extreme variances are an indicator that specific accounts require further analysis to determine the root cause of the change.

Strategic Decision-Making
City financial managers often take multiple years of financial statements and use them to make strategic decisions. If a city’s cash flows are waning and net income is falling, leaders can identify the trend and adjust operations to meet the challenges their organization faces. Similarly, if expenditures are rising faster than revenues year-over-year, city’s may want to consider reduced service levels, and/or new sources of inelastic revenues. Financial reports aid management in making the decisions that will ultimately guide their city's growth or decline.

See the report