Public financial management (PFM) systems centralize all fiscal functions of a government agency. These platforms manage accounting, budgeting, treasury, and auditing tasks that concern public money. PFM systems are essential for efficient collection, management, and expenditure of finances within an economy, which ultimately leads to improved trust and quality of life for citizens. While each government operates under a different set of laws and processes, PFM systems help governments provide effective public services, allocate resources strategically, and ensure continued market growth. These platforms connect multiple data inputs from various departmental systems to ensure all funds and budgets are accounted for when assessing overall financial health.
While standard accounting software can help governments manage their fund accounting, PFM systems apply that data to the budgeting process to identify the best resource allocation plan. They help governments formulate and execute budgets, and ensure constant financial monitoring and reporting. Additionally, these tools can draw data from tax & revenue collection software to ensure tax rates and public spending are not inhibitive to overall economic growth. They are intelligent platforms that most experts consider essential to the effective financial management of public money.
To qualify for inclusion in the Public Financial Management (PFM) category, a product must:
- Perform accounting, budgeting, treasury, and auditing functions for governments
- Provide visualization tools for budgeting
- Connect disparate financial systems across government departments
- Provide data analysis to ensure strategic public money allocation
