How Governments Can Benefit from Accrual Data in Driving Efficiency and Cutting Costs
Governments across the globe are facing increasing fiscal pressures, greater public scrutiny, and rising expectations for transparent, accountable, and performance-driven governance. One of the most impactful yet underutilized levers of public financial reform is the shift from cash-based to accrual-based accounting. Accrual accounting introduces a transformative way to manage public finances—providing a complete, accurate, and timely view of a government’s financial position.
At Tech&Touch, we help governments spearhead this critical transformation by combining global reform design expertise with deep technology enablement. Our advisory model ensures that governments not only meet international standards such as IPSAS (International Public Sector Accounting Standards), but also build digital capabilities that support long-term fiscal sustainability and policy impact.
Challenge
Cash-based accounting has long dominated public sector financial management. However, it presents several limitations:
- Inability to track liabilities (e.g., pensions, payables)
- Poor asset visibility (e.g., infrastructure, equipment)
- Delayed and incomplete financial insights
- Limited forecasting and risk management capacity
- Incompatibility with modern PFM systems and performance budgeting
As governments aim to improve efficiency, reduce costs, and meet international reporting standards, there’s growing consensus that accrual accounting is not just a reporting shift—but a driver of fiscal discipline and value creation.
Solution: Tech&Touch’s Advisory and Digital Transformation Approach
Tech&Touch led a comprehensive advisory engagement with a GCC Ministry of Finance seeking to implement an accrual-based accounting framework and transition its financial systems from outdated on-premise solutions to a cloud-based GFMIS platform.
Strategic Reform Design
- Assessed current financial architecture, cash-based processes, and reporting limitations.
- Benchmarked against international best practices including OECD, IMF Fiscal Transparency Code, and IPSAS standards.
- Developed a roadmap for full accrual adoption across central and line ministries, incorporating a Chart of Accounts (CoA) reclassification strategy aligned with GFS (Government Finance Statistics).
Technology-Driven Enablement
- Designed the future-state GFMIS system architecture using Oracle and SAP Cloud platforms, embedding accrual logic across modules (GL, AP, AR, Asset Management, etc.).
- Integrated data sources from HR, procurement, and fixed assets to automate accounting entries and enable real-time monitoring of expenses, depreciation, liabilities, and commitments.
- Introduced dashboards and AI-enhanced analytics to support cash flow forecasting, policy impact simulations, and cross-entity financial performance comparison.
Institutional Capacity Building
- Developed training and certification programs for finance teams across government entities on accrual concepts, IPSAS, and digital workflows.
- Updated internal controls, audit frameworks, and policy manuals to reflect the shift from compliance reporting to performance-based financial governance.
Results & Impact
Cost Savings and Efficiency
By identifying and managing underutilized assets and unfunded liabilities, the government was able to reallocate budgets more effectively and reduce recurrent expenditures by 8% in the first year of transformation.
Transparency & Accountability
Audit readiness and financial statements were aligned with international standards, enabling clear reporting to stakeholders, donors, and international institutions.
Innovation Pathways Established
AI and RPA use cases are defined early, with governance and change models ready for execution.
System-Wide Interoperability
The cloud-based GFMIS is now integrated with HR, procurement, and planning systems—providing a holistic view of government operations and unlocking process automation.
Why Tech&Touch?
At Tech&Touch, we believe that technology is the enabler—but institutional reform is the driver. We deliver:
- End-to-End Reform Design: From IPSAS-aligned frameworks to digital GFMIS blueprints.
- Technology Advisory & Implementation Oversight: Cloud, ERP/GRP, and data analytics tailored for government.
- Capacity Building & Change Management: Supporting a smooth transition and sustainable adoption across entities.
- Public Sector Focus: With proven expertise in Ministries of Finance, Planning, and Audit across the GCC.
References & Resources
International Public Sector Accounting Standards Board (IPSASB): https://www.ipsasb.org
IMF Fiscal Transparency Code: https://www.imf.org/external/np/fad/trans/
OECD Accruals in the Public Sector: https://www.oecd.org/governance/budgeting/accrualsbasedaccounting.htm
