Staffing shortages in local government finance are creating a turning point for payments and modernization in the public sector. The coming year is projected to present many challenges to public sector finance teams, one of the first and foremost challenges being the silver tsunami. Experienced accountants and finance professionals are reaching the age of retirement faster than they can be replaced, and the recruitment of new talent is proving to be a difficult task for local governments.
Finance leaders are having to take a hard look at how their teams operate today, especially in the day-to-day work on collecting and reconciling payments.
At the heart of this challenge is a simple truth: many agencies are doing more with less, and manual processes that once seemed manageable are now straining already stretched teams.
A Shrinking Workforce, Growing Demands
Baby Boomers and even the top end of Generation X are reaching retirement age, creating a wave of open positions without enough replacements waiting in the wings. According to MGO, fewer students are entering accounting programs, and competition with the private sector for finance professionals is rearing its head. It’s difficult for local governments to attract and retain staff. This creates shortages in roles that are essential for financial health.
It goes without saying that those who are in public sector finance roles currently are experiencing heightened workloads. Compliance standards have grown to be more strenuous, grant reporting has become more complex, and communities still expect timely financial services like easy and modern ways to pay their bills, permits, and fines. Simply put, the finance office is expected to deliver more even as the pool of skilled staff shrinks.
Where Manual Processes Hurt the Most
One of the hardest hitting areas for understaffing is payment processing and revenue workflows. Many local governments are still relying on a mixture of tools to get the job done, such as spreadsheets and paper forms to accept and reconcile payments. These manual processes demand time from finance teams that they no longer have to spare.
When staff spends hours every week manually matching payments to accounts, updating ledgers, and chasing down missing information, the focus is taken off high-value work like forecasting, planning, and strategic financial analysis. This also increases the risk of error, which can lead to delayed reconciliations, compliance issues, and even problems with budgeting. Even the most well-intentioned teams can find themselves overwhelmed.
We dive further into this trend in our blog How Public Finance Teams Are Expanding Without Adding Personnel, which highlights how automation and process improvements are helping finance offices stay effective even as staffing levels decline. Rather than replacing people, these tools help teams focus their expertise where it matters most.
Modern Payment Systems Offer a Way Forward
One thing to note is that streamlining payments isn’t just about digitization. For decades we’ve been hearing about digitizing everything, from payment processing to storing your grandma’s best recipes. Often, that means working in online spreadsheets, files, and email. We’re talking about moving a step beyond and adapting to the realities of fewer staff and rising expectations from residents and businesses who interact with the local government every day.
The digitization we’re talking about simplifies how governments collect, track, and report revenue. Modern payments platforms let residents pay in the ways they prefer, whether it be online, at a kiosk, by phone, or in-person. The best part is that all of this can be accomplished without requiring staff to be involved in every step. It also gives extra capabilities for finance teams to consolidate data, see all incoming payments in one place, and reduce the time spent reconciling siloed systems.
For many agencies, this shift has immediate impacts:
- Less time spent on routine tasks: When payments flow into a centralized system, there are fewer manual entries and fewer opportunities for mistakes.
- Faster access to revenue data: Instead of piecing together reports at month-end, finance teams can see trends and totals in real time.
- More focus on strategy: Staff can shift from transactional work to forecasting, reporting, and planning — the kinds of activities that strengthen long-term financial health.
These impacts are explored in more depth in the on-demand webinar Rethink Government Payments: Centralize, Automate, and Reduce Delinquency, which examines how payment modernization can support finance teams facing staffing shortages and rising service expectations. In a time when every minute of staff time is precious, reducing the burden of basic workflows can make a meaningful difference.
Why Payments Matter to the Broader Finance Office
Some might wonder whether payments modernization fits within a broader finance strategy. The answer is yes — and in a very real way.
Revenue is the lifeblood of any government. Whether it’s utility bills, property taxes, parking fines, or license fees, timely and accurate collection helps ensure funds are available when departments need them. When payment collections are slow or confusing to residents and local businesses, revenue going into the general fund or budget is often delayed. It can also lead to more calls to the finance office from residents or businesses seeking help.
Payment solutions, like the kind built for public agencies that offer an intuitive online portal, self-service kiosk, and consolidated reporting, free staff from routine tasks and let them focus on meaningful work.
This matters whether a town is managing utility billing, a city is tracking revenue across departments, or a county is looking for clearer data on where its funds are coming from.
Taking a Proactive Approach
Staffing challenges are not something finance offices can fix quickly. Rebuilding hiring pipelines takes time, and even the strongest recruitment and retention efforts do not solve today’s workload pressures. In the meantime, finance teams still have deadlines to meet, audits to prepare for, and residents counting on timely service. That reality can feel exhausting, especially when the work never seems to slow down.
Some of the most resilient finance offices are not waiting for staffing levels to return to what they once were. Instead, they are taking a hard look at how work gets done and asking honest questions about where staff time is going. When experienced professionals are spending hours on repetitive tasks, it leaves little room for analysis, planning, or even catching their breath.
This is where simplifying everyday processes can make a real difference. When routine work like collecting and reconciling payments is easier to manage, teams gain back time and mental space. Modern payment platforms built for government environments help reduce manual steps, bring data together in one place, and make it easier for residents to pay without needing staff support at every turn.
The result is not just efficiency for efficiency’s sake. It is a finance team that can focus on higher-value work, leadership that has clearer insight into revenue, and an organization that is better equipped to keep moving forward, even with fewer people at the table.
Making the Case for Change
Even when the need is clear, finance leaders still need to justify investment. Budget constraints and competing priorities make it essential to articulate not just what needs to change, but why.
For teams navigating local government finance staffing shortages, the strongest case often centers on time saved, risk reduced, and capacity gained. A modern payments platform can help agencies maintain service levels without overburdening staff, while also improving transparency and control.
For those looking to build internal alignment, the resource Building a Business Case for a Modern Payments Platform walks through how to frame the conversation, quantify the impact, and connect payment modernization to broader organizational goals.
Staffing shortages are unlikely to disappear anytime soon. But by rethinking payments and embracing modernization, local government finance teams can adapt, protect their people from burnout, and build systems that are ready for what comes next.
Key Takeaways
- Staffing Shortages Impact Finance: Local government finance staffing shortages are increasing workloads and straining manual processes.
- Manual Payment Systems Are Inefficient: Reliance on spreadsheets and paper forms slows down payment processing and increases error risk.
- Modern Payment Platforms Enable Efficiency: Automation and centralized systems help finance teams focus on strategic work and reduce routine tasks.
- Payments Modernization Supports Broader Goals: Updated payment solutions improve revenue collection and data clarity for local government agencies.
- Proactive Change Mitigates Burnout: Embracing payment modernization helps finance teams adapt to staffing shortages and protect staff well-being.
Conclusion
To address local government finance staffing shortages, agencies must modernize payment systems and processes to maintain service levels, reduce risk, and support both staff and community needs.
FAQ
What are the main causes of local government finance staffing shortages?
Local government finance staffing shortages are mainly caused by retirements among experienced professionals and difficulty attracting new talent to public sector finance roles, according to industry sources.
Where can I find resources on modernizing payment processes in local government finance?
You can explore resources such as webinars, case studies, and guides on payment modernization for local government finance teams on organizational websites and public sector finance platforms.
How can agencies address local government finance staffing shortages through technology?
Agencies can implement modern payment platforms and automation tools to streamline workflows, reduce manual entry, and enable staff to focus on higher-value financial analysis and planning.
What should finance leaders consider when evaluating payment modernization solutions?
Finance leaders should compare features such as automation, centralized reporting, integration with existing systems, and user experience to ensure the chosen platform addresses both current staffing shortages and future growth needs.
