By Roger Mongeon
A majority of firms will be paperless within the next three to five years. Right this minute, managing partners are seeking out the most productive technologies to streamline workflow, while also providing instant access to client files.
A plethora of benefits is gleaned by an accounting firm when it converts to a paperless document management (DM) system. Gone are the laborious tasks of having someone organize, file and retrieve client files; gone are the rows of file cabinets and physical storage costs; gone are the unbillable hours spent tracking down lost, misfiled or damaged paper documents.
The new paperless world seems to make document storage, retrieval, collaboration and security seamless, effortless and affordable. But beware, there are risks and pitfalls to going paperless.
First, there is the risk of putting client data into a proprietary environment that is not platform agnostic. Platform agnostic means that a DM system can work with any other platform. The files are still accessible and usable regardless of the type of platform.
Second, risk can include the fact that some paperless document management systems do not integrate with other software applications used by accountants. This makes it hard to use best-of-breed technology solutions across the firm.
And finally, there is the risk of using a paperless DM system provider that only provides software. Document management systems go far beyond technology.
Storage of client data
Unfortunately, some DM technologies will store client data files in a proprietary database. These document management systems use an SQL (structured query language) database that makes the files proprietary to that vendor’s application.
As documents are put into the database, the software replaces the file’s name with an index number. Only their software can interpret the number to cross-reference it with parameters that describe the document.
Firms that went this route years ago find themselves in a client data hostage crisis when they attempt to move to a different document management system. This situation occurs when there is no easy way to extract large quantities of documents from the proprietary file storage system.
To avoid the risk of having client data held hostage, look for a DM technology that stores your client files securely on your servers in a manner that allows you to easily return to accessing the data through a familiar tool like Windows Explorer.
Similar risks apply when using a service bureau to act as your document management system.
Often firms find it difficult to move away from a service bureau where all client files are stored on their servers through an Internet connection. Repatriating the documents back to your own computer equipment or moving to another service provider can be costly and difficult, and may result in losing some document search characteristics that were unique to one system.
Trapped in the suite
When a firm takes action to move in a paperless direction, the most readily available solution may be to stick with a vendor that offers a suite of technology from start to finish. Purchasing a suite of technology from one vendor sounds logical, but sometimes by doing this a firm could be selling itself short of some other amazing technologies on the market today. Investigating and implementing best-of-breed DM technologies can improve productivity, increase ROI, and increase billable hours. This frees up time for consulting and advising clients.
For example, a Toronto firm opted for best-of-breed technology for their DM system. The managing partner wanted increased productivity, increased control over files, efficient and logical file storage capabilities and more. To become paperless, the firm adopted a suite of templates and Doc.It’s DM technology to streamline the process.
This resulted in better process efficiency but it also fulfilled other tangible benefits such as ROI in staffing, improved firm morale, operations and client communications.
This firm avoided getting trapped in a suite of applications from one vendor. They enjoy using best-of-breed applications that integrate well together. Through rough calculations, the firm estimates the move has saved them $200,000 annually. This figure is attained by adding up three staff salaries (junior, senior and administrative) that were previously storing and finding files. All users can now call up files immediately during client calls or visits.
Technical integration is key
Accountants are increasing their use of technology to speed processes and leverage firm productivity to gain a competitive advantage. The success of the introduction of a new technology hinges primarily on how well technology integrates and affects practice workflow, productivity, and more often than not, morale.
While it remains extremely important to assess how well a new technology will communicate
and mesh with existing hardware and software, the technology must also be comfortable for users while positioning the firm to remain flexible enough to integrate or shift to new technology for years into the future.
Accountants’ jobs become much easier when one technology can seamlessly communicate with another. However, when the topic of technology integration is addressed, how well a technology leverages staff and accountants’ skill sets, existing staff-client relationships, and a firm’s best practices workflow and processes, deserves significant consideration.
Practices should fully explore the full-circle of integration (hardware, software, a practice’s preferred workflow and processes, leveraging staff skill sets, existing staff-client relationships) to avoid added layers of work later. Failure to do so increases the risk of forced unplanned expenses, with employee morale plummeting as job tasks shift or change in a way that is not intuitive or familiar.
Best practice implementation
The American Institute of Certified Public Accountants serves as the national representative of CPAs before governments, regulatory bodies and other organizations in protecting and promoting members' interests. As new legislation is proposed and laws are passed, it opens the door for technology companies to help accounting firms adapt not only their systems, but their methodology and best practices to prepare for change, lower their risk and remain compliant.
When a firm is concerned with state retention rules, technology providers that remain educated on each unique environment are better suited to help individual firms implement a compliant paperless DM workflow solution.
A paperless world
It is quite common for a technology provider to make it hard to migrate or transition to different platforms. Doing either one of these tasks often adds time and costs to a firm’s budget. It is typical for some DM vendors to focus on developing software that will work optimally within their own bundle of applications, or with a limited group of outside technology applications. This denies a firm the ability to implement best of breed applications.
In thinking about compliance and best practices, remember that the technology is only as good as its developer, user and the workflow system that pulls it all together. Working with a DM technology provider is great; having a DM technology partner is even better.
The new world of paperless seems to make DM seamless, effortless, affordable and the perfect solution for any firm. Certainly there are risks, dangers and pitfalls to going paperless, but don’t forget the rewards. Consider the entire realm of possibilities and pick the people, processes and technologies that get the firm there safe and fast.
Roger Mongeon is the Vice President of Sales & Marketing at Doc.It®. Doc.It® provides complete paperless document management solutions including software, training and implementation methodology developed by accountants for accountants. To learn more, visit www.doc-it.net.
A similar version of this article was originally published in the February 2010 issue of The Bottom Line.