Joining the Paperless Revolution?

Top industry experts divulge best practices before you take the paper-free plunge.

July 21, 2008
by Hank Berkowitz

Regardless of whether you work in a small local firm or large public company, the productivity advantages of a paperless work environment are vast. But before jumping onboard the paperless wave, you want to make sure you do the conversion the right way the first time, with the right solution provider along to help you from Day One. Last week’s column delved into why now is a good time for CPAs to consider going paperless and divulged some of the biggest misconceptions CPAs have about going paperless.

To help you understand both the challenges and rewarding opportunities of going paperless, CPA Insider™ invited the following thought influencers (listed alphabetically) — Dr. Chandra Bhansali, President, AccountantsWorld; James C. Bourke, CPA, CITP, Partner, WithumSmith+Brown; Bob Dias, vice president of product and segment management, CCH; Scott Francis, Director of Product Management, Imaging Products Group, Fujitsu Computer Products of America, Inc.; Randolph P. Johnston, Executive Vice President, K2 Enterprises; Roman H. Kepczyk, CPA, CITP, President, InfoTech Partners North America, Inc.; Rene Lacerte, CEO & Founder, Bill.com; and Dave Packer, Director of Professional Services Industry Solutions, Interwoven — to share their insights on this hot button topic.

Panelists, at what stage of a firm’s or company’s evolution are they ideal candidates for going paperless? What are some telltale signs?

Chandra Bhansali (AccountantsWorld): Contrary to common belief, small to mid-size firms and even start-up firms are the ideal candidates for digital office technology. They carry a lot less baggage and can implement a suitable solution almost painlessly.

Randolph Johnston (K2 Enterprises): The time is right when the business becomes serious about client service and effective workflow, not appeasing inefficient paper-centric users.

James Bourke (WithumSmith+Brown): It’s never too early for a firm to make the move. In fact, I would argue that the smaller the firm, the easier and smoother the transition. Most of the vendors today have designed scaled down, simple solutions of their higher end products for the smaller firm. If I were starting a smaller firm today, I would jump on the electronic workflow process.

Rene Lacerte (Bill.com): Agreed. Every business is an ideal candidate for going paperless. We have all lost bills, paid vendors late and forgotten the details of a particular transaction five minutes after it was paid, let alone five months later.

Roman Kepczyk (InfoTech Partners North America, Inc.): First of all, firms should select a product that integrates easily with their primary service applications, which are usually the tax or audit departments and making sure that this integration includes robust features such as an integrated portal and easy ability to integrate documents delivered via email and all primary accounting applications. Any firm that has ever misplaced a file (which is everyone) or any firm that is concerned about the security of its documents or disaster recovery should implement a document management/workflow solution.

Scott Francis (Fujitsu Computer Products of America, Inc.): I think the stage varies for each organization, not necessarily by market, but rather by its actual consumption and use of paper. If an organization is allocating a lot of resources to access paper documents onsite or offsite, or if it notices a significant portion of its office space is used for file storage, or if it notices rising customer service issues due to lost or illegible information, then it should seriously consider an electronic document management system.

How about from the large firm’s perspective?

Bourke: From a large firm perspective, now is also the time to switch. The solutions on the market today are proven and tailored to our industry. The large firm can expect to see a significant increase in realization in the first 24 months if the solution is deployed correctly.

Bhansali: Larger firms have no choice but to adopt digital office technology for smoother workflow.

What kinds of workflow challenges are accounting firms and corporate finance departments trying to solve when they decide to go paperless?

Francis: By implementing a document management system organizations are trying to reduce their overall operating costs and increase productivity. A document management system enables companies to retrieve client documents faster and prevent lost or illegible information, thus maximizing customer service and minimizing customer frustration.

Dave Packer (Interwoven): There are many reasons accounting firms have been "going paperless" but three in particular are priorities for most firms: (a) improving efficiency and productivity, (b) minimizing risk, and (c) enhancing client service. 

Johnston: Four things come to mind for me: (a) Rapid retrieval, (b) better client service, (c) appropriate records retention, and (d) uniform documentation.

Bourke: In a “paper-based” environment, there is significant flexibility in the process. In other words, there could be many ways to push work product through the process, each specific to the partner in charge of the engagement. In an electronic workflow environment, the entire organization needs to be on the same page with one way to process the flow through the cycle.

Lacerte: Going paperless means eliminating the lack of controls and accountability. No more lost bills/documents, no more wondering if an expense was approved, no more wondering if the amount should be capitalized or not. With full visibility into the document and the processes, the CPA and the finance department know what is going on from any location. This results in much better collaboration between the CPA and the client as well.

Kepczyk: The primary challenge in both types of organizations is getting everyone to adopt the new procedures consistently within their departments. All of the CPA document management vendors have created very strong implementation manuals and training, so it is up to the CPA firm to continue to follow through on this training.

Bob Dias (CCH): One of the biggest problems organizations are trying to eliminate is professional time spent on routine, repeatable tasks that can be automated, freeing staff up for more strategic activities. Other issues paperless solutions also address include reducing costs for supplies, for example, paper and toner; and security and compliance issues. For example, there are no concerns about paper files or work product being carried out of the office or misplaced. Risk mitigation also is another issue paperless can solve, because specific retention periods and automatic destruction upon expiration parameters can be set up.

What kind of benefits do businesses find in going paperless?

Packer: By reducing their reliance on paper records and the time and cost to retrieve them, firms are becoming much more efficient and productive. No matter where financial professionals are located, a content management solution enables them to access, share and collaborate on consolidated client files. Firms are able to enhance client service by improving responsiveness to client queries and providing clients with secure 24/7 access to statements, returns and reports. Moving to an electronic environment also ensures business continuity. 

Kepczyk: I agree. A key benefit is peace of mind and security of their documents as it is not possible to store digital back-ups offsite from the firm. The other benefits are the ability to search 100 percent of all files to find something and to force standardization of file naming and directory structures, which in the long run make it easier for everyone to use the system.

Lacerte: Our customers are seeing their bookkeeping time reduced by 50 percent to 80 percent. Good paperless solutions take care of all the client’s workflow, document storage and bill payments. Our customers no longer spend time filing, routing or paying bills. All of it happens automatically and is seamlessly integrated with the client’s accounting software.

Bourke: I can give you half a dozen benefits right off the bat: Better compliance and adherence to firm standards; increased realization within 24 months of deployment; greater security over digitally stored records; 24/7, anywhere-anytime access to your records; scalability (addition of new client, mergers, acquisitions) and the ability to address client requests for documents instantaneously.

Bhansali: Benefits depend upon the level of implementation. For starters, let’s say a firm goes for a broader paperless implementation that enables them to receive much of their source data in electronic form, along with a web-based document management system that lets them share documents with their clients. Under this scenario, going paperless will streamline the firm’s workflow, greatly enhance productivity by minimizing data entry, increase accuracy, strengthen client relationships and ultimately raise the bottom line.

Next week our panelists divulge the common implementation mistakes and recommend measures that CPAs can use to gauge the success of a paperless office initiative.

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Hank Berkowitz is the Publisher of AICPA’s Insider™ electronic newsletter group in
New York City.