CPA firms handle large quantities of electronic and paper documents. Processing these documents in an efficient manner and being able to retrieve them when needed is key for modern accounting firms.

It is well accepted that the successful application of technology is critical to the competitiveness of today's enterprise. Choosing software to run an accounting firm is challenging. Frequently it’s difficult to find a single vendor that provides an all-in-one solution which can encompass everything a firm needs.

There are best-of-breed solutions for each niche -- such as tax, audit, etc. -- but sometimes using the best niche product can lead to problems. Frequently silos of information are built based on the type of work being done for the client. These silos are stored in different software packages and it can be difficult to find a complete view of the client’s work product without using several different applications.

Most of this information is stored as documents (tax returns, write ups, etc.). The firm of the future must rely on a Document Management System (DMS) to store a client’s information in the most efficient manner possible. A third party DMS can also be used to integrate the other line-of-business applications and combine the documents from those into a single information silo.

DMS = Do More with Less

Efficiency is the watchword for any accounting firm in today’s marketplace. With the current economic climate, it is likely your clients are examining all expenses and looking for alternatives or requesting changes. In order to remain competitive, firms must continue providing the same or better level of service with a reduced level of expenses. Simply put, many of us must do more with less.

There are four ways in which an DMS can improve firm efficiency:

  1. Reduce the labor involved in storing and handling paper documents. This is by far the biggest component of the Return On Investment (ROI) of an DMS
  2. Reduce the space necessary to store paper documents
  3. Increase the ability to comply with appropriate regulations
  4. Allow employees to collaborate and work remotely, thereby decreasing the amount of office space necessary particularly during the heavy seasonal periods when temporary employees are needed

Almost all of the line-of-business applications used by accounting firms also incorporate some sort of document management system within the confines of the application. The problem is that these document management systems are frequently not able to accommodate all documents the firm requires. This becomes a real issue when trying to build a single information source for each client.

The following features are necessary in any robust document management solution:

  • Maintain a repository of electronic documents
  • Provide a mechanism for securing the documents
  • Integrate with other software solutions being used
  • Provide a method for putting the documents into a defined workflow
  • Supply audit data providing the four W’s (Who, What, Where, When)
  • Comply with regulatory requirements (retention, back-up, security, etc.)

The Holy Grail: A Single View

A worthy goal, and perhaps the number one contributor in making a firm more efficient, is to have a single repository that contains all information about a client’s work product. A system such as this would have to integrate successfully with the end product of the other applications being used.

There are 2 integration points for any DMS:

  1. Getting documents into the system
  2. Retrieving the documents when necessary

A good DMS will offer a number of document capture solutions (depending on volume) and multiple ways of getting electronic documents into the repository. Most are based on standard Windows techniques such as drag and drop, printing and so on.

These methods can be used by any leading application and are very easy to learn and use. Other tools that can be applied when putting documents into the repository including: Optical Character Recognition (OCR), barcode reading and full text indexing. These tools make automatic filing and the retrieval of documents much easier.

Using my company, Cabinet NG (news, site) as an example on the retrieval side, an application called Retriever can be attached to virtually any Windows based application. Using Retriever, users can call up documents created by any of the other applications used by the firm. But no matter what retrieval method is used, it must respect all of the security parameters set for that user.

Top Selection Concerns

1. Operational Fit

Whatever system you select, it first must fit with the way your firm operates. It should provide a robust set of features that allow you to configure the system to meet your usage scenarios. Be wary of expecting your users or the firm to change how they do daily business. Some change is normal, but lots of change often spells trouble.

2. Integration Ease

For successful adoption, a DMS must integrate with other line-of-business applications in a smooth and intuitive manner.

3. Product Origins

Finally, make sure your selected DMS is in fact a system which was designed and built from the ground up as an DMS.

Don’t accept multiple silos of information in the firm as a necessary evil. Modern content management technologies have solved this problem. With some diligence it is a concern which can be addressed.