Having instant business decision support and reducing the extra effort required to manage paper have a direct impact on the bottom line. A recent survey conducted by PricewaterhouseCoopers indicated that in the average office—

CPA firms of all sizes are implementing electronic document management and finding they can trim the amount of money spent handling and storing paper.

What Is Electronic Document Management?

Electronic document management is a hardware and software solution that allows users to capture information from many sources: paper, facsimile, e-mail, the Internet, even handwritten notes. Captured documents are then stored digitally, simplifying search and retrieval and allowing the information to be retrieved by common applications and integrated into other documents.

The greatest benefit of an electronic document management system is enhanced productivity. According to a recent Ernst & Young study, deploying electronic document management not only provides a fail-safe backup system, but also doubles or triples processing capacity while halving the time needed to assemble information.

The indexing capabilities of electronic document management software allow users to retrieve information in seconds from a desktop PC or workstation. The indexing fields applied to a document allow searching by client name, invoice number, date, or any other selected information. The entire text of a document can even be indexed and searched through OCR (optical character recognition) software.

Today’s world of electronic commerce also offers CPAs a host of components to customize document management for the accounting environment. Client information can be encrypted for security and made available over the Internet or distributed via CD-ROM. Internally, firms can implement workflow protocols to improve specific business processes. Microsoft Office integration or COLD (computer online data) electronic report management can be combined with any and all of these options as one seamless system.

Document management isn’t only for large firms. Today’s imaging systems are running on Windows 95/98, in NT environments, as stand-alone workstations, or linked across a network. A typical single-user system consists of a Pentium 166 MHz or higher processor, document management software such as File Magic or Fortis, a flatbed scanner, a storage device, and a printer.

Storage options. Information scanned into a document management system must be saved to an accessible and durable medium. Most storage media fall into one of two categories: magnetic or optical. Media choice is largely determined by the volume of documents to be stored, required archival lifetime, and frequency with which they will be accessed.

Information can be stored magnetically onto a local hard disk or a network volume. A RAID (redundant array of independent disks; a series of hard drives seen by the computer as one large drive) system is a good choice for organizations that need to view documents quickly and ensure data protection. Rather than filling up one drive with data before moving to the next, data on a RAID is spread across all the drives, facilitating data recovery if one drive fails. The configuration of a RAID system varies, although a storage capacity of 50–150 GB is typical.

Optical platters contain up to 5.2 GB of information and provide mass storage at a fairly low cost. They can be accessed in single-disc drives or jukebox configurations containing 20–100 platters. There are two types, WORM (write once, read many) and RW (rewritable). When the legality of scanned documents is a consideration, many firms choose WORM optical disks, which cannot be altered and are generally acceptable as evidence in legal proceedings.

The familiar CD-ROM is also very cost effective, although its capacity is limited to 650 MB. Because CD-ROM drives are widely available, this medium is often used when data needs to be widely distributed. When data requirements are large, CD-ROMs can be configured in jukeboxes of 20–200 CDs.

Choosing a System

The key to choosing the right electronic document management system is understanding the firm’s business priorities and selecting a package that offers the necessary features. Organizations should ask themselves the following questions: