October 2003

Document Management: Turning Paper into Profits

By Joe Harpaz

An electronic document management system can not only enable a CPA firm to improve productivity, reduce operating costs, and ensure compliance with professional standards and regulations, it can also open opportunities for enhanced customer service. Document management can be a value-added service for clients. Possibilities range from implementing an internal system to leveraging an Internet-based service that provides existing infrastructure and templates in a subscription model. Many firms are exploring the revenue potential of providing document management as a value-added service to clients who are searching for a cost-effective method of managing their records.

There has been additional interest in document management as a component of business continuity planning, preparing for an event that might render staff unable to access vital documents and records. New legislation—such as the Health Insurance Portability and Accountability Act (HIPAA) and the Sarbanes-Oxley Act—also mandates that organizations upgrade their document-management procedures and record-retention policies.

Document-Management Proficiency

The first step toward turning document management into a revenue-producing service is to assess the firm’s own document-management efficiencies and analyze workflow in all practice areas. Consider where documents come from and how they are created, as well as the various retention requirements.

A firm will also need to plan for scanning requirements, such as the installation of document scanners and the training of scanning staff. Both company growth and expansion must be addressed as well, to ensure that the document-management system and its underlying infrastructure can store the historical records required by both the government and the firm’s policies. Selecting an Internet-based service will minimize this task because the underlying infrastructure is already in place. As with any system, however, the firm must also consider technology obsolescence: Will the file formats used to store documents today be accessible seven to 10 years from now? If planned properly, a document-management system will enable a firm to maintain multiple copies of its entire electronic file storage, ensuring that critical documents are part of a disaster-recovery plan.

Once the internal document-management system is in place, the next step is to share documents externally. The Internet enables a firm to share documents securely and cost-effectively, bringing new value to both staff and clients. In the past, many accounting software packages allowed for local copies of software to run on a laptop via the manual or automated synchronization of files. This method of working remotely will become less common as wired and wireless Internet access becomes commonplace.

Beyond giving accountants a remote link-up to documents, an Internet-based service is an excellent vehicle for providing clients easy access to the work a CPA firm produces for them. By giving clients Internet access to their tax returns and financial records, CPA firms not only improve customer service, but also reduce their print production and mailing costs.

There are procedural and technical obstacles related to any document-management implementation. CPA firms are well positioned to address these issues related to document-management implementation because they need an in-depth understanding of their clients’ businesses in order to provide advisory services, conduct audits, and perform tax work.

Joe Harpaz is the CTO and co-founder of Immediatech Corporation (www.immediatech.com).

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