Special Focus Report: Going Paperless

Sponsored by: CCH, a Wolters Kluwer business, Concur Technologies, Doc.It, Fujitsu Computer Products of America

More than 30 years ago—even before the proliferation of personal computers—information technology experts predicted the advent of paperless offices. Flash forward to 2010, when the PCPS/TSCPA National MAP Survey asked CPA firms about their use of software, hardware, social media and other tech tools. The findings showed 52% of all firms surveyed reported operating in a paperless work environment. Larger firms (by revenue) were more likely to be paperless. However, the term “paperless” has many different meanings, and many businesses are at different stages in the progression away from paper.

In this special report, leaders in the field of document management talk about the state—and the future—of paperless and its effect on accounting. Joining us (listed alphabetically) are Howard Brown, president and CTO of Doc.It Inc., a provider of digital document management solutions; Scott Francis, senior director of product marketing, Imaging Products Group of Fujitsu Computer Products of America, a provider of imaging solutions; Bob Lewis, senior director of business development, SMB, Concur Technologies Inc., a provider of integrated software solutions for expense reporting; and Mike Sabbatis, president and CEO of CCH, a Wolters Kluwer business and provider of tax, accounting, and audit information, software, and services for North America.

Where are accountants in the paperless journey today—and where are they heading?

Mike Sabbatis, CCH: Today, professionals are breaking down paper-based boundaries and embracing digital work environments to meet client demands of anytime, anywhere service.

In the independent, nationwide CCH Accounting Firm Client Survey, 82% of businesses said they will move more of their processes away from paper to digital and that they expect their CPA firms to do the same. Further, 72% said it’s very important for their CPA firm to work in a digital environment.

Howard Brown, Doc.It: We think that paperless began for accountants in the 1980s, when they began using spreadsheets and word processors and then moved to tax software. Paperless tools have evolved, and today accountants do almost everything in a paperless format.

We started in the document management business in the year 2000, and we see document management as the next major leap in the paperless journey, adding structure and standards to the paperless revolution. An effective document management system includes five features: security, retention management for the document life cycle, an integrated search engine, a check-out/check-in system so that multiple people can work on individual documents, and an audit trail.

Scott Francis, Fujitsu: These days, we’re seeing a shift from on-premise-based document management solutions to hosted applications in the cloud. Fujitsu products provide accountants with that bridge to the cloud, so wherever digital information needs to be processed or stored, they can be confident their information will be captured by the best technology available.

Bob Lewis, Concur: For clients, the T&E [travel and expense] process has historically been very paper- and time-intensive, with very little visibility into spending. Concur easily integrates travel booking and expense reporting through its Web-based and mobile software, eliminating the need for paper receipts and piles of expense-tracking spreadsheets. Concur’s services include comprehensive Web-based and mobile tools that enable users to create and submit accurate, in-policy expense reports that managers can then easily review, approve, process, and audit all in one solution. Automating this process and going paperless saves clients as much as 80% of the time it takes across the expense reporting process.

Return on investment is an important consideration when changing technologies. What kind of ROI can accountants expect from paperless technology?

Sabbatis: We’ve seen figures that a paperless strategy can yield savings of as much as 30% to 40% in expenses. One of our customers who moved to digital processes saved $14,000 in two years just on what they used to spend on paper. Another customer reports that in a digital environment, it takes about half the time it used to for completing a corporate return.

Francis: A big advantage to paperless investments is that there are numerous ways to quantify ROI—both hard and soft dollar costs. By implementing digital workflow tools, firms can reduce invoice processing time and eliminate late fees as well as take advantage of early pay discounts. By implementing a distributed capture solution (scanning at the point of paper origin), organizations can minimize charges from not shipping hard copy documents to a central location. DeepSky Accounting, an outsourced accounting firm in Orange County, California, actually provides its customers with a Fujitsu ScanSnap scanner so that all documents can be easily digitized and processed quickly without any added shipping fees. And both client and CPA have access to all necessary documents in real time 24/7.

Brown: Last year, we did an independent survey of our existing clientele, which showed that the greatest benefit of a document management system is document retrieval. Document retrieval probably doesn’t start to play a big role in ROI until year 2. Then it becomes a major factor. If somebody were to save 20 or 30 minutes a day on document retrieval alone, we think that is a pretty good ROI in itself, and that is on top of the thousands of dollars in cost savings on paper, photo copier, printing and filing costs, and other things.

We have an ROI calculated for the accounting industry. It shows that an accounting firm of 20 persons could save over $150,000 a year in all the areas that document management affects.

Lewis: There are many obvious benefits of going paperless, including saving accounting firms (and their customers) time and money while streamlining their business practices. This trend is gaining momentum and will continue, because it makes the business of providing accounting services to clients more efficient, productive, and profitable.

It is important to remember that the process of going paperless begins with your clients. With an organized and paperless client, it is far easier to go paperless as a CPA or firm providing tax and other year-end accounting services. When it comes to tax or audit time, businesses have an electronic repository of expense reports; saving the tax accountants (or auditors) the low productivity hours traditionally spent working through the details to assure expenses are hitting the right line items.

Per Forrester Research, automating the travel and expense management process by using Concur can return up to a 242% ROI with payback occurring in less than 12 months. So going paperless makes sense for both the accounting firm and its clients.

What kinds of things should a CPA take into consideration when going to a digitizing process?

Sabbatis: Firms today are better positioned than ever to benefit from digitized tax prep, with solutions now available for every step of the process. Firms need to seize the opportunity to create a seamless and complete workflow across processes. It’s not about how one step in the process is performed best; it’s about how every step is performed best, and how it seamlessly flows into the next step in the process, and across the entire workflow. This is what CCH calls Best in Process, and it’s what CCH delivers to our customers with integrated solutions aligned with optimized work processes.

Francis: Determine whether scanning will occur on the front end or after the documents are processed. Combining front-end batch scanning with workflow or other tax preparation tools will provide maximum benefit and productivity, eliminating the paper bottlenecks and providing increased visibility during the entire tax prep process.

Brown: Having the right tools is important—good hardware, software, and scanners that can handle tax slips of all different sizes, and multiple monitors. Test everything three or four months before tax season starts. Have the individual steps identified, because in tax season, everyone needs to know precisely what the steps are in the digital process. Most firms want to have a best practice document with the steps and have the staff trained because, once you step into tax season, there is no wiggle room.

It seems that going paperless can only benefit a firm. Are there any downsides?

Francis: Paper is only as safe and secure as the environment in which it is stored. New cloud technologies enable firms to manage and store content 100% off site, so there is no risk of losing data. For organizations that still feel the need to store electronic files in-house, a recovery backup plan (including off-site storage) can prevent any loss of data in the event of a disaster.

Brown: I think a well-implemented document management system can only benefit a firm. But backup is essential as is having a disaster-recovery plan in place.

Sabbatis: Some people may think that the electronic environment could depersonalize the relationship with clients, but the opposite is true. Through productivity gains and automation of lower-value work, you have the opportunity to deliver more personal and customized high-value services to your clients than ever before.

How are scanners evolving to help accountants digitize their tax-prep process?

Sabbatis: Scanners may seem like a fairly straightforward technology—but don’t take them for granted. There are big gains by picking the best solution and making sure you optimize its use by having a scanning process at the front end of your tax process or workflow.

Equally important is having the right tool that can do a lot for you. A solution such as CCH’s ProSystem fx® Scan with AutoFlow Technology allows firms to not only digitize paper they receive from clients, but also to extract the information and provide leverage across their workflows. For example, it lets a firm extract data from common 1040 source documents; facilitate verification of this extracted information; import verified 1040 information directly into ProSystem fx® Tax in real time; and extract detailed gain and loss statement information to a preconfigured spreadsheet for easy reconciliation and import.

Francis: Fujitsu provides a wide range of scanning options for accountants. Some of the latest versions are ultramobile, USB-powered devices, so that accountants can easily digitize a few documents on the road or at a client’s site. There are also network-enabled models (nonportable), which can enhance productivity of an entire accounting office by streamlining labor-intensive tasks into simple “job menu” buttons while still providing necessary security.

What other hardware would be helpful?

Lewis: Innovation continues to drive toward use of mobile apps that enable the capture of receipt images right on the smartphone, helping track costs and manage cash electronically. As employees travel and incur expenses, they can capture the expenses electronically as they are being incurred, so their expense reports are virtually completed automatically for them in real time, instead of weeks after the fact. Periodic and year-end work is far more efficient as the expense details are captured and supporting receipt detail is associated and stored electronically.

Brown: Monitors are one of the quiet heroes of document management. Monitors are very important because they effectively replace your physical desktop, where you used to lay papers out. You should be able to flip full-size images on your monitors so you can work the same way on your monitor as you did on your desk. So in the tax process, for example, you would want to be able to view a document in full size and not have to scroll them.

You definitely want to have at least two full-sized (not wide-screen) monitors (three are better), at least 19 inches. If you are using wide-screen monitors, select a 22- or 24-inch size, at least 11 inches tall so you can show a full page.

How are CPAs using portals—secure online storage areas—to collaborate with clients, and what are the benefits?

Brown: One of the important benefits of a portal is security. Another benefit, aside from general collaboration, is the ability to send large documents.

Francis: Today business is happening around the world 24 hours a day. Portals are removing hindrances like time differences and enable organizations to access information from anywhere.