Special focus report: The path to paperless

Digital technology and how it is changing the way the world does business

Sponsored by: Doc.ItSurePayrollBlackLine

The path to paperlessTo succeed in business today, accounting firms have little choice but to go paperless. Driving this trend is the constantly changing environment—more complex standards and regulations, an unpredictable economy, and the rapid pace of business and technology development in general. In response, firms need efficient and cost-saving processes and solutions so they spend less time looking for documents and more time helping their clients—and responding to them faster. The accessibility, immediacy, and convenience of electronic data provide that kind of agility.

In this special report, leaders in the field of paperless solutions talk about where the accounting profession is today on the paperless continuum and the effect going paperless has on the future of the profession. Joining us are Michael Alter, president and CEO of SurePayroll, a Paychex company and a provider of online payroll services; Howard Brown, founder and CTO of Doc.It Inc., a provider of digital document management (DM) solutions; and Susan Parcells, CPA, close governance and product specialist of BlackLine Systems, a provider of enterprise software for automating and controlling the entire financial close process.

How does going paperless increase efficiency and save money? How do you measure it? How much does it save?

Michael Alter, SurePayroll: In terms of payroll, paperless means big cost savings and better security. As the first comprehensive online payroll company, weʼve seen astronomical savings since launching the business in 2000. Not only do we benefit, but our 35,000+ small business customers nationwide are saving nearly 50% compared to what they would pay for a traditional, paper-intensive payroll provider. We estimate that an accountant can create an incremental $500 to $1,200 per year per client by adopting paperless payroll. SurePayroll is able to pass on these savings in large part because we do not incur the expensive overhead of delivery and handling charges for paper checks and paper payroll reports.

Howard Brown, Doc.It: Letʼs replace the term “paperless” with “document management” (DM) since not all paperless solutions are document management systems. In most cases, the greatest efficiency gain from any document management system should be the dramatic reduction in time spent retrieving documents. It is a well-known fact that staff spends as much as 30 minutes per day searching for lost or misfiled documents. In addition, a comprehensive DM system should provide the tools to reduce engagement time, improve client service, and cut paper, printing, and copier costs significantly.

Susan Parcells, BlackLine: BlackLine clients using our OnDemand application have saved time and money in multiple ways—in preparing reconciliations and manual journal entries, reviewing and approving them by senior staff, tracking and reporting on the close status, and more efficient workflows in general. Independent research companies such as Nucleus Research have documented the ROI for some BlackLine clients as between 200% and 689%.

Where are accounting firms today in the paperless journey? Whatʼs the next big thing in digitizing the office?

Howard Brown, Doc.It: Firms that value process improvement, compliance, security, and standardization have invested in best-of-breed document management solutions. However, there are still many firms that have not yet recognized the efficiencies, cost savings, improved client service, and numerous other benefits of a well-implemented DM system. Many of these firms use “unmanaged” approaches like Windows Explorer or their engagement manager as a paperless solution. They have not yet recognized that these types of “homegrown” solutions are actually more expensive to maintain and lack essentials like security, retention management, search ability, version control, and collaborative tools to name a few.

Rather than adopting more technology, firms should consider standardizing their best practices as the next “big thing.” Every accountant is trained to prepare a tax return, but there is usually little emphasis in their training on developing an efficient, paperless process to reduce preparation cost. Without best practices in the process, technology will never be properly utilized.

Susan Parcells, BlackLine: Today, companies are looking for ways to reduce or eliminate paper-driven, manual processes. One such process is around the month-end close. BlackLineʼs software standardizes, organizes, and automates these processes. In addition, BlackLineʼs tool virtually eliminates all of the error-prone spreadsheets associated with manual-driven processes. As a result, accountants can improve the quality of their account reconciliations, reduce the workload, avoid the late -night number crunching, and spend more time on value-added tasks.

Whatʼs on the horizon for the electronic document management environment?

Michael Alter, SurePayroll: Software as a Service (SaaS) solutions, such as online payroll, will continue to drive the paperless trend. While the fundamentals of payroll have not changed, we are in the middle of a payroll process revolution. The emphasis will shift from “software” to “service.” Our focus has always been to give equal priority to service. SaaS offers more flexibility and choice. With Sure- Payroll, accountants can offer a program that serves a diverse set of clients with a diverse set of needs. For example, some clients may want to be billed per payroll, while others prefer quarterly. You want to be sure your payroll partner gives you that kind of flexibility.

Our service allows people to process payroll on their iPhone from anywhere in the world. Weʼve also offered our customers the ability to process on the road faster than ever before with our One-Click Payroll process.

Lastly, itʼs only a matter of time before direct deposit completely replaces checks in the vast majority of small businesses across the country.

Howard Brown, Doc.It: All DM systems share one significant inefficiency: the time it takes to check a document into the system. Systems require that you enter certain document properties like title, retention period, category, storage location, etc. One document might take 20 seconds, which may not seem like much time. However, what if there were a hundred or more documents a day to check in? Now we are talking about 20 minutes per day or more. Or what if a firm just completed 1,000 tax returns and wanted to store them in its DM system? How long would that take to check them in?

At Doc.It, we are constantly striving to improve product efficiency. We are in the process of adding sophisticated automation features to Doc.It Suite that will recognize and automatically check in a significant portion of documents including emails and large batches of tax returns, invoices, or other forms created from other programs or scanned into Doc.It Suite. This technology represents a large step forward in the evolution of document management software.

Protecting the privacy and security of client information is crucial. How does your solution address this?

Michael Alter, SurePayroll: SurePayroll provides secure sign-ons, and view and administrative access is controlled by accountants and their clients. We have security measures in place for our data center and our network, and system security is continually monitored by third parties. We encrypt your Social Security and account numbers, your information is backed up constantly, and we were the first in the industry to implement PINs. SurePayroll authenticates who it is speaking to through a secure call-in ID system and uses a sophisticated, proprietary system to identify possible misuse.

Howard Brown, Doc.It: Doc.It Suite provides an archive for “finalized” documents, the electronic equivalent of the paper file room. Although it would be nearly impossible to provide meaningful security in the paper file room, the Doc.It Archive allows unlimited flexibility in restricting access on a folder-by-folder basis.

Susan Parcells, BlackLine: Both BlackLine and its hosting partner, Rackspace, have successfully completed the Statement on Standards for Attestation Engagements No. 16 (SSAE 16) report – the AICPAʼs internationally recognized standard. In addition to meeting the SSAE 16 standards, BlackLine employs numerous technical and administrative controls to prevent unauthorized access and/or modification of customer data.

How mobile-enabled is your software solution?

Michael Alter, SurePayroll: SurePayroll is completely mobile. As long as the mobile device has internet access, accountants and their clients can process payroll 24/7 and enjoy access to all their reporting functions. Your clients can access their payroll from any airport, and their employees can view paycheck and benefits information at any time.

Howard Brown, Doc.It: Doc.It Suite is fully mobile-enabled. Individuals with internet access on their mobile devices can view the complete document history for a client from the Doc.It Archive or take the entire engagement on the road as well. When in the field, peer-to-peer network support is provided in addition to scanning tools. If your firm prefers to work through Terminal Services or Citrix instead, Doc.It Suite is fully compliant with these services.

Susan Parcells, BlackLine: BlackLine Systemsʼ financial software suite is internet-based and therefore easily accessible virtually everywhere and any time on any mobile device with internet access.

What shouldnʼt accounting firms overlook in going paperless?

Howard Brown, Doc.It: Assuming that “nothing is forever,” your document management system must provide an exit strategy for your valuable document assets.

Susan Parcells, BlackLine: When automating and going paperless via a web-based application, it is important that there is a comprehensive and secure backup and disaster-recovery procedure.

What are the risks and liabilities accounting firms should consider in selecting a DM solution?

Howard Brown, Doc.It: An accounting firm should ensure that the solution is aligned with the firmʼs business requirements. The firm must have complete “buy-in” at every level, or the project is doomed to fail. Without a good implementation and training plan, the rollout will be weak and could undermine staff confidence. Few DM products enforce document-naming conventions, which, in time, will make it difficult to find and identify documents.

Susan Parcells, BlackLine: Security and the integrity of the data should be the primary considerations. Firms looking for a web-based accounting tool should ensure that the vendor under consideration has completed the Statement on Standards for Attestation Engagements No. 16 (SSAE 16) report. These controls are paramount when dealing with sensitive financial data.

Another critical area for accounting firms is disaster recovery and business continuity. How does your solution address these?

Michael Alter, SurePayroll: With SurePayroll, all data is online and protected with password-protected access. We store all payroll data for our customers. If there is a natural disaster or loss of office equipment, we can provide all the data. This represents a significant cost savings. Many small business owners tell us that the peace of mind they have with paperless payroll is priceless.

Howard Brown, Doc.It: As is always the case with electronic data, a comprehensive and redundant backup strategy must be in place. However, in the event of a catastrophic failure or disaster, the Doc.It Archive can be put back online very quickly so that staff will at least have access to historic documents.

Susan Parcells, BlackLine: BlackLine has a disaster-recovery site in a different geographic location than the main site and employs near real-time replication of data.

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