Working Smarter with Document Management

This article series will explore the four steps of working smarter with document management at its best, including GATHER, PROCESS, STORE, and DELIVER. Gain valuable document management insight and learn from industry thought-leaders Gail Perry, CPA, author, and publisher at Sift Media US, and Alan Salmon, CEO of K2 Enterprises Canada.

Gather At Its Best

Effectively gathering and organizing electronic client documents as they flow into an accounting firm is just as critical as how they are processed, stored, and delivered back to clients. Due to the variety of ways clients deliver documents to their accountant, the task of effectively managing the inflow can create issues and hinder productivity before billable work begins.

Due to the variety of ways documents stream into an accounting firm, most firms create processes as work-arounds, which kills efficiency. A work-around is a temporary measure taken to handle a problem as it occurs without directly addressing or fixing the problem.

Whether client documents arrive as paper, an electronic file in a client Web portal, as an email attachment, by fax, voicemail, or by some other electronic means, automating and streamlining the process elevates efficiency. When document management (DM) “gather” is at its best, client documents are handled as they stream in, following the accounting firm’s best practices and filing methodology, without forcing work-arounds or creating pain points.

"Moving from paper to paperless requires a psychological shift from a tactile to a virtual environment. Beyond understanding the many benefits of electronic data processing, those coming from the paper world might require transitionary protocols including checklists and cheat sheets to give them the confidence that every step has been covered."

Ensure "Gather" At Its Best

Clients deliver documents using a variety of means and formats (i.e. hardcopy, scanned images, email and email attachments, spreadsheets, Word docs, PDF files, software files, etc.). For most accounting firms this variety forces unavoidable work-arounds that become accepted standard process, when they should not be. For example, when staff or an accountant has to search Outlook for a client email or an attachment, this is a common work-around that could be avoided if the “gather” step in DM was at its best when the email first streamed into the firm.

"When we discuss DM for inbound documents, we often focus on how those documents are handled by the accountant when they are received. Just as important is a well-defined system of delivery from the client. By establishing and explaining preferred methods of delivering documents and rewarding those clients who comply by giving them priority scheduling, accountants can begin streamlining DM before they ever receive the first client document."

To ensure “gather” is at its best, accountants should investigate how their firm is handling:

  • The collection of client documents as they stream in;
  • File naming and filing methodology; and
  • The location and organization of the electronic client documents repository.

The Collection of Client Documents

Whether client documents arrive all at once or piece-by-piece via email, voicemail, fax, voicemail, client Web portal or by paper, client documents must be collected and electronically filed during the “gather” phase. Automation and firm-wide consistency at this step creates efficiency throughout the entire engagement.
If documents are gathered and forced into a proprietary database, a firm may lose control by not having an exit strategy. This could impede a future merger or sale. In addition, long term storage of documents in its original format is costly. Licenses for the originating software will be required to open these files and may require the version of the program that the file was created with. Tax software is a good example of this situation.

Accountants should be concerned about managing Email -- it must be carefully managed due to the sensitive nature of the files being shared and for compliance with records retention policy.

Email, one of the most common yet difficult types of documents to manage, presents a host of difficulties for accounting firms. Issues surrounding email include version control, locating the most current version of an email string or an attachment, and email storage. When handling email with “gather” at its best, one should be able to click and drag an email into the engagement system where it remains organized and ready to be processed in an electronic client binder, by engagement type, organized by year. Each email attachment (i.e. Excel file, Word doc, etc.) should remain intact and attached to the email in its native format.

"In spite of safeguards, email transfer of sensitive documents is subject to risk from human error. Who hasn’t sent a message to the wrong person when the need for speed coupled with the auto-fill process pulled the wrong name from the directory of contacts?"

Client Web portals, fast becoming the preferred way to gather and exchange documents with clients, should be integrated into a DM system. An integrated client Web portal allows the accountant to easily click-and-drag client files which speeds processes. When a client Web portal is not integrated, pain is felt as additional steps are needed (work-arounds) to access client documents, which reduces productivity.

File Naming and Filing Methodology

As client documents stream into a firm the document must be named, saved, and filed in a secure electronic repository. Maintaining consistency in file naming and filing methodology challenges most firms. Inconsistencies cause pain by forcing staff and accountants to waste time searching for files to allow billable work to begin.

For accountants, firm-wide standardization in the gather phase leads to opportunity for greater profitability due to efficiency gains.

When “gather” is at its best, file naming and filing methodology pain can be avoided. As electronic client documents stream into the firm, it should be identified by document type, client, and year. Automated DM “gather” technology can recommend and assign proper naming protocol and a document-retention policy to a file, before
the document is correctly filed for a client.

Location and Organization of the Electronic Client Document Repository

File location, proper naming conventions and the organization of the client document repository impact how easy it is to locate files and get work done. The client document repository should be centrally located, allowing staff and accountants who share work on a client engagement to access the same documents files. The organization of files within the document repository should mimic a structure already familiar to staff. A centrally-located electronic client document repository organized as a folder-tree where client documents areorganized by client, year, and engagement type makes filing and locating client documents easy.

Pain is typically felt when the document repository is not centrally located, or when it serves as a silo where client documents are dumped. When silo-structures are used to store client documents, as files in the silo increase, time wasted searching for files also increases. Pain is eliminated when the document repository is centrally located, and well-organized. For example, within ten seconds and a few mouse-clicks staff or the accountant should have access to a specific tax file for Client XYZ. Any more effort or time would be inefficient.

As clients electronic files are gathered, accountants must be mindful of where and how the files are being stored. Serious consideration must be given to the firm’s responsibility of retention, especially when considering the future responsibilities and the impact on the firm should a client leave. There is risk associated with maintaining electronic documents past their time of required retention.

 


Gail Perry, CPA, author, publisher at Sift Media US, home of AccountingWEB.com and GoingConcern.com.

Alan Salmon is the CEO of K2 Enterprises Canada, a North American consulting firm providing technology training to accountants.

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