The Paperless CPA... Or close to it
Firms that want to go paperless should start with a cost-benefit analysis to see if they are really ready for digital storage, researching different solutions before making a full commitment. After all, no two offices are identical, and the transition has to make sense for your firm and your staff.
What You'll Need in Terms of Technology
Tech guru for the U.S. Chamber of Commerce, Ricardo Harvin says that switching to digital is fairly easy and inexpensive, but you'll need a few things.Plenty of hard drive space if you plan to store records digitally.
Harvin recommends that, unless only one person will have access to the stored files, you should have a separate server, with a high-quality electronic archival and backup process.
Strict policies regarding access and security.
At least one scanner, which will probably come with an electronic filing system. If it doesn't have a document management system, you may want to develop one of your own.
For accountants and auditors doing field work, high speed portable scanners allow them to capture documents and send them back to the office electronically.
If you really want to eliminate paper, having fax capability from each computer is helpful. Otherwise, if you share fax machines, you still have to print first, fax from a central location, then either file or shred the document. If you do a lot of faxing, you'll save time, paper, and ink by making your next computer upgrade fax-capable.
Most of the paper you use probably falls into one of three categories:
1)Filing you do for government agencies
2) your firm's copies of reports, returns, and statements
3) client copies.
Most government agencies encourage e-filing as advantageous to all parties. The firm of Lewis & Knopf, in Flint, Michigan takes every opportunity to e-file, says principal, Stephen Kidd, unless the client objects or, for some reason, an e-filing is rejected. That way, the firm not only saves paper, but also the time required to print and assemble, and the cost of delivery.
At Lewis & Knopf, all of their own copies are digital. Generally, this involves using a folder structure similar to a paper file, and a bar code system that directs documents into one section of the folder, while working papers and supporting documents are sent into a second section. Another option is to convert tax returns into PDF files. Some tax prep software allows for automatic PDF conversion. If your software doesn't, the same result can be accomplished using a document management system.
More and more, CPA firms are getting away from those thick client copies. Some burn PDF files onto CDs that their clients can pop in and click on one link to read the return or financial statement, and click on another link to view the supporting documents. Not only does this save paper and ink, but it is easier storage for your client and makes it harder for prying eyes to read. While you are creating CDs, don't miss the marketing opportunity available. You've got the client's attention so you can at least include your firm's logo, or you can take it to the next level and include a brief welcome message from the managing partner or some other key person in your firm.
Some CPAs deliver copies by creating secure clients portals on their Web sites. Once a return is complete, it can be put in the portal and the link e-mailed to the taxpayer with instructions for logging into a secure page. Clients can print their returns if they choose, or they can easily e-mail the return to a third party as needed. This is the same type of security provided by Secure Socket Layer (SSL) used by merchants who need to protect credit card transactions, and much more secure than simply sending a large file via the Internet.
All of the above methods work well in the pursuit of saving paper and ink, preparation time, and delivery cost. Some firms, like Lewis & Knopf, use them all, depending on the client and the project. Still… it's probably not realistic to expect to be 100 percent paperless, especially at tax time. After all, there will always be taxpayers who don't feel they've been well served unless you deliver a good old-fashioned paper copy.