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Best Practices for a Document Management Strategy

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Sep 8th 2016
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Paperless document strategies are more of a culture than a strategy; you can put all of the technology in place, but if you still “have to have” paper, you may not wind up as paperless as you planned. So, what does it take to really do digital documents right?

If you are looking at a transaction without the supporting documentation or “paperwork,” how can you tell what’s going on? If you simply store documents in a file folder structure, even with smart naming conventions, you may not be as paperless as you think.

If you have different document storage systems, including file cabinets, a Document Management System (DMS), a portal, some off-site storage, and a backup in the cloud, you may not be as paperless as you think. If you recall the classic Bugs Bunny cartoons, I’m reminded of Bugs’ phrase, while munching a carrot: “Ehh, what’s up, Doc?”

What Needs Are You Trying to Satisfy?

First, there is no one right way to implement any technology. It’s preferable to align your business strategy and tactics with your technology strategy and tactics, which should lead to your paperless and accounting tactics. However, if someone says, “This is the one (or only) way,” don’t buy it.

There are many right ways to implement paperless, but the best digital documents strategy looks at your business or your client’s business holistically. What are the needs that you are trying to satisfy?

What Are Your Pain Points?

Normally, there are several pain points related to paperless digital document management. Let’s see if some of these ring true with you:

  1. Quick retrieval of any document.
  2. Can’t find critical documents when they are needed.
  3. Documents that serve as records of evidentiary value, such as an invoice to prove that software was purchased or that a hardware product has a lifetime warranty that can be honored and repaired or replaced can be readily retrieved.
  4. Documents related to a single engagement or project can be handled conveniently as a group.
  5. Appropriate security measures can be applied to allow or prevent access to records. Examples here could be payroll or personnel records, documents needed for litigation, or other records of a permanent nature.
  6. Supporting documentation including purchase orders, engagement letters, executed statement of work, contracts, or other legally binding documentation that may become records of a permanent nature are readily accessible.
  7. Marketing and promotional material that may include descriptions of products or services, programs and events, and other client-facing materials are readily available and versions are controlled.
  8. Internal documents that may contain proprietary or confidential data, including formulas, product specifications, and competitive analysis. These documents typically are for internal use only and need to be controlled so they do not fall into competitors’ or customers’ hands.
  9. Financial and operational reporting, much of which is produced on a recurring basis.
  10. Legal and governmental documentation that could include tax returns, lawsuits, articles of incorporation, minutes, audits, bank loans, and other documentation critical to business operations.

Note that we could have named more transactional items like bank statements, expenses, invoices, quotes, orders, and similar business documentation or documents that describe the processes of a business – or, in a word, documentation.

Recent Developments in Paperless Systems

While paperless systems have been around for 20-plus years in small business, developers have continued to evolve the capabilities and thinking behind the systems. Recent developments include the use of cell phone cameras to capture images, and performing optical character recognition (OCR) on the images and storing these images with the transaction, such as is frequently done in expense tracking products like: Concur, Expensify, Nexonia, Tallie, Zoho Expense, and a host of other examples.

Another development is the use of portals to retrieve and deliver documents. Links can be sent to clients or customers requesting or delivering information. This eliminates sending documents of any size via email. Examples of portals and information gathering tools include:

  • FileThis
  • Hubdoc
  • ShareFile
  • SmartVault
  • Doc.IT Portal
  • Office Tools
  • AccountantsWorld Cloud Cabinet
  • LeapFile

Accounting products have also definitely gotten into the paperless digital document act lately with Accounting Power, QuickBooks Online, Xero, and Zoho – as well as with mid-market products such as Financial Force, Intacct, and NetSuite that add a feature to attach documents at the transaction level. And, of course, QuickBooks Desktop was extended with a variety of products that wrapped this popular small business solution with some level of document control.

Examples here include popular choices such as:

  • Bill.com
  • SmartVault
  • SourceLink
  • Cabinet (was Cabinet NG) DocuXplorer
  • e2B
  • FormCliq
  • PaperSave
  • QBGarage
  • SpringAhead

From Simple to Sophisticated

The traditional model of storing documents is still commonly used, as it should be. If you consider simple to complex ways to store documents, you wind up with the “levels” of paperless systems. You can do-it-yourself (DIY) by creating folders and using smart naming at the operating system level on your Windows, MacOS, or Linux computer. You can step up your game with Document Management Systems, Document Storage Solutions (DSS), and Enterprise Content Management systems.

What’s the next step up from DIY? You can choose a little more sophistication with simple file cabinet systems. These applications usually assist with file and folder naming, integration to applications, and a few other productivity benefits.

Sometimes these file cabinet systems are called Document Storage Solutions. DSS typically have a more focused set of features and functions, which are often targeted to a specific niche such as direct integration with a particular tax prep package, integration with QuickBooks, or providing a secure file sharing solution. These applications are generally designed to index data in a single (or small number) of ways, and may have a fixed organizational hierarchy.

Although a few of these products have been named earlier in other contexts, the following products are examples of DSS:

  • AccountantsWorld Cloud Cabinet
  • Drake Document Manager
  • Lacerte/ProSeries DMS
  • OfficeTools
  • Personable Workflow DMS
  • ShareFile (although indexing is limited)
  • SmartVault
  • ThomsonReuters FileCabinet CS

The next level of sophistication in paperless systems is Document Management Systems (DMS). DMS are designed as comprehensive business solutions for automating the capture, storage and dissemination of all electronic documents and files in an organization.

DMS applications typically, but not always, have the ability to connect with products from multiple vendors and multiple index fields so that a single document can be simultaneously filed more than one way. The application of automatic naming, records retention, and other features are included and automated.

Examples of products in this category include:

  • Cabinet SAFE Cloud
  • CCH ProSystem fx Document
  • IT DM
  • DocLink
  • eFileCabinet
  • Fortis
  • iChannel
  • Laserfiche
  • NetDocuments
  • Treeno
  • Thomson Reuters GoFileRoom
  • Worldox

Finally, the highest level of system is known as Enterprise Content Management (ECM). ECM is a formalized means of organizing and storing an organization’s documents, and other content, that relate to the organization’s processes. The term encompasses strategies, methods, and tools used throughout the lifecycle of the content.

ECM systems perform everything that a DSS or DMS can do, plus other features like scheduled publishing of content, much like a web-site content editor such as WordPress or Joomla can do, providing security control of documents, publishing and recall of documents or document control, and these systems almost universally have a workflow component available or included.

Additional technologies like recognition technologies, forms processing, COLD, aggregation, collaboration, records management, and library services are all common. While ECM are rarely used in the small and medium sized business market, if the conditions are right, some organizations may have to step up from a DMS to an ECM.

Examples include:

  • Alfresco
  • Autonomy Document Process Automation
  • ECM (was ImageNow)
  • EMC Documentum
  • OnBase
  • OpenText

Although not a comprehensive list, http://www.totallypaperless.com/solutions contains a few more examples not named in this article of the 300 or so products sold into the United States market.

Challenge: Large Number – and Range – of Products

So far in this article I have been trying to expose you to the capabilities and levels of products that you can choose from. Hopefully what you are beginning to see is that there are dozens, if not hundreds, of solutions. And these come at all levels of sophistication, just as is true of accounting software products.

Unlike accounting, however, there are not really that many dominant players. For example, most of you could simply answer the question: What are three entry-level accounting products? (QuickBooks, Xero, Zoho, Sage 50, etc.). Likewise, even though you may never have seen them, you could probably answer the question: what are the top two ERP products? (SAP and Oracle). You can probably even name a few mid-market accounting software products (Sage 300, Dynamics GP, Open Systems TRAVERSE, Epicor, Infor, etc.).

But how many of you could do the same thing for paperless, DSS, DMS, and ECM before reading this article? The paperless market may be 10 to 20 years behind the accounting market, and the products continue to evolve rapidly as they try to meet a business need.

This is where your challenge comes in. What does your business, or your clients’ businesses, need for document automation? Consider the list of business needs at the start of this article:

  • What are you trying accomplish?
  • How large and complex is the business?
  • How much integration and automation is needed and desired?

Carefully considering these questions will get you started on picking the right level of product. However, just as with choosing accounting software, a more comprehensive system will do more for you. You can choose a point solution like Bill.com to solve a specific problem like cash management, including bill payments. This type of solution may still be required when you have a more sophisticated DSS, DMS, or ECM supported with workflow, a portal, OCR, and other technologies.

Final Thoughts

The selection and implementation of a paperless system is a learned skill set just like implementing accounting software. Do you need to hire a professional to implement your paperless system or do you want to learn enough to add document management to your skill set?

I chose to add paperless skills to my knowledge and it made all the difference in understanding the complete flow of a business system. Do you need to add another tool to your kit? Do you have a firm grasp of the documents that support your practice?

Note: Document Management Systems and Document Storage Systems change frequently. The capabilities you or your clients need can vary widely. Record retention policies are needed and should be followed, but smaller businesses rarely have these in place. You should consider how and what you want to keep as your paperless or digital documents.

Randy Johnston is a well-known technology expert, consultant, trainer and speaker. He will be speaking at the upcoming Accountex USA 2016 event, Nov. 15-18 in Las Vegas. The original post appeared on the Sleeter Group blog. AccountingWEB and Accountex have partnered to bring you this content as we share a belief in the furtherment of the profession through greater insights.

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By eebaker
Sep 9th 2016 17:09

Very important points made by Randy Johnston. Without a plan and some policies and procedures, it is destined to not reach its full potential. The plan and policies also need to be shared with everyone and enforced. Mr. Johnston is trying to save us from a bad or less than successful experience. I suspect he has witnessed a few of these that have not went so well.

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By Durgesh
Mar 28th 2017 12:50

Hi Randy,

Thanks for sharing great information. I think customise NetSuite have all the features which you describe above. If you any one looking for cost effective NetSuite customisation services then click here https://www.suitestation.com/services/netsuite-customization.html

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