by Carly Lombardo
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After years of amassing a tremendous amount of paperwork in support of its tax and audit services, the 70-year-old, mid-sized firm Reminick, Aarons and Company was rapidly running out of file room space.
"We wanted to transform the file room into a non-paper environment to minimize the possibility of losing files and to ensure quick access to client information," says partner Joel Podgor. "Plus, we wanted to minimize the storage space required to maintain our documents. Electronic files are more practical and cost-effective. Storage space is expensive."
The New York, N.Y.-based firm needed to capture and organize information from numerous sources including word processing documents, spreadsheet data, and documents generated from Reminick’s tax and audit programs.
With a staff of more than 65, professionals were spending too much time reviewing and routing paper-based files and looking for misplaced documents. To streamline efforts, Reminick wanted to collect, manage, and deliver this information more efficiently and be able to access the documents remotely through Citrix.
With the assistance of document management software specialist, Immediatech, and under the watchful eye of managing partner Lily Hui, Reminick’s file room has diminished by 25 percent and professionals have been efficiently working from the field.
Similarly, Charles Tzinberg, a Glen Carbon, Ill.-based CPA, hasn’t kept a paper copy of an income tax return since 1998. He uses the File Cabinet Solution from Dexter, Mich.-based Creative Solutions.
"We haven’t purchased file cabinets in several years, and anticipate never purchasing one again. Document management provides us with tremendous space savings and we plan on removing the files from our copy/file room this summer, opening up the space for other uses," says Tzinberg.
In Hernando, Miss., CPA firm Williams Pitts & Beard has moved more than 7 million paper documents into Computhink’s ViewWise system, which now manages more than 98 percent of its previous paper files. Dan Williams, managing partner, says, "By using the document management system, we increased productivity this tax season by 20 percent. We have not saved any paper in the last six monthsÑthat means no tax returns, financial statements, or audits."
The paperless office may not be here. But firms are making headway in reducing volume and managing documents.
"The word paperless has been a buzz word for the past three years. In many cases, it has been laughed at, but it is a huge initiative, not to save trees, but to make people more efficient," says Bret Wier, director of business development for ProSystem fx Engagement (formerly ePaceEngagement).
"I’ve seen document management spread considerably," agrees L. Gary Boomer, president of Manhattan, Kan.-based Boomer Consulting, which provides practice management advice to accounting firms. "I see firms who have good processes and procedures having the most success. It is a poor excuse to say you don’t have enough disciplineÑeverybody should be doing it."
Bursting at the Seams
Reminick found the key was to implement a system that mimicked paper files as closely as possible, while offering the benefits of electronic management.
The company chose a system from Immediatech, an Englewood Cliffs, N.J.-based vendor. But Immediatech didn’t just sell a hardware and software package, it assessed the firm’s needs.
"It is important when developing a system for a firm to look at their current work processes as they relate to paper, electronic documents, e-mail, faxes, and all other content coming into the firm," says Joe Harpaz, Immediatech’s chief technology officer and co-founder.
The vendor reviews how the accounting firm created and managed documents, both those generated internally from the firm’s tax, audit, and accounting software applications, and those submitted by clients. From there, Immediatech developed a working model that allowed Reminick to test the system and give feedback while the system was being developed.
The system utilizes OTG Software’s document management package ApplicationXtender. Immediatech designed and implemented the document management system to provide immediate access to a central pool of Reminick’s client information through a universal interface. Kofax Ascent Capture Software was incorporated for scanning. Now, all documents generated by Reminick or submitted by a client are immediately saved in the document management program and are centrally organized by client name.
Reminick invested more than $100,000 in the document management system. The firm expects a one-year payback. It expects even greater savings through efficient operations.
"We are not putting any new files in the file room. In a few years, we will continue to grow, but not need any more file rooms or outside storage space. It will save us thousands a month," says Podgor.
Although, saving file space is the obvious advantage, Reminick has found staffers also benefit from the ability to access files simultaneously and to work directly from the field. Reminick has 30 people in the office using the system, 20 of them with laptop computers. Currently, the firm has three lightweight Fujitsu scanners for the field that cost approximately $850 each. Scanners in the field reduce the amount of paper brought back to the office.
"Client information is being scanned onsite, which saves time from bringing documents back to the office and having to index them and then have a clerk scan them," says Podgor. "Since they are scanned already, the staff has a chance to look at the document and make sure it’s scanned correctly."
In addition to the lightweight scanners, Reminick has 15 Visioneer Strobe Pro scanners in the office which cost $200 each.
The final element in Reminick’s system is the laptop version, which lets accountants replicate a copy of a client’s electronic engagement folder into a portable computer. A complete set of documents is made available to the accountants on the laptops, allowing them to work at a client site or from home without connection to the Internet or to Reminick’s office. "The accountant can edit or create new documents, as well as scan paperwork into the laptop. The remote staff has complete access to files and can add, change, and scan new documents into the client folder," says Podgor.
| Putting Paper in Its Place|
Karl Buttner, president and CEO of 170 Systems, a document management and imaging company, is touting the concept of a "paper-like" office where digital documents preserve the original look and feel of paper.
He says, "Eliminating paper is a futile effort. Corporate America’s infatuation with paper, symbolized by bulging file cabinets and printer overloads, shows that paper is still how people think. It also continues to be the main medium in which most business documents are introduced in the enterprise. The issue is not to fight paper, but to use it efficiently, and integrate it into e-business processes and workflow."
To address the $25 billion a year problem companies face filing, storing, and retrieving paper documents, many are embracing the concept of a "paper-like" office, where hybrid digital documents preserve the original look and feel of physical paper, while enjoying the added benefits of accessibility and control. Buttner feels the following points are essential building blocks for realizing the "paper-like" office:
100% ONLINE: Paper has its function, which is commonly misused, in the workplace. Important business documents often take up residence on a desk or are misfiled, leading to bottlenecks in key processes and costing companies valuable time and money. To fully benefit from the data locked in documents like invoices, purchase orders, and expense reports, paper should be viewed as a static and temporary holding mechanism for information. For advanced functions like distributing and retrieving data, paper must be captured and brought online in a central repository.
INTEGRATION: It’s not enough to get paper digitized and online. To effectively manage enterprise data and uphold its integrity, organizations need to integrate their various silos of information. For instance, when reviewing expense reports, Accounts Payable departments can access receipts and other support materials to determine their validity.
INTERACTION: A digital document, such as an invoice, has to behave like a piece of paper. The visual similarity is important, but interaction is the keyÑthe ability to mark it, stamp it, highlight it, and approve it for further action.
AUTOMATION: With thousands of business documents entering organizations every day, companies need to focus on eliminating manual steps in their processes and reducing the cycle time for transactions. For instance, an invoice "knows" who has permission to approve it, so the action of stamping the document automatically moves it off the user’s desk and triggers the payment process.
Eliminating paper has always been a challenge for CPAs. Tax returns alone create enormous amounts of paper, and as electronic filing becomes more popular, more and more firms are thinking about managing these documents. As a result, major tax software vendors such as Micro Vision, CCH, and Creative Solutions are jumping on the paperless bandwagon.
The surge in electronic filing has also rekindled interest in the paperless office, says Larry Zuckerman vice president of Micro Vision Software, a Hauppauge, N.Y.-based tax software company.