It has failed to materialize so often that the "paperless office" achieved the kind of stature usually reserved for the Lost City of El Dorado or the Holy Grail. Yet in the last two years, a quiet revolution has taken place in the field of document management and the accounting industry is beginning to see the emergence of world-class applications. None of the major solutions is there yet. But there are enough development programs underway and enough new features moving into release versions to determine five major elements that will shape the future of this market:

NON-PROPRIETARY, OPEN SYSTEMS. Already, nearly all of the packages feature PDF and Microsoft Office as their native file formats for storage. But many of the top-shelf applications need to break their ties to a single tax program or single accounting suite. The top products of the future will integrate easily with every application that creates a file or generates a piece of paper.

BETTER INPUT TECHNOLOGIES. Once relegated to merely scanning paper documents and spitting out a .PDF facsimile, emerging technologies in forms recognition create forms that can be more easily indexed, searched, and archived. Meanwhile, OCR technologies are opening new vistas in scanning and indexing hand-written notes and forms.

A SHIFT FROM CLIENT/SERVER TO ASP WEB-BASED SOLUTIONS. An ASP solution can more quickly integrate improvements, offers better security for accounting firms below the enterprise level, and better options both for 24/7 access by professionals and collaboration with clients.

BETTER SUPPORT FOR ACCOUNTING OPERATIONS. Only recently has document management been tied to such integral and specific actions such as audit engagements, tax engagements, workflow management, and work-in-process binders. The trend will be to continue this accounting-centric development, so that document management takes on the elements of a vertical, industry-specific market.

FEWER VENDOR OPTIONS. There are, by last count, nearly 15 vendors of document management solutions for accounting firms. For the next year or two, rapidly expanding features and innovation will create a chasm between the best and least of these products, at the same time growing simplicity will drive prices down. The bottom line is that the lower-tier services will evolve or die, and the market will be ruled by two or three of the best vendors.

For 2007, we examined nine of the packages ranging from small and economical to enterprise-level solutions. While none does everything, a few come very close to emerging as best-of-breed applications.

Acct1st

Acct1st, a document management, workflow, and archiving solution, stresses flexibility to meet the diverse needs of different accounting firms. It files documents in their native language, uses no proprietary software or services, works with a wide range of accounting and business applications, and can function as either an internal or hosted service.

The hosted service can also function well as an internal intranet Web service or via outsourced hosting at a Level IV secure facility operated by AdHost.Com.

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