By L. Gary Boomer

The old 80-20 rule comes into play with regard to document management.  It is 20 percent technology and 80 percent culture.

Document management is high on the list of projects in most firms, regardless of size. This truly qualifies it as an accounting industry issue, but most firms experiencing similar problems with this technology, and many are directly related to their culture.

First, document management is more complicated than most CPAs realize. The term “paperless office” has been used frequently over the past few years and everyone seems to have a different definition, including the software vendors.

As firms delve into document management, they discover there are many issues, and often they realize that they may not have done enough planning. Ultimately, this technology impacts everyone in the firm.

Some firms choose to ignore the problems that are associated with the increased number of documents and papers, while the majority try to address the problem. A firm manager recently told me that his practice averages four reams of paper per full-time equivalent per month. This statistic alone demonstrates the increased generation of paper and documents within the profession and the need to address the issue of document management.

The primary reasons that firms are moving toward document management are:

● The exponential growth of documents;

● The desire to rapidly locate documents internally or from a remote location;

● The need to reduce the time spent handling paper and redundant documents;

● The desire to improve client service; and,

● The search for efficiency and cost reduction.

In addition to these benefits, firms discover that digital documents are easier to control and share when collaboration is required.

The primary mistake that most firms make is they don’t have a document management strategy and understanding of expectations going into the project. Even if they do have a strategy, often a limited number of people understand the strategy and have bought into the process. This, coupled with the need for standards, policies and procedures along with a project manager and champion, has created issues in many firms.

Let’s first look at expectations by addressing some important questions.

1. Do you want to manage static documents (those in your file cabinets)?

2. Do you want to manage dynamic documents (those in your briefcase)?

3. Do you have a standard filing system for digital documents?

4. Does your system comply with required document retention policies?

5. Is everyone adhering to the standards?

6. Do you have someone in charge with responsibility and authority to discipline those who do not adhere to the system?

7. Do you plan on training and supporting your end-users?

Most firms want to store both static and dynamic documents. This requirement, coupled with the different requirements associated with tax, accounting and auditing, and administration, creates interesting problems.

The management of dynamic documents requires the capability to control versions and manage the checking in and out of documents. Both static and dynamic documents require security. Generally, the higher the level of required security, the more complex the system is for the end-user.

Another issue to consider is whether you want a “client-centric” system or an “application-centric” system. The most popular work paper applications are Caseware International’s CaseWare, ProSystem fx Engagement from CCH Inc., and Engagement Solution from Creative Solutions Inc., a Thomson business.

But this is not enough, according to the firms that are the most advanced in this area. They need a system for tax and administrative documents, as well - which becomes complicated as one size does not fit all.

As an example, some firms have an Internet strategy where they want to post client documents to a Web site in programs also known as “private client sites.” This requires hosting, as well as an increased level of security.

Location of the files and accessibility is another issue.  Many multiple-office firms want to be able to access files via the Internet. This requires a portal with version control, and check-in and checkout capabilities, and it must be scalable.

As you can see, things get complicated quickly. Therefore, I recommend that you:

1. Name a leader and task force to manage the project for the entire firm.

2. Define your requirements and prioritize them in writing.

3. Inventory your current software applications and identify the included document management capabilities.

4. Complete a cost-benefits analysis.

5. Create a written project plan and budget.

6. Develop a reasonable time line, insisting that accomplishments are made quickly and communicated to the entire firm.

7. Develop and implement standards, policies and procedures.

8. Train personnel to those standards, policies and procedures.

9. Provide end-user support.

10. Review the plan frequently and update it accordingly.

The good news is that, while firms have encountered problems, they do not want to regress and move back to a world of uncontrolled documents. This brings up the old saying: “Where there is pain, there is gain.”

At best, the first year will be a break-even one. The return comes in subsequent years as end-users are trained and your workflow systems are improved.

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