Though the idea of controlling the flow of business processes and other work dates back to the construction of the pyramids, it was not until the 1980s that the modern concept of workflow management for companies began to coalesce.

For the accounting profession, the concept of the "paperless office" took root only in the 1990s. But this effort was loose and uncoordinated. Tax processes were digitized and automated, followed by the general ledger and some audit procedures. Finally, client relationship management made its debut. But the idea of tying all of these functions together into a single flow is a development of the 21st century.

"It has only been within the last year that vendors have really hit their stride and responded with better workflow tools," said Jim Bourke, director of firm technology at WithumSmith+Brown, and chairman of the Certified Information Technology Professional Committee at the American Institute of CPAs. "The initial products addressed tax returns, but there was little to address what we do the other nine months of the year. We needed tools that tracked the flow of all of our work, not just tax returns."

In part, the problem was that the forces behind office automation had not matured enough to build market demand for an integrated solution that encompassed all of the firm's processes and procedures.

"There are so many small-to-medium-sized firms that have not addressed all of their needs for workflow management, or have not implemented the solutions that are available to them," said Bourke. "Nearly all firms have gone digital, but many have not taken the next step to automate their workflow. They have automated every other aspect of their practice, but have yet to tie it all together into a single, automated, digital flow of the work cycle. They are not yet tracking and managing every step of the process, from the time a work product comes in the door until it leaves the firm."

Reaching that point, and embracing both the concept and reality of workflow management, is a three-step process:

* Understanding how work flows through the office, from the first client interview and engagement until the final product, or products, are delivered to the client - including an understanding of the critical deadlines and time considerations for each work process.

* Selecting the appropriate software for workflow management.

* Selecting the right hardware for workflow management.


Work flows through an accounting office, whether or not that flow is digitized, automated or formalized in a written structure. Automating workflow is less a process of replacing that flow than a method to eliminate waste, duplicated efforts and inefficiencies from the process that already exists.

"Workflow management is about saving time and reducing unnecessary effort," said Joe Manzelli, director of operations for the Fuoco Group in Hauppauge, N.Y. "It means we no longer have to sit around a conference table for hours or days with a client. We can gather the input, the work can be assigned immediately, and the staff can be at work on a client engagement before you are even back in the office. It requires that more of the work be done electronically, but has the advantage of reducing the time it takes to deliver the finished product."

How a firm will assess the workflow and convert that flow to an automated process will differ with each firm, but there are three basic rules:

* Adapt the process to the firm's existing workflow. Nothing is more disruptive to a firm than a sudden change in the way processes are handled. Granted, change may come about as the firm becomes more comfortable with the digital processes and electronic communication. But the initial effort should be to mirror existing workflow so that the process adapts to the firm, rather than the other way around.

The process of altering how work flows through the office is generally called "business process engineering," and it differs greatly from automating the existing business processes. If the business needs to re-engineer, workflow management systems are not the solution - and vice versa.

* Don't sacrifice human interactions. One of the most enduring criticisms of workflow automation - from the "efficiency studies" of the 1920s to today's sophisticated digital systems - is that they disrupt long-standing human relationships. Administrative people who used to handle tasks are displaced by technology. Partners communicate by e-mail, rather than in person. Clients are sent to a portal, rather than paid a personal visit. Workflow management does not require an end to these critical relationships, and should not interfere with them. Where technology disrupts human interactions, take care that alternate means of human contact - client meetings, staff meetings, personal lunches and team-building - are used to keep the interactions vital.

* Save time, not money. The two are, in fact, closely related. But if the focus of assessing workflow is simply to cut costs and corners, the result will likely be poorer service to clients and missed opportunities in customer relationship management. The goal should be to reduce waste and the time needed to turn tasks around - two goals that clients and professionals can agree upon and endorse.

Once the firm understands how work currently flows from the client to the staff and back to the client, it is time to address the software and hardware of workflow management.


"There are two philosophies that can guide selection of a digital, automated workflow solution," said Alan Osmolowski, partner-in-charge of the Tax Services Department for CCR, a New England-based CPA firm. "You can opt to go for the most integrated solution, or adopt the 'best of breed' application in each category of the practice. We were early adopters to workflow management, long before the integrated systems were available for accountants. So we began with office automation systems that were not made for accounting firms. We have since changed the software we use for document imaging and workflow management to one that is specifically designed for CPA firms."

"The initial product offerings were a good first step, but were really not on par with the options that are available now," he continued. "The first document imaging software we used had no real support for workflow management. I think many firms find they have a patchwork of applications that create 'islands of information' - disparate databases containing duplicate information about our clients. We can expect to see continued advances in integration among the various databases that exist in a typical CPA firm - such as time and billing, tax preparation, document imaging, customer resource management, workflow and paperless workpaper application databases that can all share data."

There is general agreement that for firms just adopting workflow management, an integrated solution - even one that is not "best of breed" in every category - may offer substantial benefits.

"Integration is something we believe in very strongly," said Manzelli of Fuoco Group. "We currently use XCM for their ability to manage recurring tasks. We can set up a recurring task once and get reminders when deadlines are looming. You don't need to waste time focusing on what needs to be done, and no time is wasted keeping lists. The software gives us reminders. It is also nice that we don't have to input client data multiple times."

While there are hundreds of workflow automation products on the market - and more than a dozen in the accounting profession - not all of them qualify as true workflow automation solutions. In fact, many vendors advertise "workflow" solutions even if they do not manage workflow.

"Assigning tasks and routing documents is not the same as workflow management," said CCR's Osmolowski, whose firm now uses GoFileRoom for their solution. "From a quality control perspective, it is important to have a seamless interface with the other accounting solutions in use by the firm. That means graphical workflow maps, role-based routing and reviews, and a strong system for handling exceptions."

Firms that were early adopters of workflow management stress the need for an integrated solution that shares information among multiple applications. They give high marks to Thomson and other vendors that provide a turnkey solution. And they are willing to sacrifice a few features to gain the integration that ties all of the work together.

"On any given day, I can track any job in terms of its progress," said Michael Freedman, partner at the Bethesda, Md.-based firm of Gelman, Rosenberg and Freedman. "Trial balances can be formatted and linked so that all of the numbers from the input sheets into the right areas on the trial balance report. We have a database of footnote disclosures to select from, so we do not have to recreate them with each trial balance. And we can leave a meeting with the client on an audit engagement and have draft financial statements to the client on the same day."

Still, there is room for improvement in the state of software solutions. Most accounting firms already using such systems note the need for a single database that all applications can draw upon.

"The next phase is to address the issue of disparate databases - the 'islands of information' with client data captured in multiple databases," said Osmolowski. "We are not there yet, but we hope the major vendors at the forefront of workflow automation will have that in the near future."

Manzelli agreed: "It will be nice when the products are integrated so that we don't have to input client data multiple times. The vendors have made great strides in this direction, the move toward a single database. When that happens, we will see a lot of movement toward adoption of workflow automation."

The final step in that adoption is one that is rarely considered important - until it presents problems. That is the selection of the appropriate hardware for workflow and office automation.


If there is one element of workflow management that is universally taken for granted, it is the hardware required to implement the process.

There are four pieces of hardware that are critical to the success of any workflow management system:

* The scanner, which is necessary to bring older paper files and supportive documentation into the virtual file cabinets for storage - and for instant review during the workflow process.

* The printer, which is necessary for those rare times when a document needs to be presented in physical form (as when presenting and discussing plans with a client). Today, this is most often a shared printer on a physical or wireless network.

* The data storage system, where the data is placed, indexed and housed until it is retrieved for use.

* The data security systems, which can encompass backup devices, physical security systems such as retinal and fingerprint scanners, and power scrubbers to keep from losing data to power spikes.

It's interesting that such hardware is virtually never bundled with the workflow management system. Vendors rarely provide recommendations for brands and models, and the hardware is most often not included in the proposed solution price or in lifetime cost evaluations.

Likewise, the hardware side of the workflow management system is often taken for granted by the firms that have pioneered this management philosophy. Still, it is a vital consideration worthy of attention.

When all is said and done, workflow automation may stand as the most important development in the accounting industry in the early 21st century. It requires work on the part of a firm and its partners, and some tough decisions in terms of software and hardware. But the payoffs for even a small accounting firm can be enormous.

"It started with the paperless office, and then automation of tax returns and the review process," said Freedman. "Today, paperless audits stand as the biggest innovation in workflow automation. Everything is online and accessible. We can collaborate with staff and with the client in real time, around the globe. Ultimately, it means better and more timely information both to the firm and to our clients. And at the heart, that's what good accounting is all about."

(c) 2009 Accounting Today and SourceMedia, Inc. All Rights Reserved.

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