For Andrew Houston, CPA, a partner at the firm Williford, High and Co. CPAs, document management and operating in a paperless environment has become a "blessing." But it didn't happen overnight.

A little more than a decade ago, the Wilmington, N.C.-based firm implemented Thomson Reuters' FileCabinet CS document management system and hired a couple of summer interns to go through the tedious process of scanning in all of the firm's old paper documents.

Today, the firm, which processes roughly 1,000 tax returns a year, is operating in a paperless environment, scanning in upfront the source documents that it receives for individual returns.

However, for Houston and his co-workers, the learning process continues even to this day.

Houston is far from alone in his experience. In fact, many document management vendors and accounting professionals who are successfully using such products agree that the learning curve can be steeper and the journey longer than expected.


Accounting professionals are used to working with paper - lots of it - so there's no doubt that migrating to a paperless environment is a big cultural change. That's why one of the first steps in implementing a document management system is ensuring that there's buy-in at the partner level. If the top-level executives are not on board, it will be difficult to convey to the entire staff the importance of adhering to the new system.

"Make sure that you have executive buy-in from each department, as well as top management," advised Jonathan Holmes, IT director for Caturano and Co., a CPA, consulting and wealth management firm based in Boston. "They need to be sold on it so they understand it and can pass that on to the rest [of the firm]."

Holmes speaks from experience. About three-and-a-half years ago, the firm rolled out - basically overnight - the Interwoven document management system, which has since been acquired by Autonomy Corp. Holmes was not responsible for the rollout as, at that time, he was serving as IT infrastructure manager for the firm. "It was [implemented] in an IT vacuum before I was [IT director]," said Holmes. "When a product isn't aligned with the business needs, it's doomed to failure."

Consequently, the past few years have been largely spent ironing out kinks in the firm's document management system - which is a combination of Interwoven, CCH's ProSystem fx Engagement, and ProSystem fx Scan to turn source documents into bookmarked PDFs - so that it meets the needs of the 400 employees working in the various divisions of the firm. Caturano and Co. processes about 6,000 returns each tax season.

To avoid such complications, John Higgins, CPA, CITP, and strategic advisor for Rochester, Mich.-based CPA Crossings, which provides IT strategies for accounting, tax, legal and financial services professionals, suggested putting together a project team and not just making it an IT initiative.

The project team should have representatives from each group, such as audit, tax and any other specialized group within the firm, to ensure that their specific needs will be addressed with the document management system.


When selecting which document management system to implement, education and research is key. Checking out vendor sites and sitting in on Web demonstrations is worthwhile, but perhaps the best education is talking with other practitioners who have been through the process and learning from their successes or mistakes.

"The problem is you don't know what you don't know, so probably the best way is to visit other firms," Higgins suggested.

Doing the research will also help a firm better understand what it really means to be paperless, and the benefits. "If you have 100 CPAs in a room and ask them what is paperless, you will get 100 different answers," said Higgins.

Going paperless isn't only about getting rid of paper - the real value is getting all of the firm's documents into an electronic format so there's a central repository of information that can be accessed anywhere at anytime. Scanning in source documents and filing away the PDFs is undoubtedly part of document management, but in a true firmwide system, said Higgins, all of the files, such as e-mails and Excel sheets, are filed as well. "The document management system really replaces the Windows Explorer model," he explained.

Visiting other firms and networking at industry conferences can be great ways to learn about the various products available and to garner best practices from other preparers, as well as posting questions on online communities like Thomson Reuters' Accountant's Resource Network, or ARNE.

Once a system is selected, firms should also ask the vendor for advice and to share best practices.

According to Higgins, it's important to keep in mind that document management sys­tems tend to fall into two camps: accounting-centric sys­tems and horizontal solutions. Accounting-centric systems, such as ProSystem fx Document and FileCabinet CS, are developed for accounting firms and are more likely to integrate with popular accounting applications. Meanwhile, horizontal solutions are usually designed to work for many different industries and, as a result, tend to have a deeper set of functionality.

For Jon Enstad, vice president of the Coon Rapids, Minn.-based CPA firm Hubmer Enstad Ovik & Co., the integration of FileCabinet CS with the vendor's accounting software has helped make it a good fit. Enstad, whose firm handles about 850 individual tax returns and 120 corporate partner returns a year, said that the greatest benefit of a document management system is the ability to quickly pull up a client's file when they call.

"That is where we really see the time-savings - literally having it at your fingertips at any time," said Enstad, who noted that the system mirrors a physical filing cabinet in some ways, but it is likely that the firm is now saving even more documents than before.


Having a document management system that integrates with workflow automation tools and a portal is critical. Portal integration is important because once a preparer has all of a client's documents electronically filed, they need a way of getting that data, like a completed tax return, to the client, and a portal facilitates that. Having a portal will also drive traffic to a CPA firm's Web site.

In fact, this year FileCabinet CS is adding linkage between FileCabinet CS and portals, said Scott Fleszar, senior director of strategic marketing for FileCabinet CS. How it will work is when a client portal is created, it will automatically be updated with any of the client's scanned doc­uments. This enhancement will streamline the process of creating a portal for a client.

Other enhancements to FileCabinet CS include a floating annotation toolbar, so users can easily get to annotation options as they are working within FileCabinet CS, as well as enhanced source document processing. Documents in the system will be named and organized and the system will read the data (via Optical Content Recognition, or OCR) on those forms, so it can be transmitted into UltraTax CS.

"We are still in a phase where document management systems are maturing and dependent on integration," said Mark Ryburn, product manager for workflow solutions at CCH. "As we see integration increase, we will see adoption increase."

Ryburn said that CCH team members traveled the country last year talking with firms about what they wanted to see in a document management system. Based on the feedback, the latest version of ProSystem fx Document, to be released at the end of August, centers on enhanced usability. For example, the latest version enables users to arrange the screen and tailor the presentation to fit their needs, and it has enhanced search features, as well as offering additional integration with ProSystem fx Engagement.

Furthermore, CCH is looking to replace its ProSystem fx Document ASP, which stores documents on a secure ASP platform, with a new Software-as-a-Service offering.


Some firms have launched a document management system cold turkey, but several industry members, like George Strus, product manager for document management at Thomson Reuters, who handles GoFileRoom, suggested easing into the process and kicking off with a pilot before expanding, especially if it's a larger office with multiple sites.

Echoing that sentiment, Higgins of CPA Crossings recommended that accountants take about six returns from the prior tax season and do a "conference room pilot." This team can then train the rest of the staff on the process.

"I consider [document management] to be one of the four necessary applications CPA firms should have," said Strus, noting that the other three must-have applications are tax software, paperless audit, and time and billing or practice management. "[And] it needs to integrate with the accounting application."

There are more than 30,000 accounting professionals using GoFileRoom today, with about three fourths of the customers being ProSystem fx Tax users.

Strus said that the company has enhanced the workflow and expanded to other client services in the past few years. In an effort to save clients time, GoFileRoom now features two new desktop tools: QuickLaunch and Control Panel.

With the new QuickLaunch utility tool, customers can query GoFileRoom documents from other applications like those within Thomson Reuters' CS Professional Suite and Enterprise Suite, as well as competitor products. When working in a core application, users can search documents without having to launch GoFileRoom.

With the new Control Panel, users can, for example, set up profiles that minimize the need to manually index documents and make generic edits to any file type, such as QuickBooks files.

Furthermore, GoFileRoom extends beyond document management to offer a robust workflow solution, which includes portal technology so preparers can share documents with clients via a secure Web-based portal accessed directly from the Internet.

"A document management and workflow implementation can touch many processes of the firm. Leveraging the best practices and experience of the vendors' implementation/consulting team is critical," noted Strus. "They can advise when a pilot project is the right approach for the firm and how to get the most return on the firm's software investment."

Some industry members, including Intuit product manager John Catrett, recommend that users have dual monitors so they can view the source documents and tax documents. Preparers may even want to flip one of the monitors to portrait view, versus landscape, as it can be easier to view with less scrolling required.

Catrett said that much of his company's focus has been on bolstering usage of the Lacerte Tax Document Management System, versus jazzing up the system with more bells and whistles. In an effort to get more accountants using the system, last year it introduced a try-before-you-buy campaign that also included Webinar training.

"What we did in our training in the past year has been focused on baby steps," said Catrett. "Accountants don't know how or have time to get started in a paperless environment."


To simplify the process, Intuit broke it down into a three-year, three-step process and provided tips and advice on each step.

* Year 1: Start printing returns to the document management system.

* Year 2: Get into scanning in documents.

* Year 3: Begin storing everything, not just source documents, into the document management system.

Of course, firms can move at their own pace and can be up and running in a paperless environment in less than three years.

One add-on product recently introduced is the Intuit Document eSort to help simplify workflow. Powered by Copanion's tax document recognition technology, Document eSort is designed to expedite the time-consuming processes of scanning, identifying and organizing client tax documents. It offers integration with Lacerte, Lacerte DMS, ProSeries, and ProSeries DMS software.

Once a system is implemented, it's helpful to establish a uniform - and simple - way of labeling documents. Establishing guidelines will make it easier to retrieve documents.

As firms operating in a paperless environment have discovered, the data will take up a lot of space - and fast - so it is important to update the server and to have a good backup system. "It consumes a lot of space and we have to keep updating our servers," said FileCabinet CS user Houston. "In fact, we operate two servers because it is just a storage monster."

One of the enhancements Drake Software is looking to make to its Document Manager is the addition of a backup program so users can back up folders to a backup location, said Brian Stork, vice president of application development at Drake.

"I don't think people realize how much space they will take up when they start saving data," he said. "You really need a good backup system."

The vendor is also looking to add a universal folder to all existing folders, so that a user could, for example, add a write-up folder to all folders in one step, versus adding it one folder at a time, which would be quite time-consuming.

Last year, Drake worked to make the process of printing to PDFs and document management more seamless by using its own PDF engine, instead of a third party. This year, Drake is adding password protection so users can protect PDFs as they are printing.

Having data backed up in the event of a disaster is one benefit of utilizing a system like that of newcomer SmartVault, a Software-as-a-Service document management provider for Quick­Books that hit the market about a year ago. That's according to chief executive officer Eric Pulaski, who said that the company currently has about 1,000 users, of which roughly two thirds are tax and accounting professionals.

SmartVault, which is designed for professionals doing day-to-day accounting, transforms QuickBooks into a document management system, enabling accounting professionals to more easily organize every piece of paper and client correspondence, including documents, reports, e-mails, notes and even business-related photos. The documents are always available from within QuickBooks and can also be accessed anytime, anywhere over the Internet using a Web browser. Users can also set up a SmartVault Inbox to allow clients who don't use QuickBooks to upload documents for processing. Because it is Web-based, SmartVault requires no IT department, and clients who use QuickBooks can be up and running in about 15 minutes. The price starts at about $20 a month.


If there's one thing that has become clear, it is that there is no one way to go about selecting, implementing and using a doc­ument management system. But what is important to remember is that, regardless of the path a firm takes to get from those old, dusty file cabinets to a robust document management system, it must all begin with buy-in from the top, education and what CCH's Ryburn referred to as "TUT" - Train/Use/Train.

"As we've [implemented and used the system], we've found things and learned things. It has been a learning process for all of us," said Williford High's Houston. "As you get used to it, it's been a blessing in performance."

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

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