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Mark Robinson

A Case Study in Going Paperless for Tax Season — Systematic Accounting, Inc.

Learn how Systematic Accounting achieved great results with a new workflow that includes scanning tax documents before preparation and a software solution that automatically organizes and indexes tax documents.

December 13 , 2007
Sponsored by Copanion, Inc.
by Mark Robinson, CPA

This case study describes how I changed the workflow at my firm last tax season and used a solution to automatically organize and index tax documents before preparation. The end result was that it saved us time during tax season and kept us more organized.

I’ve been a practicing CPA for 25 years and formed Systematic Accounting in 2003 with my business partner. We have an administrative assistant, two bookkeepers and some seasonal tax help. We’re located in Plaistow, NH and serve local businesses and families. We offer bookkeeping, payroll services, tax preparation and tax planning. For many of my customers, we provide full bookkeeping services and essentially become their accounting department. We do approximately 200 returns every year. And during tax season, we try to keep the regular bookkeeping and accounting customers happy while preparing all the 1040s.

My Old Way of Doing Taxes

I’ve always done 1040s the way I was taught back in the 80s. My clients would come in with their tax documents. I’d take the documents, copy them and then pound in all the information from the forms. I would prepare my workpapers and questions, print a copy of the return, review it and call my client to discuss their return. Then I would print and send the final return. I would have boxes of paper on the floor and like everybody we measured how busy we were by how many boxes there were. What I found was that organizing and inputting the data was taking almost 50 percent of the overall time to prepare a return.

How a Cartoon Changed My Workflow

When we formed Systematic Accounting in 2003, we started thinking about ways that we could apply technology to accounting. One day, I saw this cartoon. In it, there’s a person with a shoebox and he’s pouring papers into the top of a computer and out of the bottom comes a tax return. I said to my partner, “Now that’s something that would be really useful if we could do it.” And he said, “Let’s see what we can do.”

We found some partners and investors to help develop this idea and it turned into a software solution that automatically organizes and indexes scanned tax documents making it faster and easier to input data.

Going Paperless

In 2006, we changed the tax workflow and went paperless by scanning tax documents up-front. I still meet with my clients and collect their tax documents. I give these to my administrative assistant and she scans them all in. One of the best things is that we retain all of the original documents digitally in a shared folder on our office network. If anyone needs to see something, we can easily find it at any time.

After all of a client’s tax documents are scanned, they are automatically organized and bookmarked in a single PDF file. That file goes to my seasonal preparer and she inputs the data and prepares the return for my review. We find that inputting goes faster because my preparer can focus on one file and use the bookmarks to quickly find information without having to organize all the information.

Reviewing is also faster and easier. It’s easy because I have two monitors sitting on my desk. The organized, indexed file of tax documents comes up on one monitor and the return is on the other. Since the tax documents are in a PDF file, I can easily add tick marks and notes to create workpapers. The only papers that I retain are the signed engagement letters and signed e-forms. And at the end of tax season, they all fit neatly into one file-cabinet drawer.

Automatically Organizing and Indexing Tax Documents

Automatically organizing and indexing scanned tax documents is an important part of this paperless workflow. We developed a software solution that made data entry faster and easier. We can scan documents in any order. The software recognizes the scanned tax documents, organizes them in a consistent manner, bookmarks them, and consolidates them all in a single PDF file. This made it faster and easier to input tax data and review returns because we could quickly find any information that we needed.

The Bottom Line: Going Paperless Saves Me Time

The bottom line is that it saved me time when I used this paperless approach. The tax documents were all in organized, easily accessible PDF files in a shared folder on the network that everyone in my office could easily find. I wasn’t standing in front of a copier making copies of my clients’ documents. I wasn’t running around looking for paper documents or files because they were right where they should be. Inputting data went faster. The review process became quicker because everything was right there on my desktop monitors and organized the same way for every client. Scanning tax documents up-front before preparation worked very well for me. It saved us time and kept us more organized during tax season.

For more information, visit Copanion.

Mark Robinson is a CPA with 25 years’ experience in the complexities of tax forms. He is president of Systematic Accounting. He is also a founder of Copanion, Inc. Copanion is a leading innovator in tax document automation. The company saves tax professionals hundreds of hours during tax season with accurate and secure web-based applications for automating client tax document organization, data entry and review. To learn more, please visit Copanion.com.