Whether you call it going paperless, adopting a digital office, following a digital practice model or implementing a document management (DM), enterprise content management (ECM) or knowledge management (KM) system, the Paperless Age has arrived for more and more CPAs and corporate finance professionals.

Regardless of whether you work in a small local firm or large public company, the productivity advantages of a paperless work environment are vast. But before jumping onboard the paperless wave, you want to make sure you do the conversion the right way the first time, with the right solution provider along to help you from Day One.

To help you understand both the challenges and rewarding opportunities of going paperless, CPA Insider™ invited the following thought influencers (listed alphabetically) — Dr. Chandra Bhansali, President, AccountantsWorld; James C. Bourke, CPA, CITP, Partner, WithumSmith+Brown; Bob Dias, vice president of product and segment management, CCH; Scott Francis, Director of Product Management, Imaging Products Group, Fujitsu Computer Products of America, Inc.; Randolph P. Johnston, Executive Vice President, K2 Enterprises; Roman H. Kepczyk, CPA, CITP, President, InfoTech Partners North America, Inc.; Rene Lacerte, CEO & Founder, Bill.com; and Dave Packer, Director of Professional Services Industry Solutions, Interwoven — to share their insights on this hot button topic.

Gentlemen, why is now such an important time for CPAs to be considering paperless office and workflow solutions?

Dave Packer (Interwoven): Firms are facing many challenges today, including more stringent regulation, earning and retaining clients, mergers and acquisitions, an explosion of content such as e-mail, increased competition and attracting talented professionals. Paperless solutions can help firms address all of these challenges. Technology has evolved significantly, so it is now proven and affordable for firms of all sizes.

James Bourke (WithumSmith+Brown): Why now? It just makes sense. Technology drives every aspect of what we do in our profession today. Our staffs are mobile. They need access files and source documents 24/7, anywhere-anytime. The only way to make the process more efficient is to convert the “old” paper process to digital and to store files and documents in a way that allows for easy access.

Chandra Bhansali (AccountantsWorld): Paperless office systems are clearly playing an important role in CPA practices. A client engagement starts with source data, which may be on a document or digital form that the client provides; and it culminates with finished documents that the CPA provides, whether they are tax returns, financials or something else. The exchange of documents and data between client and CPA is a crucial aspect of any client engagement. Only now have Web-based solutions made it possible for clients and accountants to exchange and share documents and data digitally. This powerful capability reduces overhead, raises productivity and enhances client services.

Roman Kepczyk (InfoTech Partners North America, Inc.): Considering “less paper” solutions is critical today as firms spend a significant amount of time looking for misplaced documents and tracking the status of returns. Today’s document management solutions integrate these processes so your staff can go to one place to know the status of any project and to have direct access to the documents supporting that project.

Rene Lacerte (Bill.com): I agree. The technology advances made in the last few years are enabling new, more efficient models for collaboration between CPAs and their clients. Paperless/workflow solutions create significantly more controls for companies at a fraction of what it used to cost. CPAs who are recommending paperless solutions will grow their practice and increase their profits.

Scott Francis (Fujitsu Computer Products of America, Inc.): Efficiency is the key to an organization’s productivity. Simply put, time is money and business professionals need to explore innovative ways of streamlining their processes to improve overall efficiencies within their organizations. By implementing an electronic document management system organizations can begin to tackle their operational processes and achieve increased productivity, better customer service and reduced operating expenses by eliminating the need for physical storage of documents onsite or offsite.

Bob Dias (CCH): The demand for accounting professionals is outstripping supply and is likely to worsen as baby boomers retire. Meanwhile, professionals are faced with increased compliance requirements, the call for additional and higher-value services and growing geographic diversity of clients or business operations.

What are some of the biggest misconceptions that CPAs have about going paperless?

Packer: If anything, CPAs tend to underestimate the positive impact that a content management solution can have in a firm. Many firms consider "going paperless" to mean nothing more than building an electronic archive. While there are benefits to doing this, firms can benefit much more by going "beyond paperless" and implementing solutions that can manage content throughout the firm and throughout the engagement lifecycle. The ROI can be found in every corner of a firm and in every process. There are very few if any other investments that can have the impact of a content management solution.

Francis: Organizations may perceive document imaging technology as being too expensive, too confusing and may require a long time to implement. By implementing a document imaging solution you are eliminating the inefficiencies of paper storage and management.

Dias: One big misconception is that moving to paperless simply means buying a software package. CPAs need to put the right processes in place, supported by the right software and training.

Kepczyk: The biggest misconception is that firms think that by implementing a document management system that they will be “paperless.” In reality, the firm must integrate new workflow procedures and train personnel to create and manage the documents so they can be properly managed within the document management system. Without this workflow integration, firms will repeat the same mistakes they had with using standard Windows Explorer file storage.

Randolph Johnston (K2 Enterprises): Multiple mistakes are being made because the expectations of the CPAs are not right. Systems still need to be cleaned. Document naming, retention cycles and processes need to be understood. Suppliers who have “best practices” are not necessarily the best fit for your organization and in fact in some cases are not “best practices” at all. However, the best practices are better than no practices or procedures which are not defined by the organization.

Lacerte: CPAs and businesses believe that going paperless is a pain and will be expensive. It doesn’t have to be. CPA2Biz partnered with Bill.com to offer the service free to accountants and as little as $15/month for the business (sign up thru CPA2Biz.com and receive 10% off). Web technologies make it simple too. With the CPA2Biz/Bill.com offering, the CPA only needs to know how to use a fax machine to get started.

Bourke: One misconception about going paperless is that your data is more prone to loss or damage. Think about those old file rooms. They are vulnerable to fire, water damage, extreme temperature and more. Today’s security and storage technologies ensure the integrity of that data for many years to come. Another misconception is that the practitioner will not be able to comply with the professional standards during file lock-down periods and retention periods, not to mention the ability to have the files available for peer review and inspection. Quite the contrary. Automated workflow solutions allow for easy lock-down and adherence to firm mandated retention periods and in talking to the peer review and compliance teams, a majority would rather have electronic versus paper files to peer review or inspect.

Bhansali: While the broad scope of paperless technology is to increase productivity in all phases of CPA engagements, most CPAs take a much narrower view. Their first misconception is that the main purpose of going paperless is to eliminate the piles of paper in their offices. They don’t see how eliminating that pile is going to increase their productivity. Their second misconception is that going paperless is all about implementing a document management system.

What do CPAs and finance execs need to do before they consider going paperless?

Kepczyk: Firms should select a product that integrates easily with their primary service applications — usually the tax or audit departments — making sure that this integration includes robust features such as an integrated portal and easy ability to integrate documents delivered via e-mail and all primary accounting applications.

Lacerte: First understand the process and make sure that it streamlines your business from the standpoint of workflow controls across all documents, approvals and payments. So understand the process you have and the process you need and then work with your provider to design the controls into the process automatically.

Johnston: They need to consider more strongly the cultural impact of a paperless implementation and the training and re-training time needed for their people to learn the system well. That’s often underestimated from both a financial and time perspective.

Dias: There are tremendous, documented benefits to adopting a paperless environment. But it requires an upfront commitment. Organizations need to determine if it’s a commitment they are willing to make. For example, there are three important steps in moving to a paperless environment: redefining the workflow process to support the new environment; ensuring the firm has the right technology to enable a paperless workflow — including not just the software, but also the right hardware, for example dual-screens, adequate storage and effective scanning equipment — and making certain that staff receive training on the new processes; and technology so the firm can optimize the benefits of both technology and best practices.

Francis: To really understand the need, not to mention the value, of going paperless organizations should start by quantifying their business operations and production processes. Only then will they understand the costly labor of production — the time wasted by organizing and searching for documents, the costs associated with faxing, shipping and storage of paper files. Furthermore, they should determine if there have been customer service issues due to lost or illegible documents, which undoubtedly cause them to incur additional costs and time.

Bhansali: Organizations need to change their mindset from going “paperless” to going “digital.” For instance, rather than blindly scanning years’ worth of paper documents, they should focus on setting up the proper processes for using digital documents in the most efficient manner for their current engagements. Equally important, when a firm’s mindset is to go digital, they should not be thinking solely about document management systems, but also about implementing tax, accounting and payroll solutions that enable them to receive most of their source data in a digital format that flows right through to the applications. This minimizes data entry in their office.

Bourke: They need to understand the existing manual process and work with their vendors on easy ways to migrate to an electronic solution. Change in the existing process is inevitable, but if managed correctly, it will result in little or no disruption to your business.

Next week our panelists divulge the benefits of going paperless, recommend ways for CPAs to implement a paperless system to avoid workflow challenge headaches and reveal paperless implementation success stories.

Hank Berkowitz is the Publisher of AICPA’s Insider™ electronic newsletter group in
New York City.