Document Management Essentials

Document management systems are widely used in many types of businesses, including accounting firms. But even though most firms have heard of document management, not everyone understands the options available. The move from paper filing cabinets to paperless is only one piece of the puzzle. Once your files are digital, you need a strategy for finding them, working with them, and keeping them secure. The following commonly asked questions can help you formulate a document management strategy.

What’s the difference between document management and document storage?

Document management differs from document storage in several key ways. First and foremost, a document management system should store files in their native formats, so you can work with them. A system that stores static PDF files or converts files to a proprietary file format won’t be useful for files you are still working with. Document management systems will also include collaboration features, like the ability to check-in and check-out files. Check-in/check-out helps ensure you’re working with the most recent version of a file and prevents anyone from making changes while you’re working with a file. Version control features let you access and restore prior versions of a document in addition to letting you see who has made changes in the past.

Document Management Features You Didn’t Know You Needed

What types of documents should I store in my document management system?

A document management system can be used to store virtually any kind of file. Some firms create paperless tax workflows but continue to use paper elsewhere. If your system integrates with your tax software and/or workflow software, linking client files in the document management system can create a more efficient tax workflow. But these systems can also improve efficiency in audit or consulting engagements. And they can even store your firm’s HR documents, internal processes and procedures or merger & acquisition files. Ideally, you will set up security permissions to limit employee access to only the documents they need to access. For example, you may want to let all employees access internal process documents, limit access to client documents to only those staff members who might work on those engagements, and restrict confidential HR documents to just a handful of firm employees.

Spring cleaning: Your Next Steps for a Paperless Firm

How can I access files from anywhere?

The easiest way to achieve remote file access is store your files in the cloud. In the past, VPN access might have been good enough. However, moving forward, many firms will be faced with new expectations for mobile access. As your firm’s mobile needs change, it’s important to keep up with the evolving capabilities of mobile document management systems. Staff will expect to be able to access more than just simple client contact information from their mobile devices. They’ll want instant access to files. Once they access the files, they’ll want to do more than just look at them. They’ll want collaboration and workflow features as well. Not every feature of a document management system can be replicated in a mobile app. But storing your documents in the cloud makes accessing files easier no matter what type of device you’re using.

Mobile Document Management – Trends and Recommendations

Is storing documents in the cloud secure?

Storing documents in the cloud is secure as long as you’re working with a trusted technology partner. First of all, the types of data centers that house most cloud applications are far more secure than the average accounting firm. They have strict policies in place to protect your data physically and digitally. They employ security experts that can keep up with the latest exploits, and they continuously monitor their systems for problems.

In addition to the security policies of the data centers, you can further protect your documents in the cloud by making security a priority in your firm. Never exchange sensitive information through un-encrypted emails. Make sure your document security permissions limit staff access to just the information they need to complete their work. Have a plan in place to identify more sensitive documents that need additional security, and limit access to them accordingly. Role-based, folder-level and file-level security features provide varying levels of security to match the needs of your firm.

6 Warning Signs Your Client Files Might Not be Secure

What are some document management best practices?

One of the most important best practices for document management is carefully evaluate your firm’s current procedures to look for areas of improvement. Paper-based workflows are rarely efficient, but many firms set up their document management systems to mirror these outdated processes.  Look at places where your document management system integrates with other systems. Those are the areas where firms can gain the most efficiency.

Related to that, make sure you’re aware of and fully-utilizing your system’s features. Document management systems include collaboration features that can help you work more efficiently. Version control, check-in/check-out, notes and retention settings all provide important functionality that is far superior to paper. And if your process ends by printing a stack of hard copies and paper invoices, you’re missing out on the benefits of a truly paperless process. Exchanging files electronically is faster and cuts down on printing and postage costs.

5 Common Document Management Workflow Mistakes and How to Fix Them

How does a document management system improve my firm’s workflow efficiency?

Traditionally, document management has been primarily limited to the beginning and end of a firm’s tax workflows. Firms gather and store client documents. Then they deliver and archive finished returns. However, in reality, a document management system can improve efficiency at almost every step of your process.

First, a document management system provides organization for your firm’s files so they are easier to find and use when you need them. During the preparation and review process, being able to access these documents quickly will save time. If your document management system is integrated with your tax preparation software, the time savings can be significant. When the return is complete, your document management system can store multiple copies and automate your file retention and destruction policies.  Lastly, you can even store invoices and copies of payments received alongside the completed return and all of its source files.

Building Workflow Efficiency with a Document Management System

How does a document management system improve client service?

It’s a common misconception that clients don’t care about the software you use. While they may not be aware of the brand of software or its specific features, a good document management system can directly benefit your clients in a number of ways. Since your document management system organizes your client files, the most immediate benefit is that you can more quickly and easily find client files when your clients request them. Document management systems can also provide clients with convenient features like e-signatures and portals. And since a document management system can make your firm more efficient, your clients will appreciate that their work is completed faster.

Improve client service with every client interaction

Is a document management system worth the money?

Return on investment can be difficult to measure for a document management system, but the benefits are real and measurable. The most easily measured cost savings are the reduced need for paper, printer toner, printer maintenance, postage and mail supplies. In addition, switching to paperless processes can save firms a lot of valuable real estate. Servers don’t take up as much space as file cabinets and paper storage. And the cloud reduces the footprint of your file storage even more. Firms can also eliminate the cost of off-site storage as they digitize or purge their paper files.

Some cost savings are harder to calculate. Efficiency gains from implementing a digital tax workflow can save firms a few minutes to a few hours per return, depending on complexity. In addition, the risk mitigation of having digital files (with off-site back-ups) can provide disaster recovery and business continuity benefits that are difficult to quantify but no less important.

Proven Strategies for Effective Document Management

If I have engagement workflow software, do I need an additional document management system?

Engagement management software adds a great deal of efficiency to tax and audit workflows. But those systems don’t manage all of the documents in your firm. If you already have engagement software, you can still benefit from storing non-engagement related files. In addition, the search capabilities of document management systems are usually more robust. Better search tools help you find the information you need more easily. You can also use a document management system to collect and organize files prior to rolling them forward. And retention settings can help you automate your retention policy for files that you no longer need.

4 Ways Document Management and Engagement Software can Work Together

To learn more about building workflow efficiency throughout your firm with a document management system, download our whitepaper, Document Management: A Tax Season Planning Guide.


Aimee Hall

Product Marketing Manager at Wolters Kluwer Tax & Accounting

All stories by: Aimee Hall