The Truth about Paperless Accounting Firms

Many firms have started down the paperless road and achieved varying levels of success. But not all paperless accounting firms are created equal. Most firms are not completely paperless, and even when they are, they may not be fully realizing all of the benefits that being paperless can provide.

Simply digitizing the paper in your office may help minimize clutter, but it doesn’t necessarily provide any additional benefits. In fact, electronic documents can create some new challenges that don’t affect paper documents. With the right planning and implementation, your paperless accounting firm can overcome these hurdles and achieve the full potential of paperless.

Digital files are more secure, except when they’re not

In the early days of paperless accounting firms, many firms feared that documents would be less secure as digital files than stored in locked filing cabinets as they’d always been. Now, though, most people realize that paper documents are not as secure as once believed. Still, security breaches are increasingly common, so firms must do their due diligence in securing their documents. Here are some ideas for improving document security:

  • A secure data center. Firms need to make sure that their servers are physically secure, as well as safe from hackers. The easiest way to do this is to contract with a trusted IT partner to host your system in the cloud. Cloud service providers will have the IT infrastructure and policies in place to monitor, maintain and defend the servers hosting your data.
  • Limited access. Your staff members may pose a threat to your clients’ privacy, thanks to phishing scams and other vulnerabilities. Make sure you limit access to client files so only staff who needs to access the files can access them. Security groups by role or team can make this type of security system easier to maintain.
  • Multi-factor authentication. Clients as well as staff may compromise their passwords if they are targeted by phishing scams. Multi-factor authentication requires additional verification before a user can access the system. This can help firms prevent unauthorized access and protect sensitive documents stored within a system.
  • Secure portals. Sending sensitive information via email is simply not secure. Exchange files using a secure portal that encrypts data even when it is sitting on the server. Use multi-factor authentication to secure these files even more.

Everyone makes mistakes, even paperless firms

Compliance with rules and regulations is a basic value of accounting firms. Since going digital can help firms reduce errors through automation, paperless accounting firms are at an advantage when it comes to compliance. Just make sure you implement these basic compliance-enhancing features.

  • Audit trails. If a file changes, can you tell who made the change or what changes they made? The ability to see who has accessed a file and determine what changes were made can protect firms and create accountability.
  • File retention policies. Keeping a file too long can be almost as bad as not keeping it long enough. Unfortunately, adhering to retention policies can be time consuming and error-prone. Automating these policies can help keep your firm on track by flagging expired documents or automatically purging them.
  • Data back-up. Anyone who has accidentally purged an electronic recycle bin with an important document inside knows the importance of regular back-ups. The ability to restore documents when they’ve been mistakenly deleted is something you might not even realize you need until it’s too late. Luckily, the CCH Axcess Document Cloud Purge Restore (CPR) feature is included at no extra cost for CCH Axcess Document customers.

Paperless accounting firms aren’t necessarily more efficient

Of course, paperless accounting firms can create more efficient workflows and processes than their paper-based peers. But efficiency takes careful planning. You can’t just replicate your old workflows on a computer and expect better outcomes. Instead, take advantage of the unique benefits of paperless workflows, including the following examples.

  • Collaboration. If you have multiple people working with the same documents, it can be hard to tell who is working on what and whether or not you’re working with the most recent version of a document. Being able to check-out a file when you’re working on it can prevent unexpected changes. When you’re done, check it back it in so it’s available to the rest of the team.
  • Versioning. Even with the most careful processes, there may be times when you need to refer to or restore an older version of a document. In the past, you could refer back to an old hard copy document or implement naming conventions for saving multiple versions. But document management systems can store multiple versions of the same document automatically. You can see what changes were made, when, and by whom.
  • Project management. If you’re scanning in all of your client source documents but still using paper route sheets, your firm is not truly paperless. Digital route sheets help move projects from step to step more quickly. They also help firm managers monitor project status more easily.
  • Billing. Paperless billing and invoicing is also faster and easier. When you can get bills out the door faster, your firm will get paid faster. Make the process even more efficient by sending invoices directly to client portals.

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