Articles

By Roger Mongeon
Published by AccountingSoftware411.com

Converting to a paperless practice can be a daunting step—the unknown is always intimidating. There are many concerns and even fears about moving away from hard copies. However, these fears are misplaced—by using a well-thought-out plan and training accountants and staff properly, a paperless practice actually improves the integrity and security of files and folders, while increasing efficiencies and cost-savings. In fact, a paperless practice can help eliminate many of the worries and pitfalls that come with an accounting practice. For those considering the switch to paperless, 10 benefits in particular stand out:

1. ROI

Many accountants may worry that the switch to paperless will cost more, in terms of training, hardware and software. While a learning curve exists, the return on investment is enormous. For some firms, the switch to paperless can pay for itself within a matter of weeks or months. The overall savings can be found throughout the different components of the life of an engagement. By improving workflow and redefining the roles of accountants and staff, firms will reap considerable savings.

2. Labor Savings

Accountants and staff will need to think differently about their processes and procedures in a paperless environment, and some may worry that the change-over will take too much time and effort. This is an unfounded concern, since paper is an extremely time-consuming medium to work with. Paper requires a great deal of time and labor to organize, file and retrieve. Studies show that most office staff at every level of a firm spend about one hour per month searching for and replacing files. Depending on the size of your firm, a move to paperless can pay for itself within a month.

It is true that moving to paperless without a solid plan and proper education of staff and accountants can be a balky process, and there may be bottlenecks in the beginning. However, with a paperless environment you can save time on the back end, when staff can take over more of the administrative functions.

3. Pricing Costs

Software can be expensive, but so is printing out hard copies. You have to purchase the paper, toner and ink supplies, and then you need to invest money and resources in printers and their maintenance. In most organizations, going paperless can save more than $500 per person per year in printer supplies and will increase the lifespan of a laser printer by at least 200 percent.

There also may be concerns that accountants and staff will not be able to work as quickly if they must spend all day squinting at a single version of a file on the computer screen. With multiple monitors, though, it’s possible to mark up a copy on one screen while reviewing another version on a different screen. This eliminates the need to print multiple draft versions of the same document.

The savings from a paperless environment can also extend to clients. When your documents are available electronically, clients can receive information via email or through a web portal. With their own secure digital versions, your clients will not need to print as many copies at their end.

4. Photocopier Costs

The average office worker makes more than 60 trips per week to the photocopier. Besides the time spent trudging down the halls, photocopiers are very expensive to purchase or lease and maintain. With a paperless environment, those involved in an engagement can mark up a version of a particular document and then electronically send it to the next person. A group can also meet and make electronic notes on a document simultaneously, eliminating the need to make multiple copies of a single draft version.

5. Lost & Misfiled Documents

In accounting firms, losing or misplacing files is a serious concern, and some may worry about documents disappearing somewhere on computers or in the network. Paper is very vulnerable to being lost or misplaced, though: 7.5% of all documents get lost or misfiled. The average cost to replace a document is $120. With a fully secure and properly backed up paperless environment, the risk of losing or misplacing a file is greatly minimized. In an electronic environment with flexible security and version controls, files and folders are much less likely to be accidentally moved or deleted. If something should happen, electronic documents can often be recovered— that’s not true of a piece of paper.

Firms can take control of their archiving and storage systems by instituting a sound policy manager program. Most firms have protocols about how to name and organize files and folders, so they can quickly search for and retrieve electronic information. However, mistakes often happen, whether it is because everyone becomes swamped during tax season or because no one has fully explained the methodology to new staff. With a paperless environment, though, it’s possible to automate the process to an extent, ensuring that files are properly named, stored and archived.

6. Email Management

Email is one of the great blessings and banes of the electronic age. While sending documents electronically saves time, it’s also so easy to do that email boxes get flooded with incoming messages. Most workers spend at least half an hour every month, and often more, managing their inboxes.

Those who adopt a paperless practice may worry that the problem will simply increase when more and more files and folders are moved around the office via email. However, with simple email management strategies, there is no need for accountants and staff to spend tedious hours organizing, reviewing and deleting emails. Email should be treated just like any other types of electronic formats such as Word and Excel. Emails that relate to an engagement should be categorized appropriately—if it belongs in a work binder, it can be filed away quickly.

7. Storage Costs

The idea of paying extra for servers and electronic storage space may be worrisome, but it is much more expensive to store paper files. Client files take up tremendous amounts of space, and many organizations are forced to move to larger quarters once every ten years due to the increased requirement for physical storage of documents. Partners at smaller firms may have boxes of client files stashed way in their basements at home or tucked away in the attic. Storing paper files offsite is expensive, and it can take days to retrieve client information when a third party is holding the boxes.

By moving to paperless, firms can greatly minimize their need for storage space. A single hard drive that costs a few hundred dollars can store up to a million pages.

8. Improved Customer Service

Hunting for files stored in the network while a customer waits impatiently on the phone may be another concern when accountants consider switching to paperless. But when folders are properly named and filed, a paperless approach can greatly improve customer service. When a client calls with a question, accountants have immediate access to all information right on their desktop. A firm may also handle various engagements for a client; the client may call with a tax question but then ask about her wealth portfolio. With a powerful search engine, finding all the relevant paperless documents can take mere seconds.

9. Improved Document Security

The security of paperless documents is another issue—what if someone hacks into your system or a disgruntled staff member destroys electronic files? But with the right safeguards in place, electronic files and folders are much more secure than filing cabinets. In most office buildings, it’s very easy to access the file storage room, even if it is locked and locks on individual filing cabinets are usually not hard to break. On the other hand, electronic security systems that are password protected are much less vulnerable. With electronic documents, anyone who opens and manipulates the file leaves an audit trail, so you can determine who did what, and when.

10. Disaster Recovery Strategy

The threat of fire or water damage to paper files should be a serious concern for firms that keep most of their documentation in hard-copy format. On the other hand, electronic documents can be easily backed up and stored offsite or “in the clouds.” This not only keeps documents safe if a disaster occurs, but it allows for quick recovery of information.

While the leap to paperless may seem overwhelming and a little frightening, a well-executed paperless strategy will offer many advantages over a paper-based accounting practice. Paperless improves efficiencies, costs less and is more secure. It allows accountants to sleep better at night.