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ROI: The Cost of DMS and Workflow Software
By Don Emery, CPA, CA
Firms that adopt document management systems (DMS) and workflow software do so to reduce inefficiencies including the amount of time spent on low-value tasks like document retrieval, to increase standardization in filing, naming conventions and processes and reap the rewards of efficiency gains of these new systems.
However, there are firms trying to make-do with homegrown solutions such as Scan to PDF and storing documents using Windows. If your firm is not using DMS or workflow software, or using a solution like Scan to PDF, you likely know firsthand about the challenges of locating, retrieving and maintaining documents.
If you wonder whether an investment into DMS and workflow software will pay off, now is the time to analyze the true efficiencies possible. When it comes to ROI, firms can weigh both the quantifiable savings and those less tangible–but no less important–advantages DMS and workflow software brings.
A quick look at a simple calculation involving time spent retrieving documents
Let’s say your firm has 30 staff with an average salary of $40 per hour and that each person spends 10 minutes per day, a modest estimation, looking for documents. With 30 staff working 22 days per month, the firm is wasting 6,600 minutes/month or 110 hours on this highly administrative task. A simple calculation of 110 hours spent per month at $40 per hour reveals a shocking waste of resources handling the administrative yet necessary task of document retrieval.
A 30 person firm can invest approximately $900 per month on Doc.It’s DMS and workflow software which will reduce document retrieval time to only a few mouse clicks. In this example, the time-savings multiplies out to a cost-savings of more than $3400 per month. Additionally, when time spent is minimized on administrative tasks like document retrieval, more time is available to handle high-value tasks to move more work through the firm.
Measurable Efficiency Gains
Understandably, most accounting firms are extremely interested in the quantifiable, bottom-line numbers that can prove whether DMS and workflow software will pay for itself. Considering the effort involved when DMS and workflow are not handled well, there are several measurable advantages Doc.It’s DMS and workflow software provide.
Retrieval of Documents and Call-backs
Time spent locating files is time wasted; minimizing this time spent is a worthwhile goal. Many accountants may not consider the cost of retrieving documents when documents are:
- stored in a paper file room or in boxes
- kept on someone’s desk or stored offsite (not centrally located or immediately accessible)
- misfiled (paper or digital)
- not named properly, naming conventions are not uniformly applied
Additionally, when firms use Windows to file documents retrieval problems will persist for several reasons including lack of librarianship, file naming conventions and an ever-present threat of anyone accessing, deleting, changing file names or misfiling information.
When retrieval is delayed or impossible for any reason there are real costs associated including time wasted, forced call-backs to clients and the potential for missed deadlines.
By instituting the right DMS and workflows, accounting firms can see significantly reduce this expense. Consider the amount of time that firms spend on handling client files, such as engagement wrap-ups, annual roll forward and movements to inactive storage. All this adds up to about two hours per year for each corporate client and about 15 minutes per year for personal clients. Those at accounting firms also spend about 2.5 hours every single month on annual archive file handling and file wrap-ups. By moving to a paperless DMS, staff and accountants can find files within seconds, not minutes and hours.
By multiplying all the costs involved, the number of clients and amount of staff and accountants, it’s easy for accounting firms to quickly calculate the measurable ROI on a digital DMS and workflow software.
Paper, Printer and Copying Charges
In addition to quantifiable savings, there are less measurable benefits to DMS and workflow software that can be quite valuable for accounting firms. For example, when workflow software allows you to move tasks to the resource who has the required skill set and the lightest workload, you can avoid bottleneck situations and reduce the risk of missing due dates or promised delivery schedule for clients.
Collaboration and Advanced Tools
DMS and workflow software allows accounting firms to greatly improve and enhance the ways in which they work together internally and with clients. When only one person can work on a particular document or engagement at a time before forwarding work to the next person, bottlenecks and a lag in workflow is common. When digital DMS allows multiple people to simultaneously view and comment on a single engagement or file, collaboration and efficiency rule.
Standardization and Best Practices
Every accountant knows how to prepare a tax return, but most don’t know how to manage digital documents. Every firm knows how the flow of work should go, but firms not using workflow software often run into bottleneck situations that could be avoided if workflow software was being used.
In addition to issues surrounding training and education, in the business of accounting, there is no standardization or universally accepted document management or workflow rules. The adoption of standardized methods for creating, managing and storing digital documents will result in significant efficiencies for accounting firms. This is particularly true when it comes to high-volume engagements such as personal tax cases. The right technology and workflows can streamline these types of engagements and allow for repeatability.
Improved Client Service
When files and documents relating to engagements are digital and easy to find, accounting firms increase efficiencies and improve client service. If a client calls with a question or needs the last few years’ of annual tax filings, firms can respond within minutes, not days. Instead of digging through boxes of paper, file cabinets or requesting documents from offsite storage, the information is just a few keystrokes away. Additionally, when workflow software is used one can easily see who is working on a client file and take needed measures to move a file along if a deadline is in jeopardy.
In closing, when you examine the quantifiable and intangible ROI it becomes much easier to take initiative and move forward with DMS and workflow software. The right system should quickly pay for itself.
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About the Author
Don Emery, CPA, CA is Doc.It’s Director of Client Solutions. Doc.It provides document management, workflow and document storage products for accounting and tax firms of all sizes. Don leads the North America business development team and provides implementation consulting services to clients and assists clients with various issues. Don joined Doc.It in 2009 as an Implementation Specialist and was named Director of Client Solutions in 2012.