I’ve witnessed many significant changes in the technologies and workflow practices of tax and accounting firms in the last several years. Likewise, as we transition to the name CPA Practice Advisor and start a new chapter in the 20-year history of this magazine, I’d like to highlight a few of the technology changes that I think are the most critical to the efficiency and productivity of modern professional tax and accounting firms.
The Paperless Office
The move to a digital work environment was initially painful for many firms. The transition was first to paperless “document storage” programs: systems that provided essentially an electronic filing cabinet. More advanced “document management” systems would come a little later.
The concept was simple enough. With document storage or management systems, users are able to quickly search, find and retrieve documents without leaving their desk. And more advanced features allow users to add review notes, automate retention policies, maintain version control and restrict access to specific users. They also include collaboration tools such as email integration, client portals, scan-based optical character recognition (OCR), and even remote access.
As more firms adopted paperless environments, it was quickly apparent that new workflow processes had to be designed in order to best capitalize on the new digital workspace. The move to front-end scanning/digitization of documents became critical to efficiency.
In addition to designing these new processes, other technologies arrived that continued to build on the paperless premise. The most notable workflow optimization technologies have focused around source document automation tools for scanning, organizing and populating. See www.CPAPracticeAdvisor.com/go/2840 for more on source document automation.
These types of systems vary greatly in functionality and are now available for almost all professional tax packages. The ability to simply scan source documents at the beginning of an engagement, with the system automatically organizing them into a digital document and pulling key data, can save hours of tedious data entry.
New workflow tools promise to further extend the benefits of paperless practices by offering direct access to client financial institution documents. In other words, with client permission, firms will be able to pull W-2s, 1099s, 1098s and many brokerage statements directly from secure portals, which removes the need for scanning since the documents are “always digital.”
The Cloud & SaaS
I’ve never been a fan of the term cloud computing, but I am a big proponent of what it means for the profession and individuals. Quite simply, I believe that web-based everything is the next logical step, and the benefits to tax and accounting practices are many. In some ways, we’ve been using “the cloud” for decades, such as debit cards that let you remotely access your banking institution to perform functions such as deposits, withdrawals, electronic debits and transfers. The data is “remotely accessed,” and few would wish for a return to the days before that was possible. Most of us use online banking tools for personal financial management, and we also use social networking tools, contact management, email and other online tools every day. So it really isn’t a large step to move toward online applications.
With professional programs hosted and maintained by the technology vendors, firms are relieved of IT headaches and constant system updates. Then there’s universal remote access: No matter your location, client engagement work can be accessed, allowing users more flexibility with work schedules and allowing firms to retain skilled employees who may move away. Plus, with the continuing adoption of smartphones like the iPhone, Android, BlackBerry and Windows Phone 7, thousands of financial-oriented apps are available, including many designed specifically for tax and accounting professionals.
Data is always backed up at multiple sites, almost eliminating the threat of catastrophic loss of client data due to server and computer crashes, neglected backup routines, natural disasters and other events to which your firm might be susceptible. The top technology vendors serving the profession use SAS70 Type II compliant environments for data storage, meaning your client data is almost certainly safer in “the cloud” than it is in your own office.
I realize that there are countless other technology trends that have helped shape the profession, as well as those that are continuing to take form. All of these are part of the dynamic technological evolution of the profession, and are evidence of the need to be open to new ideas, technologies and workflow processes.