Workflow Automation Software

From the Aug. 2009 Issue

Just in case you’re running out of things to do or think about this summer, relative to your IT, we thought it would be helpful to introduce you to yet another initiative that needs to be on your strategic IT radar: workflow software. Just like document management, scanning and client portals, workflow software covers a lot of territory, so getting your arms around what it encompasses is an important first step. The objective of this article is to help you make that step.

Those of us who have been working in the profession since prior to the new millennium can certainly relate to the traditional workflow model that went something like the following scenario: The engagements I need to work on next are on the left side of my desk, perhaps on the floor. Those that I am ready to route to the next person in line are on the right side of the desk waiting for me to walk them down the hall to the appropriate person. Then, of course, the engagements that are waiting for more client information are sitting behind me on the credenza. Each of them has a routing sheet wrapped around the folder with a rubber band.

Does this sound familiar? Perhaps your office still relies predominately on this model. For most of us, however, as we have transitioned to digital workflows using document management systems, we have lost our cherished paper file folders that served as our primary workflow management tool. So the need for some sort of application to manage the flow of engagements in a paperless world becomes evident very quickly. The problem is it takes time to develop a mature software application to meet and exceed the needs of our traditional paper-based processes. So let’s take a peek into the nature of workflow software and how it is likely to evolve for the accounting and tax profession.

WORKFLOW DEFINED
In order to gain a better understanding of what workflow software really is, I think it is helpful to take a step back and review the key ingredients of a typical client engagement process. Then, we will talk about how workflow software can help automate the process.

Documents – I am a little reluctant to distinguish documents from files because in a digital practice the documents are in electronic format much like all of your other files. However, to the extent that you still have paper documents in your workflows, the distinction is important. Documents typically consist of supporting documents, workpapers, and engagement management documents such as routing sheets and checklists.

Files – In this context, we are talking about digital files: Excel spreadsheets, Word documents, QuickBooks files, etc. Basically, it’s all of the files that are pertinent to an engagement. Anything we can do to improve the management of these files is a big plus.

Due Dates – Every engagement has a deadline. In many cases, there may be multiple deadlines: financial statements completed by 1/31, audit report draft reviewed with client by 2/28, final report delivered to board of directors by 3/31, etc. You get the point. Therefore, we have to make sure we identify the due dates and monitor our ability to meet them.

Deliverables – In accounting and tax practices, deliverables are usually easy to identify, but often a challenge to complete. Tax returns, financial statements, audit reports, financial plans, etc., are all examples of typical deliverables in our profession.

Procedures – This is the core of a workflow when you get right down to it. It is the collective set of tasks that are required to complete an engagement, such as scanning the source documents, creating the workpapers, preparing the tax return, etc. The key here is keeping track of who has to do what and when.

Communication – There are many different aspects to communication on a typical client engagement. What are the deliverables? Who is doing what? What information do we need from the client? Review notes and resolutions, special instructions, status of the engagement, and more. The timeliness and quality of communication is directly tied to the quality and profitability of the overall engagement. This is where the core value of the workflow software exists.

Collaboration – One of the defining characteristics of accounting and tax services is the high degree of collaboration that is required. Whether we are collaborating with our colleagues on a tax or audit engagement, or with a client to review a personal financial plan, or with a banker to review a financial projection, we rely heavily on our ability to review documents and files with multiple people and document the essence of that collaboration.

Fees & Expenses – Obviously, a key ingredient of every professional engagement is to track the time and expenses invested in the project and to record, track and collect our fees. To the extent that you can integrate the reporting of this information with the rest of the engagement data, you will be better equipped to manage the profitability of your engagements. And that is always a good thing.