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Workflow Software: What’s it all about?

A Look at the Big Picture

From the June 2010 Issue

When I start to think about where this concept of workflow software originates,
it reminds me of the debate between creationism and evolution theory: When and
where did it all start? Unlike DOS, Windows, iPhones, etc., for which we can
pretty easily trace the roots of their origins, the source of workflow software
is much more difficult to trace. I challenge you to identify the original source
of workflow software. It’s like trying to discover the origin of websites
and portals. Why is this point important? I guess only because I found it more
difficult to comprehend the concept of workflow software without knowing how
it originally evolved over its relatively short history. Fortunately, there
is a sufficient number of alternative workflow solutions available today to
help you develop an understanding of its core purpose and functionality.

There is no single definition of what constitutes workflow software. On one
hand, it could simply be an Excel spreadsheet that has a routing list that gets
checked off as the engagement moves from one step in the process to the next.
At the other end of the spectrum, workflow software has the potential to route
an electronic document automatically by interpreting the contents of the document
and perhaps even take information from the document and transfer it. Think about
the scan and populate software for 1040 tax products that takes data on scanned
W-2 forms and transfers it directly to the tax software “hands-free.”
The automatic routing process even has the potential to determine who to route
the document to based on its contents.

The bottom line on defining workflow software is this: It’s any functionality
that automates the flow of information based on some level of pre-defined rules.
A classic example of basic workflow software is the “rules” feature in MS Outlook
that lets you move e-mails from your inbox to a specific folder automatically,
based upon pre-defined rules that you establish. For example, move any incoming
e-mails sent from into the CPATA e-mail folder.

So let’s talk about what workflow for an accounting and tax practice is
all about. The current generation of workflow software originated primarily
as a by-product of the evolution of document management software. As firms began
the journey to a paperless practice model by converting all documents into digital
format, it quickly became apparent that we needed an electronic tool to replace
our Red Rope or Redweld workpaper folders. These typically had a paper routing
sheeting attached to them with a rubber band. After all, if we’re going
paperless we don’t need workpaper folders anymore, right?

The issue is that these folders served two key functions. One was to be the
container for the engagement workpapers, which, by the way, is the role of the
DMS now. The other function was to serve as a tangible tool for organizing your
workload and moving engagements throughout the office as the engagement progressed.
It is this latter function and all that it encompasses that is the primary force
driving the evolution of workflow software.

In the big picture, when we talk about transforming an accounting practice
to a paperless practice model, there are four primary software applications
that are at the core of this initiative: a scanning solution to convert the
paper documents into digital documents, the DMS to manage the storage of the
digital documents as well as other engagement files, a portal solution to make
the digital documents available to clients and others electronically, and, finally,
the workflow automation software that facilitates the flow of the documents
through these applications. In addition to these core “paperless”
applications, you also have all of the other applications that automate your
services: tax preparation, trial balance, write-up, etc. All of these applications
will ultimately feed into the digital document pipeline and vice-versa. That
is why it is important to research the depth of integration these core paperless
applications have with the accounting and tax applications that you use in your

The scope of functionality in workflow software on the market today is all over
the board. Therefore, you can’t simply assume that since an application
is branded as workflow that it has a core set of functionality. I think it is
helpful to define two broad categories of workflow software, which will provide
you with a starting point in developing your workflow software strategy: document-based
and engagement-based.

Document-based workflow software is the most prevalent and the most basic.
A lot of the DMS vendors tout the inclusion of document routing features in
their software as workflow. The essential characteristic of this type of workflow
software is that it allows you to set up rules for how a single document should
be routed and who it should be routed to. The operative words there are single

These systems are designed to route one document at a time. There are many
benefits to this functionality, i.e., routing a vendor invoice to a designated
person for approval based on the invoice amount. From a practical perspective,
this doesn’t meet the fundamental workflow needs of an accounting firm.
The nature of the vast majority of documents and information that flow through
an accounting and tax practice is engagement centric.

Therefore, the primary value of workflow software in this environment is the
ability to provide the features and functions to serve as the online control
center and workpaper container for the engagement. The more robust workflow
systems accommodate this through features that include linking multiple files
in the DMS to a specific project, a comprehensive feature to record and track
engagement review notes, automated e-mail notifications, security controls over
access to the engagement folder and the ability to establish a routing roadmap
for the engagement process that allows you to pre-define the sequence of individuals
or workgroups the engagement will be routed to.

In addition to the workflow features discussed in the preceding paragraph,
there are many other workflow features and functions that will help to facilitate
your transformation to truly paperless workflows. The short list of these features
includes staff scheduling, electronic checklists, deliverable and due date tracking,
and user-defined fields to track information tailored to the needs of your firm.

It’s a bit of a challenge to accurately describe the nature of an emerging
software technology like workflow. Therefore, I recommend that you find some
time to participate in a few vendor demos of alternative workflow systems. If
you visit their websites, you’ll find that they typically offer free webinar
demos available for the public to preview the products, or they will happily
schedule a private demo for you. You might also be interested in watching our
archived webcast from June 4 of last year, available on our archived events
page at

We will be covering this topic again in our two-hour free CPE event on August
31, 2010. The vendors included in the comprehensive list here range in functions
and purpose, but several are considered accounting firm centric. Several are
even offered in the web-hosted, software as a service (SaaS) model, which I
believe is an essential platform for this application to enable a true anytime,
anywhere workflow model.

As we have discussed, workflow software is an important piece in the foundation
of a paperless practice model. It is more important now than ever before that
you develop your overall paperless strategy. By taking the time to prioritize
your objectives and the initiatives and applications that will be required to
achieve them, you can avoid making costly mistakes with ineffective solutions
that don’t co-exist effectively. Having a roadmap will significantly increase
your probability of success.