CPA firm trying to go paperless - any advice?

[Terry]

Hello. My CPA firm is wanting to go paperless or at least use and store less
paper. We are currently looking at two software packages for scanning and
managing digitized documents. One is ProSystem fx Scan (CCH, a Wolters
Kluwer business) and File Cabinet CS (Creative Solutions). Both have their
pros and cons. We are also looking at strategies for getting rid of our
enormous backlog of paper in storage. I would very much like to hear from
other CPA firms that have recently made this transition and hearing their
stories, suggestions and recommendations. Thanks in advance. Terry

[Chris Gunn]

Post by Terry
Hello. My CPA firm is wanting to go paperless or at least use and store less
paper. We are currently looking at two software packages for scanning and
managing digitized documents. One is ProSystem fx Scan (CCH, a Wolters
Kluwer business) and File Cabinet CS (Creative Solutions). Both have their
pros and cons. We are also looking at strategies for getting rid of our
enormous backlog of paper in storage. I would very much like to hear from
other CPA firms that have recently made this transition and hearing their
stories, suggestions and recommendations. Thanks in advance. Terry

Howdy Terry,

It is very handy to not have file cabinets full of paper. However,
computers and their hard drives do crash now and then. If you don't have a
good backup system, you can be out of business the same as having the
building and everything in it burned to the ground. If you've been
following the news, computers get stolen quite often as well.

Check with your insurance company. They will probably cover loss of
business due to a fire but will laugh at you if you lose everything on the
computers.

If you have to take papers into court, you may find the court will not
accept them with the same integrity as paper with original signatures. The
lack of one original signature could cost you far more than continuing to
maintain your paper files.

My recommendation: Keep both! The digitized copies are a nice backup for
rapid retrieval and printing. The paper copies will retain your client's
confidence and avoid some very expensive legal problems.

Thanks, Chris www.bizynet.com and www.bizycart.com
BIZynet Coordinator ***@bizynet.com - [phone]
Moderator of biz.ecommerce, biz.general, biz.marketplace.discussion,
biz.marketplace.web-design, biz.marketplace.international & others

P.S. I remember a time when I needed to renew my license plates and
everyone in California was waiting in line. They had no backup or a way to
process things until the computer system was restored. I like having my
paper when the electricity is off.

[brecker]

A couple comments...

First, to the prior post.. Courts do recognize copies, faxes have been
consistently recognized and are legally binding, as with any document, it
has to be proven to be forged not the other direction. What is more
difficult in court are the non-signature items, i.e. data files. However,
again the courts have allowed data, taken through a controlled process, to
be used in court. For example EnCase software, which can take images of
drives without modifying the data, can be presented as valid evidence. I
work with forensic accountants on the IT side and have gathered this
information which has then been used in legal proceedings.

As for paperless.....

I am not a tax person, but I use Lacerte DMS. Mainly because it was
inexpensive. I have a Xerox Document 152, which is small, lightweight and
portable and scans in duplex (color if desired). I paid about $450 for it. I
scan into Paperport, which saves as a PDF and then drag documents into
either Lacerte DMS or my trial balance software, CaseWare.

If you are just doing tax and accounting, your don't even need a fill
document management system. I have not tried the ones you suggest as I went
with Lacerte at the recommendation of a friend. I even installed it at home
to manage my personal documents. However, as an audit firm, we are going to
an all paperless environment to deal with the new SAS (103 I think) on
documentation. While CA has always had a lockdown rule, the new SAS means
all of us auditors have to deal with it now.

Anyways, drop me an e-mail if you need more: matthew at breechercpa dot com

Matt

Post by Chris Gunn

Post by Terry
Hello. My CPA firm is wanting to go paperless or at least use and store less
paper. We are currently looking at two software packages for scanning and
managing digitized documents. One is ProSystem fx Scan (CCH, a Wolters
Kluwer business) and File Cabinet CS (Creative Solutions). Both have their
pros and cons. We are also looking at strategies for getting rid of our
enormous backlog of paper in storage. I would very much like to hear from
other CPA firms that have recently made this transition and hearing their
stories, suggestions and recommendations. Thanks in advance. Terry

Howdy Terry,
It is very handy to not have file cabinets full of paper. However,
computers and their hard drives do crash now and then. If you don't have a
good backup system, you can be out of business the same as having the
building and everything in it burned to the ground. If you've been
following the news, computers get stolen quite often as well.
Check with your insurance company. They will probably cover loss of
business due to a fire but will laugh at you if you lose everything on the
computers.
If you have to take papers into court, you may find the court will not
accept them with the same integrity as paper with original signatures.
The
lack of one original signature could cost you far more than continuing to
maintain your paper files.
My recommendation: Keep both! The digitized copies are a nice backup for
rapid retrieval and printing. The paper copies will retain your client's
confidence and avoid some very expensive legal problems.
Thanks, Chris www.bizynet.com and www.bizycart.com
Moderator of biz.ecommerce, biz.general, biz.marketplace.discussion,
biz.marketplace.web-design, biz.marketplace.international & others
P.S. I remember a time when I needed to renew my license plates and
everyone in California was waiting in line. They had no backup or a way to
process things until the computer system was restored. I like having my
paper when the electricity is off.

[San Diego CPA]

I agree w/ the points made by "brecker" with regard to electronic
documentation being accepted as legally binding. Chris Gunn supplies
excellent feedback in this and a few other forums he moderates but I think
his views on paperless are a bit dated and out of sync with today's reality.
Enough about that.

I use FileCabinet CS in my practice and am virtually paperless for my client
work as well as my own internal administrative needs. I have seen some
pretty slick features in ProSystem fx that FileCabinet does not have but if
you want to step up to more advanced features (and prices) you'll also want
to throw GoFileRoom into the mix. I'm a sole practitioner so price was very
important. Filecabinet CS is much cheaper than either of the other 2
products named and while it supports my needs, I think there are certainly
features that other products have that it lacks. I do recommend FileCabinet
CS as a basic document management solution, however, you need weigh the
feature sets of the various products and see how they will or won't support
your needs and then consider how important pricing in the final decision.

Post by brecker
A couple comments...
First, to the prior post.. Courts do recognize copies, faxes have been
consistently recognized and are legally binding, as with any document, it
has to be proven to be forged not the other direction. What is more
difficult in court are the non-signature items, i.e. data files. However,
again the courts have allowed data, taken through a controlled process, to
be used in court. For example EnCase software, which can take images of
drives without modifying the data, can be presented as valid evidence. I
work with forensic accountants on the IT side and have gathered this
information which has then been used in legal proceedings.
As for paperless.....
I am not a tax person, but I use Lacerte DMS. Mainly because it was
inexpensive. I have a Xerox Document 152, which is small, lightweight and
portable and scans in duplex (color if desired). I paid about $450 for it. I
scan into Paperport, which saves as a PDF and then drag documents into
either Lacerte DMS or my trial balance software, CaseWare.
If you are just doing tax and accounting, your don't even need a fill
document management system. I have not tried the ones you suggest as I went
with Lacerte at the recommendation of a friend. I even installed it at home
to manage my personal documents. However, as an audit firm, we are going to
an all paperless environment to deal with the new SAS (103 I think) on
documentation. While CA has always had a lockdown rule, the new SAS means
all of us auditors have to deal with it now.
Anyways, drop me an e-mail if you need more: matthew at breechercpa dot com
Matt

Post by Chris Gunn

Post by Terry
Hello. My CPA firm is wanting to go paperless or at least use and store less
paper. We are currently looking at two software packages for scanning and
managing digitized documents. One is ProSystem fx Scan (CCH, a Wolters
Kluwer business) and File Cabinet CS (Creative Solutions). Both have their
pros and cons. We are also looking at strategies for getting rid of our
enormous backlog of paper in storage. I would very much like to hear from
other CPA firms that have recently made this transition and hearing their
stories, suggestions and recommendations. Thanks in advance. Terry

Howdy Terry,
It is very handy to not have file cabinets full of paper. However,
computers and their hard drives do crash now and then. If you don't have a
good backup system, you can be out of business the same as having the
building and everything in it burned to the ground. If you've been
following the news, computers get stolen quite often as well.
Check with your insurance company. They will probably cover loss of
business due to a fire but will laugh at you if you lose everything on the
computers.
If you have to take papers into court, you may find the court will not
accept them with the same integrity as paper with original signatures.
The
lack of one original signature could cost you far more than continuing to
maintain your paper files.
My recommendation: Keep both! The digitized copies are a nice backup for
rapid retrieval and printing. The paper copies will retain your client's
confidence and avoid some very expensive legal problems.
Thanks, Chris www.bizynet.com and www.bizycart.com
Moderator of biz.ecommerce, biz.general, biz.marketplace.discussion,
biz.marketplace.web-design, biz.marketplace.international & others
P.S. I remember a time when I needed to renew my license plates and
everyone in California was waiting in line. They had no backup or a way to
process things until the computer system was restored. I like having my
paper when the electricity is off.

[Chris Gunn]

On Wed, 01 Nov 2006 20:08:15 -0700, "San Diego CPA"

Post by San Diego CPA
I agree w/ the points made by "brecker" with regard to electronic
documentation being accepted as legally binding. Chris Gunn supplies
excellent feedback in this and a few other forums he moderates but I think
his views on paperless are a bit dated and out of sync with today's reality.
Enough about that.

Howdy,

Has nothing to do with dated. Has to do with knowing how easy it is to
modify an image file. Among other things, I happen to be an expert at that.

You can send me a fax with your signature on it and I can modify it to make
you legally responsible for anything I want. I can even retain the original
file date/time stamp and ensure there is no proof on my computer that I
changed it.

A search of court records by a good attorney will probably show a number of
cases where faxed documents were not held as legally binding. It's very
convenient to state a fax is legal but the bottom line is what happens in
court.

If you are in a business where you may need to take documentation into
court, I strongly recommend you have the original ink and paper. You are
quite welcome to gamble on winning a case if you wish.

Thanks, Chris www.bizynet.com and www.bizycart.com
BIZynet Coordinator ***@bizynet.com - [phone]

[San Diego CPA]

Post by Chris Gunn
On Wed, 01 Nov 2006 20:08:15 -0700, "San Diego CPA"

Post by San Diego CPA
I agree w/ the points made by "brecker" with regard to electronic
documentation being accepted as legally binding. Chris Gunn supplies
excellent feedback in this and a few other forums he moderates but I think
his views on paperless are a bit dated and out of sync with today's reality.
Enough about that.

Howdy,
Has nothing to do with dated. Has to do with knowing how easy it is to
modify an image file. Among other things, I happen to be an expert at that.
You can send me a fax with your signature on it and I can modify it to make
you legally responsible for anything I want. I can even retain the original
file date/time stamp and ensure there is no proof on my computer that I
changed it.
A search of court records by a good attorney will probably show a number of
cases where faxed documents were not held as legally binding. It's very
convenient to state a fax is legal but the bottom line is what happens in
court.
If you are in a business where you may need to take documentation into
court, I strongly recommend you have the original ink and paper. You are
quite welcome to gamble on winning a case if you wish.

Your point is well taken, however, there have been document forgeries around
as long as there have been documents. As per expectation, document forgery
has migrated to the on-line world as you describe above, but if you're
dealing with someone so unscrupulous as to alter documents, it doesn't
matter if the docs are physical paper or electronic. Even when using
"secure" paper such as manual checks, amounts can be changed, signatures
forged, etc. If there's a will there's a way holds true regardless of the
media.

In my mind, even taking all of these points into consideration, there's no
reason why most businesses today cannot take advantage of electronic
document management and reduce (or eliminate) paper and reap the significant
cost savings associated with going to an electronic document solution. Of
course it needs to be done with reasonable & appropriate safeguards. The
savings are not limited to lower expenditures for office supplies (paper,
toner, etc.) or off-site document storage (think Iron Mountain & similar)
but also in increased productivity in being able to search & retrieve
documents more quickly, disseminate information w/o incurring postage &
delivery charges, better risk management in being able to purge documents
once they're no long needed, etc.

[Anna_Kubit]

"Even when using "secure" paper such as manual checks, amounts can be
changed, signatures forged, etc. If there's a will there's a way holds
true regardless of the media."

I would personally agree that a document may be forged regardless of
whether it is on paper or on a computer.

Perhaps, a wise strategy would be to keep contracts on paper filed and
stored eventually in a good storage place location (outside the office
to save place) and to keep everything else on the computer. As a CPA
firm you must be careful that the data is secure as confidentiality is
a large part of any accounting practice (I am an accountant myself and
own a business consulting firm which gives strategic direction on
growth and expansion mainly). Financials are normally confidential in
nature, which certainly would differentiate how you set up your systems
and processes. A handyman may not need to worry about confidentiality
as much as a lawyer or a psychologist does. Be sure to secure your
computers and only to give access to the appropriate parties within
your firm that are allowed to see the financials.

I am not sure about how large your company is... You may want to
consider hiring a firm that specializes in systems design. The E-Myth
Revisited is a great book about how to create a business rather than
being self employed. Many accounting companies are small and are pretty
much self employed rather than businesses that function on their own
thanks to great systems and processes in place.

Someone in the post recommended that you perhaps try to create your own
filing system rather than using a software for it. Maybe try this with
a portion of your business to see how efficiently this will work for
you. The great benefit to paperless is the ability to access
information quickly and easily - just be sure to allow ample time for
setting up/planning your system so that once it is up and running, it's
highly efficient.

I am happy to help you further with your implementation of this new
filing system as well as the security part of it. I work with a great
IT consultant that does work for the public and private sector; I'm
sure he could be a wonderful resource for you.

Best of luck with your business!

Anna Kubit
www.konsultar.com

[Chris Gunn]

Post by Anna_Kubit
"Even when using "secure" paper such as manual checks, amounts can be
changed, signatures forged, etc. If there's a will there's a way holds
true regardless of the media."

Howdy Anna,

Quite true! However, when you modify a paper document it leaves chemical
traces and other evidence that can be identified in a laboratory. Signature
analysis is also much more accurate. When an electronic document is
changed, you have only your word to defend things.

Post by Anna_Kubit
I would personally agree that a document may be forged regardless of
whether it is on paper or on a computer.

Lots of people try. Some people get caught. Some get away with it easily
if you give them the chance. Your choice as to how easy you want to make
it.

Thanks, Chris www.bizynet.com and www.bizycart.com
BIZynet Coordinator ***@bizynet.com - [phone]