CPA Practice Advisor - 6

FROM THE TRENCHES

RANDY JOHNSTON

EVP & Partner
K2 Enterprises &
CEO of Network Management Group, Inc.
randy.johnston@cpapracticeadvisor.com
@RPJohnston

DOES YOUR FIRM HAVE A CLEAR VISION FOR

Document Management

WHAT IS YOUR vision of document management? Is it simply document storage, or is it
comprehensive? Do you picture an end-to-end solution including document gathering
with Prepared by Client (PBC) capability, portals, eSignature, as well as integration into
your other key applications such as tax, audit, and email?
The more this year of clear vision
has progressed, the more it has been
blurred by the COVID-19 pandemic,
frantic reactive thinking, and desperation. However, some firms have
continued to look to the future, and
have been proactive at choosing their
next-generation technology tools.
This opportunity to build for the
future has a unique viewpoint since
the future "new normal" may seem
different than the past, providing a
diverse work environment as well as
hope for the future.
The critical item for choosing a
new document management system (DMS) is to focus on the client
experience. In past columns, we
have discussed going from document
management version one to version

SEPTEMBER 2020 ■

two, three, and four. The current
generation of document management
products offer so much more than
document storage solutions (DSS)
and do-it-yourself approaches. Plus,
one of the clear issues demonstrated
during the COVID-19 stay at home
period was the need for easy-to-use
document management systems.
As I'd mentioned in last month's
column, one of the most heartbreaking reports this season was
from a firm that was all paper-based,
had no remote access, and was locked
out of their firm for 60 days. If they
had purchased and trained on using
document management, workflow,
and 1040 workpaper automation
tools, their tax season could have
proceeded far more normally.

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SO, WHAT SHOULD BE IN
A MODERN DOCUMENT
MANAGEMENT SYSTEM?
First, recognize that you may be
using a DMS that was designed over
20 years ago. Since my earliest DMS
implementations were in the 1980s,
and we first implemented DMS in
CPA firms in 1986, some electronic
document systems are approaching
35 years old! I thought it was hard
to believe that automated 1040
workpaper products for tax compliance source documents were over
15 years old when I was writing last
month's column!
Not only are traditional DMS
systems rooted in designs that are
25 to 40 years old, but even recently
released products have not updated

their thinking for a modern experience. And while consumer-facing
systems like Dropbox and Box.net
are convenient, the security protection needed by a professional firm
is lacking. On the other hand, if
you believe all client information is
public anyway, then using a system
with minimal protections will be
convenient for both you and the client. For example, sending documents
attached to an email is convenient
but not secure. If you consider postal
email, this would be like sending a
postcard. Whoever touched your mail
could choose to read it.
What are your firm's document
management issues, and how can you
address them? Consider these needs:
■■Gathering client documents of all
types - Prepared by Client (PBC)
software, which has grown to
almost 20 options in four years, is
now routinely included in better
DMS systems
■■Portals to deliver final work products - standalone, integrated with
practice management, or integrated
with document management are
the front door to your modern firm
■■eSignature products - to gather
client signatures where permissible,
such as completing 8879's, engagement letters, and management
representation letters
■■Review tools - to optimize valuable
reviewer, senior and partner time
which allow mark-up of documents
and simple version control
■■Platform independence - the ability
to have access to a document on

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CPA Practice Advisor

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