The bottom line is that technology is a critical component of a firm's paperless workflow. Leading SaaS applications support digital retrieval, as well as automated organization of tax source documents and data entry into tax preparation software. Advanced DMS and portal systems enable paperless storage and delivery.
To get a clear picture of how "ready" the average firm is to go paperless, we asked nearly 200 randomly-selected firms of all sizes to answer questions on current infrastructure, workflow and company cultures to gauge where they are in the transition, and where they could make changes that would ease the transition.
The results of the annual survey offer a sound overview of an average firm's readiness to adopt a paperless tax workflow. Firms of all sizes can use these results to gauge where they fall in terms of technology, workflow, and culture before moving forward with a formal adoption plan. Analysis of survey results also helped to identify several best practices that firms should consider as they develop their own unique paperless tax workflow plan. Best practices are provided below.
Technology Infrastructure
Implement SaaS applications. Many firms have yet to implement SaaS applications into their workflow, despite the fact that these applications are tested and proven. Firms that report significant time savings during tax season are using SaaS applications to enhance efficiency, taking advantage of 24/7 online availability and powerful document exchange functionality.
There are also solutions that automatically retrieve and aggregate client tax information from leading financial institutions as the information becomes available. This means that firms can retrieve W-2s, brokerage statements, and 1099s directly from the document issuer-eliminating the need to wait for clients to deliver needed source documents.
SaaS applications are accelerating firm productivity to unprecedented levels, so it is highly recommended that firms take the time to research and identify the appropriate SaaS solutions to implement into their tax workflow.
The scanner matters. The first step in a true paperless tax process is to scan tax documents, which makes owning a proper scanner essential. But that not all scanners are created equal. Different types of scanners have different capabilities-meaning different implications for the end user. The best scanner for scanning tax documents is a sheet-fed scanner that scans 30-40 pages per minute, duplex (both sides of a page at once), with a daily duty cycle of at least 1,000 pages. Some quality scanners that fit this description are HP Scanjet 5000, HP Scanjet 7000, Fujitsu fi-6130, and Fujitsu fi-6140.
Dual monitors are essential. Dual monitors make it easy to prepare and review returns, allowing you to open the PDF of source documents on one screen and the tax preparation software on the other. You can view everything you need on both screens at once without having to constantly maximize and minimize windows or look back and forth between paper and screen. Dual monitors considerably increase efficiency during tax season because they support complete on-screen review.
Develop an electronic filing system. An electronic filing system can be as simple as networked file folders on a shared computer drive or as sophisticated as a document management system. Both options facilitate firm-wide access to documents, which is essential to a successful and efficient paperless workflow. However, a formal DMS offers a built-in file structure and automatically enforces a standardized filing process.
Creating a filing structure using networked files is also acceptable, but requires that you develop unique naming conventions and enforce firm-wide use.
Tax Workflow and Processes
Appoint a champion and make adoption mandatory. When rolling out a new process that impacts a major service area, like tax, firms require a champion at the top. Because change is messy and can quickly turn chaotic if not properly managed, a champion at the partner level is recommended.
This ensures the appropriate level of authority to ensure full adoption and acceptance along the way. A champion at the partner level can also mandate process adoption and ensure that staff does not revert to traditional process methods once the heat of tax season hits. If given a choice most will resist change, so making the paperless workflow mandatory is recommended.
Standardize the tax process. When staff follow a uniform tax preparation process, it ensures a far more efficient workflow than if each staff member follows their own "custom" method. When you have a standardized process in place, it also makes implementing process change much easier, because everyone is on the same page from the start. To ensure standardization, firm leaders must take the time to thoroughly review their existing workflow and identify required improvements before implementing new technologies into that workflow. Simply shoehorning ill-fitting technology into the existing workflow will work against efficiency, so be sure that you first refine your process to support added technologies.
Train staff thoroughly on editing tools like Adobe Acrobat. Once you begin scanning documents, it is imperative to work with digital workpapers the same way you would paper versions. The best way to digitally tick and tie documents is through Adobe Acrobat Standard or a comparable PDF editing program. All professional staff should be thoroughly trained on the advanced features of this type of software-not just the basic functions.
Assume a good attitude before adopting the technology. Your firm's culture is critical to a paperless adoption. When the attitude is positive, successful implementation has a much better chance of happening. Firms must move past old ways of thinking-that is, clinging to old processes and resisting new technology. Once firm leaders project a good attitude about technology and understand the value a true paperless tax workflow offers, the team will get on board. And rest assured that full staff support is required to make your transition to paperless a smooth one.
Apply an incremental adoption approach. For many firms, getting staff engaged and on board to adopt a paperless tax workflow remains a key challenge. Humans have an innate resistance to change, which is why introducing a new paperless workflow in small incremental pieces is ideal. Through a phased approach, a firm is able to identify and correct issues prior to a full-scale rollout. Lessons learned early on can be applied as a firm moves forward to ensure smoother adoption in future phases and mitigate disruption among staff. With a phased approach, you can slowly build acceptance among staff as your adoption moves forward.
Let key team members in on technology decisions. Open up the lines of communication and let your team know what technology you are considering. You will find that input from IT and your more tech-savvy staff will be helpful. You will also find that adoption of new technology is far more successful when staff has been clued in from the beginning.
Consider each of these key best practices before moving ahead with your paperless tax workflow. Adoption of a major process takes a lot more than you might think. By assessing your own readiness, you can identify areas in need of improvement and potential pitfalls. With this information in hand, you will be better prepared to move forward with your firm's implementation of a complete paperless tax workflow.