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Scan and Organize for Good Effect

The most significant reason to use a scan-and-organize application is to make operations become more effective. “Effective” relates to the total benefits received exceeding the cost of the system and its support. Anything that creates less revenue and more cost should not be considered. The good news is that many CPA firms have already discovered significant benefits by using systems that convert paper to digital data.
Information is forever expanding and there are more documents, more regulatory schedules, perhaps multiple W-2s, income from a number of employers and so on. This rising tide of paper is pushing up against the availability of people to do the work of collecting, sorting and filing. CPAs, both partners and staff, have a growing desire to maintain a quality of life. Performing clerical activities like manually making copies or storing documents wastes high salaried individuals’ time. It increases rather decreases firm operating costs.

If you are not already using a scan-and-organize program or have been doing research, here is a current list of vendors along with information from their Web sites. I strongly recommend discussing options and ideas with your friends and colleagues. The other important item is to understand that once a selection is made; changing in subsequent years is rarely, if ever, attempted. The time and effort to make a switch can be substantial and require more than a year. This can be a particular problem when CPA firms merge their practices.

Application  Notes from Vendor Web Site
Copanion's Gruntworx
    GruntWorx Organize automatically identifies, organizes, and labels the scanned tax forms into a PDF file. GruntWorx Pro extracts data from the bookmarked documents and automatically imports the data into the leading tax preparation software

SurePrep's 1040 Scan

    1040SCAN™ is the only OCR product on the market that recognizes thousands of documents, uses hundreds of business rules, eliminates over 50% of data entry and reduces review with an organized, bookmarked and referenced PDF. 1040SCAN™ is perfect for those returns where outsourcing is not an option.

Intuit's Document eSort
intuit logo
    The Document eSort service recognizes all sorts of scanned tax documents and organizes them into a tax return-ready electronic file. Tax professionals can access and view the organized source documents directly from their Lacerte or ProSeries tax preparation or one of Intuit's Document Management System applications.

CCH's ProSystem fx Scan
cch logo
    "the process that extracts data from 1040 client source documents to be imported directly into the return – ProSystem fx Scan, ProSystem fx Tax, and PDFlyer will provide a complete paperless 1040 preparation solution for your firm." At this week's CCH User Conference, the company said the latest version of Scan, which ships this week, will have more forms and a simplified autoflow workflow.

ThomsonReuters UltraTaxCS
ThomsonReuters GoSystem RS

thomson reuters
    The most recent additions to FileCabinet CS have focused on workpaper organization and the addition of optical character recognition (OCR) capabilities that enable automated population of client 1040 returns processed using the UltraTax CS professional preparation system. This year, Thomson Reuters debuted the optional Source Document module, which offers form recognition, extraction of form data and the ability to integrate with the tax package. This new module is specifically geared toward use of the automatic population feature, since it does not result in compiled, organized and bookmarked PDF or other advanced digital workpaper output, but instead stores the data in a client folder as individual items.

XCM Solutions
XCM Workflow Management Software
XCMessential for Small Firms

    This innovative program automatically creates a folder with the client’s name and SSN when you scan the client’s W-2 or 1099. No more labeling, sorting and filing paper folders! And when you scan additional recognized documents for existing clients, the AutoFile feature identifies the client and selects the corresponding folder for storage.

TaxWise Scan&Fill with Document Manager

    The powerful new forms recognition tool easily reads the data on most W-2s and 1099s. And you can reduce data entry by exporting the data directly to your clients’ tax returns.

ATX Scan&Fill
ATX Document Manager,

atx logo

Reads data from many of the most common W-2 and 1099 income statements and automatically creates a digital client folder labeled with the client's name and SSN. The AutoFile feature recognizes existing clients on W-2s and 1099s and automatically selects the corresponding client folder for storage. Say goodbye to labeling, sorting and filing paper folders!

Equipment and Resources

Besides the software, there are several elements that are just as significant to this process. These elements include:

1.    Full partner commitment and support
2.    A plan
3.    Complete analysis of scanner needs and implementation
4.    Implementing dual or triple monitors
5.    Documenting your processes
6.    Sufficient computer horsepower, data storage, network bandwidth
7.    Sufficient electrical power and outlets
8.    Sufficient communications bandwidth
9.    Proper backup procedures
10.   Never, ever, try to convert to firm-wide paperless overnight

None of the above should be a surprise. Here is some information about equipment resources.


First, firms need to have sufficient computer horsepower. Data storage needs to be analyzed to enable the storing and indexing of the tax data and the application programs, over and above all other resources that the firm needs for computer technology.

Each computer workstation, laptop or desktop, needs at least two displays, three is better. The display needs cannot be met by installing one 30-in. monitor, which is too expensive and will not provide sufficient support. Two to three 17-in. to  20-in. monitors will be very effective.

Each office should have at least one scanner to convert paper to digital data. How many and how fast these should be depends on your volume. Plan purchases to handle the volume expected over the next four years. Do not shop for a scanner at your nearest big box store, such as Best Buy, Wal-Mart or Costco. Expect to spend more than a thousand dollars.

Very fast, high-volume scanners can exceed several thousand dollars. You may not need that much throughput. Take a look at the following:

•    Fujitsu ScanSnap S1,500. It is the most popular scanner used by CPA firms. $500 to  $800.
•    HP ScanJet. Make sure you select a model with a document feeder. $500 to $1,000.
•    Plustek SmartOffice PS282 with Kofax/VRS software. This unit can scan thick papers and plastic cards. Software is bundled. $400.

Where the firm places the scanner will be part of the assessment process. If scanning is done by the staff (not recommended) or by administrative personnel (recommended) then the scanner should be in proximity to the correct parties.

Multiple Monitors
Add a second and/or a third monitor to each computer location. Staff who work at home, need multiple displays also. Dual-monitor arrays from Double Sight (www.doublesight.com) is one option. Purchasing additional LCD monitors is the second choice. Keep in mind that when adding a third monitor another video card or splitter is needed. They are not expensive but will require installation and testing.

Making the Decision

Any transition to new procedures requires significant management direction and involvement. People who have an attachment to large stacks of papers will experience some stress when learning how to use digital data files. But many firms have lived through their change to paperless successfully with lots of positive feedback from staff and clients.

Of course, any transition requires management to establish ground rules. When you start out on the road to a paperless workplace, remember that this is no simple process. There is a lot of planning to do and a lot of decisions to be made.

1.    Assess what you already have installed and operational
2.    Start with a preliminary list of needs
3.    Map the difference of 1. and 2.
4.    Assign responsibility and accountability
5.    Review and assess options
6.    Make a preliminary decision
7.    Determine equipment needs; resources already available, new resources needed
8.    Determine space requirements on each desk and other server equipment
9.    Determine power outlet requirements including surge protectors and circuit breakers
10.   Develop a budget for all phases of acquisition and implementation
11.   Expand budget two to four years out
12.   Acquire one or more quality scanners
13.   Implement dual monitors firmwide
14.   Develop training materials
15.   Train everyone: partners, staff, administrative
16.    Inform and alert clients

As this process evolves, it is essential to review and update all standards and procedures. For example, a digital environment requires managing the digital files in addition to any related  paper that may accompany a tax return. This includes updating the document retention policy of both digital and paper documents.

A Few Final Words

Implementing or upgrading your paperless processes will create a lot of benefits in the first year of implementation and for all the years ahead. When going down this path:

•    Do not go faster than the firm can handle. This will allow partners, staff and administrators to become familiar with the new procedures, benefits and risks.
•    Do not attempt to scan and index documents from previous years. Going back can be wasteful, especially if these returns will never, or rarely, be accessed.
•    Move from testing to rolling out solutions firm-wide in a managed series of steps.
•    Make sure some member of the firm is responsible and accountable for each step.
•    Never lose sight of the goals and benefits for having a functioning paperless process.

If you need help it is OK to bring in outside resources to supplement the skills and expertise available with your firm. Amateurs should never attempt this effort without adequate supporting assistance.

And do not forget to pause and rest every so often throughout the roll out and when full implementation completed. You will need focus and energy to assist clients who will value what you can do for them.

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