If you’re thinking that the primary value proposition of deploying an electronic document management system is the opportunity to reduce the cost of handling paper documents, then you are missing the point. While that is certainly an important benefit, the real value of a DMS solution is the opportunity to truly transform your practice to a digital model. That means that all of the information you process in your firm is in electronic form. And that means you have moved your practice to a whole new level of potential by enabling all of your information to be accessed electronically.

So let’s get a little more specific, what exactly are the key benefits for accounting, tax and financial professionals to be gained from deploying a DMS:

1.  Electronic workpapers – This benefit covers a lot of territory, so let’s break it down a little further. For those of you who do a perform a lot of trial balance based engagements such as audits, reviews, compilations and entity tax returns, there is an entire category of software referred to as “electronic work papers”. This category is attended to by products such as ProFx Engagement (CCH), Caseware and Engagement CS (Thomson-Reuters.) While these applications have some attributes typically associated with DMS, they are primarily designed to work in tandem with them to create an environment where all of your workpapers are digital.  Our focus in this review is DMS; we will address the electronic workpaper solutions in a future edition of the Progressive Accountant.

The main point here is that one of the key benefits of a DMS is to facilitate a model whereby all of your workpapers, particularly those that are not directly part of a trial balance based engagement, are managed and maintained in digital format. This provides you with better capabilities to organize workpapers, create electronic links between them and perhaps most importantly, let multiple people have access to the same set of workpapers simultaneously.

2. Digital workflows – When you transform your workflows to a paperless model you create many new opportunities to automate and streamline your procedures. In this day and age anything you can do to increase staff productivity is going to pay big dividends. Examples of some of the opportunities include routing workpaper files automatically based upon established “rules”, organizing workpaper information automatically based on its origin, tracking critical engagement data in a single, integrated electronic binder.

3. Anytime, anywhere access – Once you have all of your documents in electronic format and you provide remote access to your information system, you have established a valuable competitive advantage that will impact both your client and staff relationships. Your staff will have the ability to get their work done from anywhere they can get on-line. That translates into flexibility for them and increased productivity for the firm.  This will have a direct and positive impact on your recruitment and retention initiatives. For your clients it means the opportunity to empower them with a self-service portal to access their important tax and financial information at the time and place of their choosing.

4. Information security – The importance of effectively securing the confidentiality of sensitive client tax and financial information is growing at an accelerated pace. A strong DMS solution is a core ingredient to any serious information security strategy. You will have the ability to control who can access what information and provide an audit trail of document access.

5. Hands-free data exchange – A key benefit of digital information is that you then have the potential to capture information off those documents automatically and transfer the data to other applications, “hands free.” This means significant increases in productivity and reduced errors by eliminating manual and redundant data entry procedures. An example is a program like ProFx Scan from CCH. This software will automatically recognize key types of 1040 tax supporting documents such as w-2’s, 1099’s, etc. and organize the information properly in a PDF file and then ultimately pass key data directly to the ProFx 1040 tax software.

Small firms with less than 10 personnel are going to benefit primarily from a DMS solution that helps improve the overall organization of electronic documents and files. A DMS will help alleviate the pressure of trying to manage a growing database of files with the limited tools available from the Windows Explorer folder management system. These firms also benefit from the DMS tools that help to streamline the annotation of the electronic documents. The ability to leverage an ASP (application service provider) solution can be a real value driver for these small firms by outsourcing all of challenges associated with deploying, administering and securing the required IT infrastructure.

Midsized firms with 10 to 25+ personnel are going to be in a better position to enjoy all of the benefits of a DMS that were identified previously. These firms are more likely to be involved in more complex engagements requiring multiple personnel, perhaps even multiple offices and more voluminous workpaper files. Features such as workflow automation, document retention, remote access and document security are features that can be leveraged for better efficiencies.

Regardless of the size of your firm, the main point I would like to convey is that a successfully deployed DMS solution can pay big dividends for every firm.

Vendor Reviews

As we begin our review of DMS solutions for accounting and tax practices, we’ll try to emphasize where on the spectrum each system falls to give you a better perspective on the respective markets each vendor solution targets.

Acct 1st (www.acct1st.com)

Let’s start our review with Acct 1st, perhaps best known for its tag line “DMS for a $1 a day.” The Acct 1st pricing model is based on a license fee of $365 per user, per year.  This system continues to evolve in the marketplace to become a more mature product offering targeted directly at accountants. The user interface is well designed. One of the unique features that Acct 1st offers is the ability to be deployed as either an in-house or web hosted solution. Some firms may prefer to host internally to leverage your existing IT infrastructure investment and IT services personnel. For other firms that have limited infrastructure and IT services staff, the web hosted or ASP (Application Services Provider) model offers a much simpler deployment model. You can simply subscribe to access the system remotely.

Some of the key features of Acct 1st include:

• Customizable tool bar and document search interface using “drag and drop” technology to display your search criteria and document “hit list.”
• Private labeled version of Copanion’s scan and organize module to process 1040 tax supporting documents into an organized PDF file.
• Tic, Tie & Calculate add-in module provides a complete set of accounting and tax specific tic mark symbols.
• Direct integration with CCH’s ProFx tax software.
• Workflow functionality that allows you to define specific workflow templates that can have customized comment sheets attached for tracking preparer and reviewer notes.
• A portal module is available to publish documents for on-line client access.
• The technology platform is a SQL database which provides a more robust and flexible database design.

Cabinet NG (www.cabinetng.com/)

The primary differentiator for Cabinet NG from the rest of the field is their CNG-Books edition that is designed to integrate directly with QuickBooks. If you have a write-up practice based on QuickBooks then CNG Books could be a valuable tool to allow you to link all of your QB transactions to supporting documents. Cabinet NG is a suited more towards the smaller firm, however, if you have a niche QuickBooks practice it may be a good fit regardless of size.

Some of the key features of Cabinet NG include:

• File organization is based on an intuitive cabinet & folder model.
• You can preview files without having to launch the native application. The system supports nearly 300 file formats.
• Proprietary annotation tools are included with the software.
• The API (Application Program Interface) provides the capability to develop custom integrations to other applications.
• Document retention capability is provided by assigning retention policies to specific document types so that they can be purged from the system in bulk.
• Documents can be scanned is as TIFF (Tagged Image File Format) or PDF (Portable Document Format) files which provides additional flexibility.
• Workflow functionality allows you to establish rules for routing documents to specified individuals based upon the status.

Doc-IT (www.doc-it.net/)

This is a comprehensive solution that is designed for mid-size firms with 10 or more employees. Doc-IT offers a full range of functionality that places it as a direct competitor with other high end DMS solutions targeting the accounting market.  Doc-IT has focused on distinguishing between the use of DMS to manage paperless workflows and the archiving function. Both are handled very effectively with this robust system.

Some of the key features of Doc-IT include:

• A folder- or binder-centric approach to organizing documents and files which facilitates your ability to automate your workflows by tracking engagement related files together.
• Doc-It offers its own proprietary scanning software with the ability to “clean up” scanned images. An important feature of the scanning module is the ability to automatically recognize forms and file them accordingly.
• Integration to Caseware and ProFx Engagement (CCH) provides for a comprehensive paperless workflow for your trial balance based engagements, in addition to the integration provided with tax preparation software.
• A comprehensive workflow manager that lets you setup a workflow and assign tasks and then track the actual amount of time spent on each task.
• An integrated “Smart Scheduler” facilitates the staff scheduling process by defining a number of staffing attributes for each task in a workflow including; staff cost, client experience, client preferences and more. These requirements are matched against the firm’s personnel to identify the individuals who meet the requirements.
• A comprehensive portal module is available that provides a “public” client centric document folder and a “private” individual centric folder to facilitate organizing published documents and controlling access at the client level more effectively. The portal is designed to be separate from the document storage library for control purposes. By requiring a copy of the document to be posted to the portal, not the original document that many portals publish. This gives you an additional and important check and balance.
• Doc.IT is developed on a SQL platform.

FileCabinet CS (http://cs.thomsonreuters.com/document-management/)

This may be the most widely used DMS for the small firm market. The “CS” suite of applications from Thomson-Reuters has been very popular for many years among small accounting and tax firms. This history goes all the way back to the days of Creative Solutions. Some of the key features of FileCabinet CS include:

• The most valuable feature of FileCabinet CS is the depth of integration with the other CS applications. When you are working in a particular application, i.e. UltraTax, you can store the files directly into FileCabinet. The system will know where to file it based on the client you are working within the originating application.
• The model used to organize documents and files is based on establishing a file cabinet for each client that is organized into two categories; application specific, i.e. tax and accounting and then other classifications that can be defined by the user, i.e. correspondence, special engagements, etc.
• Integration with MS Office and Outlook is very strong. You can save a document or message in its native file format, or you can publish it as a static image.
• A comprehensive collection of proprietary annotation tools lets you thoroughly markup your documents without incurring the expense of Adobe Acrobat. ®
• FileCabinet CS provides direct integration to the NetClient CS portal application to post your documents for client self-service access.
• As with all of the CS applications you have the option of deploying them as in-house solutions, or as ASP solutions using Virtual Office CS, to eliminate the cost and complexity of managing your IT infrastructure.

GoFileRoom ES (http://es.thomsonreuters.com/gofileroom/)

This enterprise level DMS from Thomson-Reuters was one of the original CPA centric DMS solutions that was marketed to the mid–size and large firm market.  GoFileRoom originally distinguished itself from the rest of the pack because it is designed to function exclusively as an ASP solution. Today the field of competitors offering ASP solutions has expanded. Many, if not most, of the competition is now offering some form of an ASP alternative. GoFileRoom has been positioned under the Thomson-Reuters ES (Enterprise System) product line which is targeted at the mid and large firm market.

Some of the key features of GoFileRoom include:

• Intuitive user interface based on a visual file cabinet, drawer and folder model.
• 100-percent browser-based architecture delivered via ASP model.
• An add-in for Adobe Acrobat® provides an extended set of accounting and tax related tic marks, as well as a virtual calculator for applying virtual adding machine tapes as annotations.
• “Quick Launch” feature allows you highlight text in a document and transfer that information as text to automatically populate a search index field.
• An intelligent scanning module called TaxSort will automatically recognize and sort 1040 related documents during the scanning process.
• GoFileRoom has integration capabilities with many of the major tax preparation software packages, as well as workpaper and practice management systems.
• FirmFlow is a workflow module that lets you establish pre-defined workflows and personnel assignments and track the flow of the engagement through that process. A virtual binder that travels with the workflow contains all of the pertinent engagement information including documents, review notes, checklists, routing history and more.
• ClientFlow is a portal module that provides for one-way publishing of selected client documents that are stored in the DMS.

Interwoven Worksite (http://www.interwoven.com)

Worksite is the flagship DMS solution offered by Interwoven. It consists of multiple modules including e-mail management, portal, universal search, a records manager and more. Worksite is a “horizontal” solution that is designed to meet the needs of many different industries beyond accounting and tax firms. The advantage is the depth of functionality Worksite offers; the downside is the lack of direct integration with accounting and tax applications. Worksite is clearly targeted to the mid-size and large firm market.

Some of the key features of Interwoven include:

• Direct integration with Outlook through a virtual Outlook Inbox to access documents directly from within Outlook.
• Extensive search capability lets you search across metadata, status, workflow information, e-mail properties and more.
• Document Version tab let’s you view a log of all of the version updates to a document over its history, including the ability to compare two document versions to determine the differences.
• Scanning is handled through third party scanning software.
• Strong integration with MS Office and Adobe Acrobat. You can open and save files within these applications directly to/from Worksite.
• The workflow functionality includes the ability to track engagement information. Integration with third party workflow vendors is supported for more robust workflow management.
• A portal application called TeamPortal provides a two-way portal solution that lets you publish documents from Worksite directly to the portal. You can also configure the portal to support the uploading of client files.
• Worksite is based on a SQL architecture and some of the applications are developed in .NET

ProFx Document (http://tax.cchgroup.com/Document/default.htm)

This solution from CCH is one of the most robust CPA centric DMS solutions on the market. The feature set provided in ProFx Document clearly positions it as an enterprise level solution for mid-size and large firms. The strength of this solution is particularly deep for firms that use other CCH applications such as ProFx Engagement and ProFx Tax.

Some of the key features of ProFx Document include:

• The user interface is centralized on a user configurable home page that links directly to other CCH applications, as well as other applications that you have developed link to.
• You can generate bar coded indexing sheets to separate the document organization function from the scanning function.
• ProFx Scan is a scanning module that is designed to capture, identify and organize 1040 tax supporting documents. It also has the ability to recognize data on a form and transfer it to the ProFx tax software. PDFlyer is a component of ProFx scan that provides an extended set of accounting and tax tick mark stamps for use in Excel and Adobe.
• Integration with Outlook is facilitated by displaying a list of clients from within Outlook to navigate directly to the folder you want to store e-mail messages in.
• CCH has partnered with XCM Solutions to provide a workflow management tool to track your paperless engagements.
• A portal module lets you publish documents directly to the portal from the DMS. E-mail notifications will be automatically sent to clients to notify them that a new document has been published to their portal site.
• ProFx Document is developed in .NET with a SQL database architecture.

Where to go from here?

Hopefully you find this review helpful as you contemplate your options for approaching a document management solution for your paperless office transformation.  These programs have a lot to offer and there are many details that need to be considered as you research and evaluate the alternatives.  I encourage you to visit the vendor web sites to learn more about their specific products. Most of them offer regularly scheduled web based infomercials, or they will be happy to schedule a private presentation for you. This is a great way to learn about a system and in the process you will become a much more educated buyer in regards to knowing what’s available, what’s important and what’s not. Good luck!

John Higgins CPA.CITP

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John Higgins, CPA.CITP, is a strategic advisor with Rochester, Mich.-based CPA Crossings, LLC. John and his firm specialize in helping accounting, tax and financial professionals leverage technology to be more productive and profitable. CPA Crossings (www.cpacrossings.com) has extensive experience in helping firms make the transition to a “digital” (paperless) practice model. He contributes regularly to The Progressive Accountant on related topics.

John has extensive knowledge and experience working with CPAs throughout the country. He has been actively involved in working with local, regional and national CPA firms over the past 25 years and facilitated hundreds of planning sessions and retreats to develop strategic plans, technology plans, workflow design, innovative client services and more.

John is a nationally-recognized speaker and author on technology issues impacting the CPA profession, with an emphasis on transforming to a digital practice model. He previously worked as a natiional consulting partner with a top 10 CPA firm, and is the former chief executive of an accounting systems consulting firm.

John is a member of the American Institute of CPAs Business & Industry Hall of Fame and past chairman of the Michigan Association of CPAs. He is also a member of the AICPA Council and CPE Advisory Committee and received the MACPA Innovative User of Technology award.