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Monday, Mar 27, 2023

For Some, The Paperless Trail Leads To More Paper

In 2003, the American Institute of Certified Public Accountants laid out a standard by which accounting firms could measure their progress toward becoming paperless offices. In 2009, the idea of going paperless for the sake of going paperless seems quaint to IT professionals at accounting firms. “My perspective is that it received a lot of attention ten years ago when there were all these new technologies,” said Shawn Ivey, director of technology strategy and architecture at Grant Thornton, LLP. Ivey oversees all of the company’s IT operations, including those of its Woodland Hills office. “People talked about the paperless office for many, many years, but it’s rare that you’ll hear the standalone term ‘paperless office initiative,'” he said. “But having been a tech guy and followed the technology associated with this concept it’s kind of a pipe dream to be literally paperless.” Yet, Ivey said, Grant Thornton has tried to reduce the amount of paper it uses as part of an overall greening of the company, which, he said, has been going on for many years. “It’s an ongoing effort.” The difference between the “going-paperless” movement of the 1990s and the effect of paperlessness is just that: It’s an effect. “The explosion of SharePoint and other collaborative technologies that allow people to interact digitally reduces the amount of paper that flows around an office these days,” Ivey said. “We’ve got things like the ability to receive our pay stubs electronically. Going paperless is embedded in other types of green initiatives.” For example, said Ivey, Grant Thornton has an enterprise content management initiative, which focuses on the “lifecycle of content.” “It’s a trend of moving things into an electronic form,” said Ivey. “As an accounting firm, we’re always sharing work papers, whether it’s an audit report or tax return, we’re always receiving, generating, analyzing and archiving documents.” Not long ago, every process was executed via hard-copy paper. “That is definitely changing,” Ivey said. “Our audit practice works within an electronic environment in terms of their processes and their methodology. That side of it is almost entirely paperless.” In fact, said Ivey, any artifact (a telling term which the firm uses for paper) that gets collected is made electronic at Grant Thornton, and all other large firms. “But sometimes there are legal reasons for keeping that stuff in paper form,” he said. That’s true for the tax practice as well as the audit side of the business. In the case of the tax practice, the final product is a hard copy as well as an electronic one. Final product But, said Ivey, the paper package is not generated until the end of an engagement, when it is delivered along with an electronic version to the client. Back in 2003, AICPA recommended paperless best practices, proclaiming that a paperless office should have ” converted all audits, reviews, and compilations to digital format; converted all tax returns and tax return backup(s) to digital format; replaced their libraries with online research; used intranet sites for interoffice communication; replaced fax machines with desktop faxing; created client extranet sites for external communication; implemented a full document management system; (and) back scanned all prior year documents and eliminated file storage.” Six years on, Grant Thornton has made great progress toward all of those changes, as have many other local firms. But that doesn’t mean they’re completely paperless. “We have a policy typically that most of our final deliverables to our clients are paper, but, the actual record of the firm is an electronic record,” Ivey said. Ivey said that a lot of the company’s document-retention policy was written 10 years ago. “So, we are going through it right now,” he said. “Being human and being an accounting firm there’s a specific desire to keep what we need to keep, but we’re better at keeping things than throwing them away.” Looking at a modern accounting office, such as those of Grant Thornton or SingerLewak in Woodland Hills, what one sees tells a success story in terms of going paperless. Looking for paper Recent visits to both offices revealed environments in which, if one needed a scrap of paper to jot down a phone number, one would have to walk around and find the office-supply rooms before encountering a single sheet. Another telling sign about the progress accounting firms have made is the scarcity of file cabinets or file rooms. “Our file room is shrinking and freeing up real estate at our firm,” said Stuart Jaffe, managing partner at Encino-based Kirsch, Kohn & Bridge. “Already, it’s a small fraction of its former size. We’d like to get rid of it completely.” KKB is as up-to-speed on the paperless revolution in accounting as many firms ten times its size, according to Jaffe. “We make every document digital immediately upon receipt,” he said. “The technology we have allows for a lot more efficiency than the old way of doing things, which was entirely on paper.” At SingerLewak, some freed office space is being used for decidedly non-accounting-related purposes. “We store cokes in our file room now that we have made the paperless transition to store documents on our servers,” said Rob Krumwiede, SingerLewak’s CIO. “We have virtualized out document storage and now (its costs are) off-set by efficiencies.” Those efficiencies take many forms according to Krumwiede, and they have enhanced productivity. “We are now receiving information electronically from our clients and subsequently digest it into our CaseWare and other IT systems,” he said. “We also use other programs that lend a hand in paperless such as ProFx Tax.” No matter what they call it, “going green” or “going paperless,” accounting firms’ activity in regard to processing documents has been a boon to the IT industry. “A lot of CPAs are all looking to go paperless,” said Larry Deeder, chief technical officer for IT at ITConnectivity. “It’s kind of competitive among one another,” he said. “Still, some of the smallest firms are living in the dark ages, sending out packets to their clients with instructions to fill out the lines and send back the packages; then they have a minimum-wage data-entry person put it all into digital format; and send out the final hard copy when they’re done. While none of the accounting firms would say how much money going paperless has saved, Deeder said he knows how much he can save the most paper-burdened of small firms by instituting technology to bring them up to the AICPA standard. “I good guesstimate is 25 percent of what they’re spending on servicing each client,” he said. “Because remember, it’s not just the paper itself. It’s labor, hardware, maintenance, supplies and a lot of other unseen consequences that come along with a heavy reliance on paper.”

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