Document Management Gets Hot

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By Robert W. Scott

Pleasanton, Calif (December 04, 2004) – This may not be the Year of Document Management. Rather, it may be the Year of Talking About Document Management. “I don’t see firms pulling the trigger, and they should be,” says Tom Davis, owner of Tom C. Davis & Associates of Valdosta, Ga. ” A lot of firms are doing things like typical CPA firms, they are talking about it, they are aiming, they are aiming, and they are aiming.”

Whether firms pull the trigger or not, document management has been the hottest technology topic over the last year. It has the potential to radically reshape how accounting firms work and how they think about what a document is. The buzz is likely to intensify as more firms examine and implement systems that are, if not designed to make paper documents disappear, at least make them easier to handle.

Part of the resistance, Davis says, stems from the fact that systems are more expensive than firms would hope when they first start investigating a purchase. “We thought we would be able to pay $100 a seat,” he says. “It’s much more than that.”

The experience of Zvi Gold, a partner at Goldstein Schechter Price Lucas Horwitz & Co., a Coral Gables, Fla.-based CPA firm, is that it can take a lot of convincing to get accountants to pull those triggers.

“I’ve been following different programs and improvements for more than five years,” says Gold. When he began leaning towards the use of the Internet-based GoFileRoom, “It took a year to get all the partners to agree that now is the time,” he continues.

Partners do get nervous about spending money, and with GoFileRoom, the installation and training for the system costs about $11,000 to $12,000 for the nearly 60-person firm, with monthly fees at roughly $3,700. Gold says the savings in paper costs and storage will make up for that.

But like many other accountants who have implemented a document management system, Gold says that improved client service is probably the biggest benefit.

“It’s the ability to pull up documents from your computer, the ability to look at last year’s documents without having a lot of last year’s files on your desk,” he says. And it’s the ability to give clients an answer while they are on the telephone, instead of having to go to the file room, and then return the clients’ calls later.

However, choosing document management systems is not an easy process.

There is a range of prices and an array of products with different approaches that address simple needs in managing paper all the way to handling all of the document needs that a firm has and changing the way it performs work.

It’s the latter concept that firms must grasp, says L. Gary Boomer, owner of Manhattan, Kan.-based Boomer Consulting. Document management, he continues, covers a wide array of information issues.

“The issue facing firms will be the realization that ‘paperless’ is really content management, which includes document management, records management, knowledge management, email management, and client portals,” says Boomer.

“Firms will need to adopt and adhere to better standards, policies and procedures, as well a create a training and learning culture,” says Boomer.

Document management will also have an impact on the hardware firms acquire. It’s already producing a boom in monitors, as many firms turn to giving all users dual monitors so they can compare documents onscreen.

The adoption of twin-monitor systems is designed to keep the use of paper down, notes Joe Harpaz, chief technology officer of Immediatech, which markets the Internet-based GoFileRoom system.

“It’s about what I call screen real estate,” says Harpaz. “People can’t view enough of the document on the screen, so they print. Generally, accountants compare things. To compare, you have to be able look at two things at once.”

Pricing for systems also varies widely. For example, Docutrend Imaging Systems, a New York-based company that is a sister to accounting software reseller Net at Work, handles a variety of packages that start as low as $15,000 to $20,000, including consulting services, on up to six figures

Such systems can save money for firms that may be paying $40 a square foot for office space in midtown Manhattan to store paper, says Docutrend president Aaron Rubin. But money may not be the biggest hurdle to CPA firms that want buy. “The biggest barrier the CPA firm has is the culture. They are so ingrained in the use of paper,” says Rubin.

Rubin’s firm handles a variety of front-end capture applications, such as Kofax and Verity TeleForm, and it also sells a suite of modules for content repository from Documentum.

Some of the biggest benefits of using the Documentum eRoom system are the ability to know where documents are and to work collaboratively. “They may have one accountant working on a client file and somebody needs the same information,” he says.

The Workpaper Approach

Three important players in the tax and accounting market, CaseWare, CCH Tax & Accounting, and Creative Solutions, have arrived in the document management business via workpaper software.

CCH’s ProSystem fx Engagement, CSI’s Engagement Manager, and CaseWare’s Working Papers all manage workpapers, and many firms have been hoping these applications will handle a wider range of needs-but there are those who believe the workpaper products can’t meet many needs.

“Many firms were led to believe that a workpaper container such as CaseWare, Engagement Solution, and CCH’s Engagement fx were document management solutions,” Boomer says. Firms will need systems capable of efficiently managing static and dynamic documents, as well as a growing number of emails.

However, these are not mutually exclusive approaches, notes Dwight Weinman, president of Toronto-based CaseWare International. His firm’s Working Papers interfaces with document management systems, such as GoFileRoom, Lotus Notes, and iManage from InterWoven. “Our approach is to put a big API [application programming interface] to those,” he notes.

Documents can be checked in and checked out of GoFileRoom, while the user is operating in CaseWare. Similarly, users can search GoFileRoom and automatically update documents stored in that system without exiting the CaseWare application

Like many applications, Working Papers utilizes the Adobe Software Acrobat system. In this case, it includes the ability to annotate documents, not just view them, as many users can do with Acrobat Reader. “You don’t have to buy Adobe Creator,” notes Weinman. Working Papers starts at $499 for a single-user system.

Jack LaRue, vice president of marketing at Dexter, Mich.-based Creative Solutions, says his company sees a need for different approaches for different kinds of documents, which it addresses with Engagement Manager, a workpaper application, and FileCabinet Solution, a storage system.

“We see a distinction between the tool sets needed to manage dynamic documents and work in process, and the tool sets you need for static archiving,” says LaRue. The former is handled by Engagement Manager, the latter by FCS.

CSI has more than 10,000 firms using FCS, which stores documents natively as Tiff files.

CSI is also working to make FCS more accessible from within its tax and accounting applications. Previously, users have been able to open document files from with UltraTax, but they had to exit other CSI applications in order to access FCS. This year, users are getting the ability to have access to document files without exiting accounting applications.

FCS, whose pricing starts at $1,250, stores documents natively as Tiff files, but they can be transferred to PDF format and are emailed that way.

FCS, in combination with other paper-saving methods, has helped the Woodbury, Minn.-based CPA firm of Stenseth & Samuelson reduce its paper consumption by 70 to 75 percent, according to partner David Stenseth. Paper savings, however, are not the only benefits the firm has realized since implementing the CSI product for tax year 2000.

“I do a lot of work off-site and my wife also has a full-time job,” he says. “Often, I’ll stay up and get our kid on the bus. I may not get to the office until 9:30 or 10 o’clock.” Accessing FCS via CSI’s Virtual Office, Stenseth has access to the documents he needs.

In the first year, Stenseth’s firm scanned only tax documents. By the second year, it was scanning and storing all documents, although “we have not gone and scanned everything back to the turn of the century,” he says.

The firm is also delivering documents to clients via CSI’s NetClient Private portals. That enables end users to access documents stored on a secure Web site.

“I have one board of directors that I don’t think has ever had a delivery of financial statements via paper,” he continues.

Stenseth also likes the pricing, which starts at $5 per month per client. “Anything for portals and document presentation is on a per-incident basis,” he says. “You don’t have to pay for the whole software and figure out how you are going to justify it.”

On the Web

Although CSI has its Virtual Office, GoFileRoom remains the only Internet-based document management system available to CPA firms. The Immediatech system is not only used by accounting firms, it is sold by firms who participate as Immediatech resellers.

The latest enhancements include a record retention component.

“There is a big issue trickling down from Sarbanes-Oxley,” says CTO Harpaz. “The feature addresses issues that users face such as how do they ensure when the audit files are Excel spreadsheets that they are locked and read only and that they haven’t been altered? And then, when their lifespan is up, they are purged.”

Besides its security and the ability to retrieve documents via the Web, firms also like the pricing, says Harpaz. “Our clients pay a fixed fee and that is it,” he says. Subscriptions start at about $700 per month for a firm with five to ten users.

Goldstein Schechter’s Zvi Gold says one advantage of being Web-based is that GoFileRoom is simple to administer. After scanners were installed and staff was trained, “there was nothing else we had to do,” he says. “I don’t have to have my own IT people maintain it. As far as the software security, I don’t think we can provide that level of security.”

However, it won’t be long before other products join the Internet club. CCH Tax & Accounting, which just purchased the SIAN system from Atlanta-based accounting firm Habif, Arogeti, & Wynne, plans to have its application on the Web around 1996.

That will be easily accomplished since SIAN, which will now be marketed as ProSystem fx Document, is written on the Microsoft .Net platform, according to Dan Simms, HA&W’s managing partner and CEO.

“We have full access inside the office and outside the office,” says Simms. For many firms, it’s a matter of becoming comfortable with having documents stored offsite.

Like Boomer, Kevin Robert, president of CCH Tax & Accounting, believes that the workpaper products do not have enough functions for many firms. Although products such as CCH’s own ProSystem fx Engagement are fine, they have their limits.

“There is a very heavy paperless bent to Engagement,” says Robert. “It can store tax documents in PDF form. That’s fine and good within the application, but once you move to where the records are locked down or you have finalized your workpapers, that’s when you want to use a document management approach.”

Simms says that the workpaper applications cannot perform all of the tasks required to manage accounting firm documents.

“The problem is that there are so many more documents that you have to control and maintain and manage the life cycle of those documents,” Simms says. He continues that ProSystem fx Document “allows you to better control and assess risk management from the document point of view.”

ProSystem fx Document will work with Engagement, and will also be designed to work with CCH research products, such as CCHHand. Robert envisions practitioners being able to research documents during sessions on the CCH research products.

Robert W. Scott is Editor of Accounting Technology and can be reached at