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Started with Paperless office

As a first step towards paperless office management, we have scanned all the tax files of our clients. All future correspondence and workings will be in PDF and attached to existing PDF files. We are using File Center software.

However, we are not sure what we should now do with the existing paper files. Should we just discard them, especially the ones which contain mainly the correspondence and other information which we would have in Excel/word or other software? However, there are important original documents in the files- P60s, P45s, dividend vouchers, bank interest certificates, CIS vouchers, Completion Certificates, mortgage agreements, HP and asset purchase documents etc. Originals of these may be required by clients. So I guess these will need to be removed and sent back to the clients. However, due to the high no. clients and files to go through, it is going to be a time consuming and costly task.

As per HMRC guidance, records need to be kept at least for 5 years from the end of filing date. On this basis, can we destroy everything up to 05/06 tax year, including the some of the above mentioned documents? We are shortly moving to our new premises where space is premium. Therefore we need to take a decision on what to do with the old records.

Furthermore, a lot of clients are now ex-clients. Do you think it is still necessary to scan their files?

We would like to hear the experiences and suggestions from other practitioners who have undergone this before.



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07th Feb 2012 11:51

Be Pragmatic!

In the vast majority of projects I've been involved with, the costs of 'back-scanning' old records are simply not justifiable.unless you have very specific pressures.   Examples I've encountered included:

A firm who calculated they could sub-let an entire floor of one of their offices with the extra space gainedA firm who was moving, and saw an opportunity to move to smaller offices if the files didn't have to come along (your situation?)A firm who really wanted to convert their filing room into a nice boardroom for client meetings

In the absence of a short-term goal such as those above, the most common approach is to let the paper files fade away at their own pace.   A lot of firms perform routine 'thinning' of client files anyway, so once you stop adding new stuff on the front, you will find that the files just get thinner and thinner as they age, until you end up with maybe a single filing cabinet for the small number of items that must legally be held as paper originals.

I tend to recommend that incoming post is kept for at least six weeks after scanning - to ensure that errors and omissions can be corrected before anything goes for destruction.  These days, however, that really doesn't amount to very much - again maybe a single filing cabinet.

Those key documents (P60, P45, etc) are the property of the client, and not yours to dispose of.   If you want to do a 'clear out' then they need to go back to the client (or be destroyed on client agreement). It helps to have a section in your engagement letter that sets out your policy on retention of client documents?   ("Unless instructed otherwise we will destroy all documents more than ten years old" - that kind of thing).

If you are under time pressure, then there are specialist companies that can carry out bulk document scanning - returning everything back on CD (or whatever) in any format you prefer - so if you wanted colour PDFs organised by client code, they can do that - although the costs rise if your instructions get too elaborate.  You'll need to compare the costs of taking the files to your new office verses the costs of scanning them.




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I didn't back scan anything ....

I will just leave it in the cabinets until the time limit is up and get the whole lot shredded in one go.

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07th Feb 2012 17:32

We didn't do it straight away, but we eventually scanned all old working paper files for cases who were still clients.

It was a summer task (project is far too grand a word) for our student/receptionist (aka my daughter)  It gave her something to do, and didn't interfere with other work, and it didn't really matter how long it took

Accounts files are generally easier than correspondence files as they don't usually contain documents that are client property, such as those referred to in the OP.  It's proved invaluable over the years as even now I can access files from the 1990s without moving. 

We even scanned the old correspondence after a year or two.  Again a low key exercise - if I picked a file up, it was only a few minutes to skim through and identify anything that we couldn't destroy.  Once that was sorted the file could be scanned and shredded.  Some files were never scanned - they just reached the end of their natureal life and were disposed of.

It really is quite nice when you finally realise that although you still have filng cabinets, there are no files in them.  Spare computer bits, software discs, backups, cables and the like, but no files

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