Paperless practice: Automating the tax workload

If you’re buried under paper documents and tax returns at this time of year, there is another way, writes John Stokdyk.

Document management specialists often wonder why it has taken so long for paperless techniques to migrate into the tax departments of accountancy firms. So much of the tax workload is predictable - particularly during the busy Self Assessment season in January - and relies on certain recurring types of document that the activity should be a natural for automation.

From evidence gathered in AccountingWEB’s Document management discussion group, the realisation is finally beginning to sink in. Paperless tax processing is no longer the preserve of just the big firms - even sole practitioners are now enjoying the benefits of working on tax documents and returns electronically wherever possible.

At first glance, the “brown paper job” is a challenge for scanning and sorting and documents typically come in dribs and drabs - P60s in April, P11D in the summer, plus bank and dividend statements, pension contribution records and all the other information that arrives at random intervals.

AccountingWEB member Kevin Salter, author of a guide to paperless practices, points out that often tax teams will dump the documents and data they receive into a client file and forget about it - anyone else wanting to access and use the file will waste a lot of time trying to work out what they’ve got and what to do with it.

Paperless tax processing at work

When information relating to clients’ Self Assessment returns arrives at Salter’s firm Glover Stansbury, it is immediately scanned and forwarded to the manager for action, with a link copied to the partner, so that only one version of the document is retained. According to Salter, this avoids the situation where letters end up sitting unopened in partners’ in-trays for several weeks.

Once a return is ready to go out for approval, it’s published in the firm’s online portal for the client to view, and simultaneously stored in the in-house document management system. If any changes are required, the form is altered and refilled in both places. The portal application includes an approval tag, so when the client views the online PDF, they can click a button that indicates someone at their internet address approved the document at a specified time and date - fulfilling HMRC’s requirements for electronic authorisation.

“Portals save time, cost, hassle,” says Salter. “It’s a part of our quicker and more efficient tax processing. The biggest advantage is the reduced output. Returns can run to 40 or 50 pages sometimes. With a portal, there are no photocopies any more - just electronic copies.”

Paperless authorisation

While Glover Stansbury is happy to accept the approval record stored in its online portal, some AccountingWEB members have voiced concerns about electronic authorisations. Document management discussion group Charles Verrier responds: “You don't need the signed pages - an email is fine. While there are ways of faking them, the practical reality is that emails are accepted by (Civil) courts every day of the week.

The IR Mark issued by HMRC is based on an algorithm calculated from the data contained in the version of the return that clients approve, he explains.  “As the mark changes when any of the return's content changes, you can use this to show that your filing was identical to the copy that the client saw and approved.” Using the the IR Mark number as the identifying reference is good practice, particularly if several versions have gone to and fro.

More paperless office resources on AccountingWEB.co.uk

For a more detailed examination of these issues, download Charles Verrier's whitepaper for CCH, 'Realising the next wave of benefits'.

Continued...

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Comments
TaxTeddy's picture

Digital Nirvana    4 thanks

TaxTeddy | | Permalink

Before I go any further I should qualify these comments as I am a sole practitioner and a Mac user (although it should be just as easy for PC users) and so I have complete control over how I arrange my working environment.

I have looked extensively over the past few years at various document management solutions and being a sole practitioner I have been a little concerned about costs. This has forced me to think more obliquely, with happy results.

My only cost to take my business (almost) entirely paperless has been a scanner with a document feed (about £200). Other than that, it has become simply a question of changing my working habits.

When clients send their tax papers I just scan them and save them as PDFs which are then stored on my iMac within the client folder for that particular year. More often these days the clients will be willing to send documents as e-mail attachments, thereby avoiding the need to scan. Of course, tax returns are produced as PDF documents and almost all correspondence is by e-mail so there is no paper trail.

The same principle applies to client accounts - there is nothing which cannot be stored as a PDF (rather than having to keep a hard copy) other than signed copies of accounts. During accounts preparation I keep the physical working file but when the accounts are signed off, like all other files it is scanned and retained as a PDF. Working files are easily shared with associates by using DropBox.

My tax library is entirely electronic and any technical “bits and pieces" are either stored as bookmarks in my Firefox browser or kept as documents within Evernote. My diary and work schedule is kept electronically with BusyCal.

As I backup using Apple's Time Machine and also into the cloud with CrashPlan there is no chance of losing a file or document.

The benefit of all this is that having finally managed to abandon the “safety net" of physical files I now have a very tidy office, if not a tidy mind.

I have described my “e–office" in the hope that it might inspire others to work electronically at low cost and to reap the benefits. You don't need to spend a lot of money - you just have to question the way you work.

 

ksalter's picture

Document Management    1 thanks

ksalter | | Permalink

There are some potential problems with client folders - they can become unmanageable quickly - and people can easily "do their own thing" - no consistency. Sometimes folders can be inadvertently moved too.

My publication - "Practical Guide to the Paperless Office" - was £40 -  is now FREE - available at http://bit.ly/freepaperless

 

 

 

torbenhalvorsen's picture

PaperLess Practice

torbenhalvorsen | | Permalink

There certainly does seem more interest in Accountancy practices being free from the burden of paper within their organisation.

Consistency and security as mentioned by Kevin Salter are essential and it is important to be able to manage your risk to data going missing.

Some key points that we have seen being considered by Accountants in practice are:

  • Restriction of access to clients data per user
  • Restriction of  access to a document per user
  • Digitise on receipt - then process on screen
  • Avoid anything that duplicates documents either digital or paper
  • Keep an audit trail, who did what on which document
  • Collaborate with your clients online
  • Integrate your solution with other applications (Accounting, Tax and CRM)
  • Review all processes in the light of new technology
  • Use technology help rather than make life more complicated

Phil

Accounting the PaperLess way™

Issues not relevant to sole practictioner

Adrian Pearson | | Permalink

@Phil and @Kevin,

In your responses to TaxTeddy you have ignored the most important fact - that he (?) is a sole practitioner. Since he only needs to worry about himself and has no other people to do their own thing, the standard issues you raise are not relevant.

I appreciate that larger firms need more control, of course. And, yes, folders soon have their limitations with multiple users involved.

torbenhalvorsen's picture

Issues not relevant to sole practictioner

torbenhalvorsen | | Permalink

Adrian, I agree with you totally, my comments were in the wider sense a response to John's article.

I do believe though that sole practioner's face different issues in regard to security and back up, especially if working at home for instance; and I am sure that these subjects have been adequately covered in various threads.

Phil

Paperless offices

Asimpsoni | | Permalink

Personally I can't understand the drive to make what is essentially a paperbased environment paper free. What I think most practices are in need of is a paperless archiving system which to my mind is a very different thing.

In the office I work in we keep the paper based tax return records but scan them once the process is complete so we know we have the full and final record.

My biggest gripe with the paperless file is that it is imperative to have two screens and I can't get the partners to understand this and hence the  IT budget to pay for it. To me it is a no brainier - when we had paper files we could look at the file on our desk and then refer to the screen. Take away the paper file and you have to move it to somewhere where you can look at it and something else simultanousley - otherwise you have to print off the things you need to refer to which seems to defeat the object.

Finally I have to question whether the human eye reads as effectively from a screen as from an open book - I still have to be convinced that the way the eye travels over pages is well suited to a sinlge page flat screen. Also the inability to flick between pages and points of a file traditionally held open by the good old fingers is lost on a computer.

I am no luddite but I do think that the migration to all things computerised isn't necessarily always well thought out.

 

Paperless Offices

larsswann | | Permalink

I am mac based and operate my practice through apple macs with a remote desktop connection hosted by Hosted Accountants (www.hostedaccountants.co.uk). This has been running very successfully and the support I recieve from my hosting provoder is second to none. I had a problem at 10:30pm on a sunday evening and it was fixed by 1am monday morning.

All my systems are hosted on the cloud and this includes office, BTC Software (www.btcsoftware.co.uk), Sage, Quickbooks, Moneysoft and Virtual Cabinet. I even have the ablity to access my software on mty ipad which has come in useful when client want me to have information instantly at hand. 

The virtual cabinet software is excellent and also includes a portal which give my client access to the files that I include within it. Moving the fiels to the portal is simply click on the file and then click on the send to portal option. It also give you the option to retract items from the portal as well. Lindehouse Software (www.lindenhouse.co.uk) also have introduced the ability to get documents signed through the portal and I have been using this for my tax returns this year. This has meant that I have been able to get tax returns back a lot quicker and I am averaging a turnaround time of 147 minutes from completion to signoff. In fact for the first time in a number of year I completed my last tax return on 15th January 2011. So I now have time to play a bit of golf and deal with the more proactive side of the practice.

 

I have compe to the conclusion that accountants need to start to think about adopting cloud based and virtual hosted desktop solutions otherwise they are in danger of being left behind the more proactive practices. 

ksalter's picture

Paper based environment

ksalter | | Permalink

A comment above questions the drive to have a paperless environment. Ask those that are paying for offsite storage of files, and paying to retrieve them, a problem increasing all the time, or ask those that have gone paperless, including all the old files and freed up rooms and now let them out to generate income.

With 6 years use, we now very rarely need to go to old files (which pre-date the document management system) and certainly the last 6 year's data is all to hand.

 

 

Hosted Desktop: Love the Idea but not Brave Enough

chatman | | Permalink

As a sole practitioner, I like the idea of a hosted desktop but it is a massive step to take and I worry about all the implications that I have not thought of.

I like the idea of being to travel without my laptop (just a cheap netbook); I always carry my backed up data and programme discs in a separate suitcase and have my data backed up online too, but a full restore on a new laptop takes a long time, and that assumes I don't lose  the programme discs at the same time.

On the other hand, when my internet connection goes down (I live in a developing country) I can usually find enough work to do without the connection in the mean time without having to go to an internet cafe. With absolutely everything hosted I could not do this.

How does web browsing work? I assume you access your hosted desktop via a browser, but do you do your other browsing on the local browser or a hosted one? If you are on the hosted desktop and you use Alt+Tab does it switch the programme on the hosted desktop or the local one?

Good to hear from larsswann about it.  Would be great to hear more people's experiences, especially including any negatives, and especially from people using Windows PCs. How about an AWeb article on hosted desktops?

Hosted Desktop: Love the idea but not brave enough.    1 thanks

larsswann | | Permalink

HOsted Desktops are accessed vi the remote desktop connection (RDC) and are more reliable than web browesers. RDC also has the ability to print to your local printers and scan to the hosted desktop as well.

 

Essentially there is nothing you cannot do on a remote desktop that you can't on a normal computer. The added advantage is that the hosted solution back up your data for you at dfference location and should you leave your laptopn on a train or it gets stolen then you client data is not compromised which would cause you some quite big legal issues.

feel free to conatct me at lars@bean-counters.biz if you wish to talk to me direct about the cloud, hosted environments and document management.

 

Thanks Lars

chatman | | Permalink

Thanks Lars. By the way, do you know how and where they do their backups? I wouldn't want to trust my data to them without knowing this.

Does anyone have anything bad to say about hosted desktops?

chatman | | Permalink

Does anyone have anything bad to say about hosted desktops?

...

Trevor Scott | | Permalink

This topic comes up time and again. It seems some have a self-interest.

Scanners do not necessarily pick up everything from a document, if it is possible or practical to copy some documents at all, so it is impractical and unprofessional to ignore such concerns when attempting to achieve a paperless office.

As for Cloud computing etc, if you give up control of something vital don’t be surprised when you can’t work because essential info can’t be accessed.

 

ExSync's picture

Hosted Cloud Versus My Cloud

ExSync | | Permalink

Hosted services are great as low cost solutions. However, they are dependant on connectivity and the availability of the service providers.

We have opted to build our own cloud by taking rack space to host our own servers/desktops storage and telecoms on a stringent SLA. The system allows us to connect in to the system from anywhere and on any connection.

We are longer be reliant on office broadband connections to get to our data, servers or phone calls.

This comes at a price, but it delivers as near 24/7 computing as a small business can afford and we retain control and 24/7 access 15 minutes from my home.

The alternative is to be lost in a mass, cheap as chips cloud that comes with all the associated risks of the company kept, by Google, Amazon or other mass cloud providers. We certainly would not entrust our data to them. When on their public IP addresses everything you can imagine passes.

We know everyone who has access and we control it. I am not comfortable or trusting enough to let cost dictate the quality and integrity of the people who control access to our data.

The bottom line is always "I would  rather explain the cost of excellence than apologise for something less" or "you gets what you pays for"

 

torbenhalvorsen's picture

Paper Free or Less Paper

torbenhalvorsen | | Permalink

@asimpsoni I think you make a good comment about the expectation of a paper free environment.

It is a conversation we have many times, as our expectation is for less paper, which means saving time on locating files, and also processing a digital image in preference to always being attached to your paper files whilst involved in a business process.

I, and many others, work happily with one screen, two screens does have its advantages, but tends to come after you experience just how much more efficient it is to work with digital images rather than the paper based systems and processes.

"Scan and Archive" is far less efficient and offers lower ROI than "Capture and Process" as a methodology in our experience.

Phil

Accounting the PaperLess way™

I think its a great idea.

A E Scott | | Permalink

I am all for this paperless environment and would welcome any suggestions in making my practice more efficient.

I currently work on a mac with VMware to run the windows based accounting software such as VT Transaction and BTC software, if i am off-site i log into my mac to obtain information that i require using gotomypc.

how do i set up paperless authorisation and what costs are involved?

thanks 

Andrea

If you were referring to my

Asimpsoni | | Permalink

If you were referring to my post you will note that it is my belief that what is required is a paperless archive not a paperless current file.

So we seem to be in agreement! I don't need to ask about the pain of off site storage - I work in that situation myself and am more than happy to confine my old papers to the ether but would for rather work 'in -year' using the base records in a paper file.

ksalter's picture

Hosted Desktops

ksalter | | Permalink

My practice (and Financial services company) went hosted last June

Details of our move in a Kindle format here http://amzn.to/2020cloud

 

(You dont need a Kindle though - apps available for mobile devices and you can also view on your PC with Kindle for the PC- see Amazon website for details)

 

Selling AnyAnswers Responses    1 thanks

chatman | | Permalink

ksalter wrote:
My practice (and Financial services company) went hosted last June

Details of our move in a Kindle format here https://www.amazon.co.uk/dp/B005GM5VWE

You're selling your answer?? First time I've seen that on AWeb

nigel's picture

Workflow is the key

nigel | | Permalink

Understandably, many of the biggest advocates of paperless working are sole practitioners, since the logistics are so much simpler. We have good paperless files and archives, but without an apparently very expensive workflow system (100+ users over 7 offices) we struggle to actually work paperless from day to day. The notion of scanning incoming post and distributing it electronically is very attractive, but we have not seen a solution to manage electronic distribution and workflow control at a price we are prepared to pay!

Addendum: I should have added "buy in" as another key factor. To move to paperless working across a larger firm you need buy in from all users, otherwise it's going to be a complete waste of money and an enless source of frustration and friction between offices and partners!

bookmarklee's picture

Multiple screens

bookmarklee | | Permalink

I am intrigued by the suggestion that one can go paperless without acquiring at least a 2nd if not a 3rd screen for one's computer (mac or pc).

In his article John mentions that Kevin is a fan of multiple screens but no one else seems to have mentioned this.

I think the concept is that you have one screen for client data, one for tax return/accounts data entry etc and poss a third one so that you can view reference material at the same time. Failing that to keep emails and/or office management/diary etc in view.

Mark

Single Screen

chatman | | Permalink

I would like to try two screens, because everyone rants about it, but I have to make do with one (on a laptop) and I don't really have any problems; I can usually fit two documents on the screen at any one time. Would be nice to have my to-do list in view too though.

pillowmay's picture

I agree with this so how do hosted providers counter this?

pillowmay | | Permalink

I would really like to hear some strong arguments from the hosted solutions providers to better having your "own cloud" other than the obvious (& not insubstantial) cost of maintaining the IT hardware and software.

I work in a rural office and in my last practice (also rural), we quickly ran out of bandwidth with a "local cloud" and also VOIP phones as the practice grew in numbers.  Therefore, I would be hesitant to rely on hosted solutions due to the size restraint of current bandwidths. There were also sometimes connectivity issues although actually not that frequently but it was still handy to be able to drive 20 mins down the road when this did happen and log on physically to continue work.

Hosted Accountants Ltd's picture

Benefits of hosting

Hosted Accounta... | | Permalink

Hi Pillowmay

Good question. Hosting is not for everyone, but there are clear benefits (and cost savings) for a modern thinking practice. These are the top 5 reasons based upon feedback from our users, which, I should note, are generally small - medium sized UK practices:

(Declaration - yes we are a supplier of hosted solutions to accountancy practices!)

  • As discussed, mitigate or remove new hardware costs, particularly servers.
  • Reduce the need for local IT support which can be expensive and is often only running basic tasks and updates.
  • Spend zero time on compliance updates - we update your IRIS, Digita, BTC, Sage, etc applications for you as part of your set monthly costs.
  • Allow subcontractors access to live data and work in collaboration. (obvious)
  • Control IT spend - fixed monthly costs essentially cover a virtual server and machines, plus updates, support and backup. You just need average devices and an internet connection.

You raise an interesting point regarding bandwidth. We have very few problems with this but are always happy to offer a "Comms audit" to reference your line speeds and equipment with data from your local exchange. Where necessary we will make suggestions on kit you may need.

We have however trialled 50 users at once on one 6MB line and this worked absolutely fine. There is less data transfer than you might think. VOIP however, and anything graphical (streaming or video calls) will add to the strain if not managed correctly.

By all means PM me if you have any questions.

Dan

0800 440 2282

www.hostedaccountants.co.uk

 

 

www.hostedaccountants.co.uk

larsswann | | Permalink

I can highly recommend hosted accountants I am on their system and the service is fantastic. Their support service is second to none. I place a support ticket at 10:30 pm on a sunday and the problem was resolved by 1am.

In terms of Bandwidth I have never had any problems. I have even had their solution running on my ipad2 using the Vodafone 3g Network on a golf course. There was an article about this on accountingweb last week.

Lars Swann

The Bean Counters

www.bean-counters.biz

01784 730141

Finger

Sherman Holter | | Permalink

@asimpsoni

Has anyone tried having the "read" monitor panel fitted somehow to the underside of a glass desk top.

To me this would seem to be the best of both worlds; two monitors and still being able to work the traditional way with the finger.

 

jdstone's picture

Two screens with a laptop

jdstone | | Permalink

We are a small home/office based practice (three of us) and we have been using twin screens for the last five years.  With a laptop, as long as it has a video output, this makes it about as cheap and easy as it gets.  You just plug in a screen and you should be able to set up using multiple screens, with the option of using them independently of eachother.  I use a laptop as my office machine with such a solution with my two colleagues using traditional desktop computers with twin screens.  I would estimate that efficiency compared with using a single monitor shows a 50% gain, and if you need to go and visit a client then you just unplug the laptop and use it in single screen mode, or indeed if you are working at the client's premises take a portable second screen with you.  I have a Samsung LD 190N for such a purpose which was cheap to buy and fits into a second laptop bag.

We also made the jump to a hosted solution about 18 months ago and the acid test came in early January when we were without phone lines after the gales for the best part of three days (thanks to a neighbour's barn roof blowing off and taking the telephone lines down).  We were able to continue to work locally by downloading some files using a mobile dongle for internet access - not ideal here as we are in a mobile black hole, but a drive up the road and working with the laptop perched on the steering wheel whilst the files downloaded via dropbox was a needs-must solution.  We sent one of us home to work on her WiFi at home using an office laptop, and I visited a client and worked on their network for a few hours finishing their work which I would probaly have delayed until February in the normal course of events.

Incidentally one real advantage of a Cloud based system is when working at a client's premises you can actually sit at "your desk" as far as the software that you use is concerned, and believe me that really is a great efficiency boost.

@Larsswan - Can you access hosted desktop without the RDC?

chatman | | Permalink

Lars - Can one access the hosted desktop without the RDC programme, i.e. with just a browser? The reason I ask is because I like the idea of being able to access my desktop from an internet cafe, but you would not always be able to install the RDC from an internet cafe.

Can you access hosted desktop with the RDC.    1 thanks

larsswann | | Permalink

The answer is yes to a degree as they run a services where you can access specific programs on your desktop with a browser but not the entire desktop. The reason for the RDC use is so that the local printer can be printed to and also security of the desktop.

Most cloud solutions would use some sort of rdc for security puposes.

 

regards

 

Lars

More Hosted Desktop Questions

chatman | | Permalink

Thanks Lars - So what can you not do without the RDC (apart from local printing and scanning)?

By the way, can you install your own programmes via the RDC?

Sorry for the piecemeal questions.

RDC    1 thanks

larsswann | | Permalink

The remote desktop connection is the method ised to obtain an reliable and secure connection to your online desktop. You can map your local drive to it including your CD drive but be aware that this is a very slow way of doing things. it is best to initially sent the CD's to the provider who will install the software for you. Any updates are carried out by them and there is an ability for you to install other items but the best way to get the files up to the desktop is via dropbox. This is the method they ise to get your initial client data into the hosted desktop or you can send your data through the post by CD. However I chose the dropbox method due to post service being unrealiable.

 

Lars