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Practice Tip - Going Paperless

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20th Jun 2005
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There's much discussion on AccountingWEB about the paperless office. I have largely worked that way for about three years and would hate to go back to a conventional system. So I thought it might be worth sharing some of my experience.

Creating the paperless office is not particularly difficult, nor does it necessarily involve massive investment. You just need to adopt the right state of mind.

However, a paperless office does not suit everyone. If you:

  • won't use a keyboard;
  • still think nothing is real unless it's been printed;
  • persist in hand writing all your working papers so no one can read them;
  • hate email
  • believe typing is something someone else does;
  • have no clue how to search a PC, let alone the web;
  • won't read things on screen, but insist on them being in a well-ordered physical file;

then the paperless office is not for you.

It will also be a problem if you and your partners don't share similar views. You can't be 'half paperless' - at least not without a major review of the profit sharing ratio, which sees those who refuse to take part taking a substantially lower share of profit to compensate for the extra filing, research and physical storage costs they will impose upon the firm. I make this point deliberately. For everyone except a sole trader, going paperless is likely to take people outside of their comfort zones. Therefore, it will involve considerable negotiation over what is, and is not, acceptable to those involved

In my opinion, there is only one way to deal with this - and that is to make sure that any new system feels like the one that it has replaced. In other words, the replacement system must be quickly and easily accessible. In my old partnership, in the days before email and the web, secretaries produced paper documents which were filed according to who typed the work and when. That worked then because fee-earners could physically flick through the paperwork. Such a system would be hopeless in the case of a paperless system. The time spent searching for an individual client's records would be far too great.

Most firms have two key characteristics to their physical filing systems. They order clients either alphabetically or by client number. They then split their records into the following main categories:

  • accounts;
  • audit;
  • tax;
  • financial services;
  • consultancy;
  • other correspondence;
  • fees;
  • permanent;

Not everyone will need all of these categories, and others can be added. The point is that it's easy to set up a filing system for clients with a directory for each, which is ordered either alphabetically or by client number. It is just as easy to set it up so that the above sub directories are available for every client. Better still (and this makes eventual archiving a great deal easier) you can split important directories such as accounts, audit and tax into individual years. If you want to make the system even easier, you can also split the working papers by the standard categories you have always used. Misfiling is the nightmare of all systems. The greater the degree of standardisation, the less the likelihood of misfiling.

And what investment in software does this take? In my case, none (I suspect this would be true for most smaller firms). I just use Windows sensibly: it is easy and it works. Once you have set up a model directory with all the relevant sub directories, whenever a new client comes along, all you have to do is copy the model directory, name it, and the entire filing system is ready to go. That's a massive win for practice assurance.

Or rather, it would be if all things are filed correctly. In my next tip I'll look at how to find documents in a paperless world when things go wrong.

Richard Murphy
AccountingWEB contributing editor Richard Murphy is a sole practitioner chartered accountant but was previously senior partner of a firm for 11 years. He has also been chairman, chief executive or finance director of 10 SMEs.

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By naomi2000
27th Jun 2005 12:56

Paperless office
You may not need additional software to go paperless, but it's definitely worth getting a good quality scanner or all in one with a multi feed tray .

I'm also interested in getting a portable scanner for client site visits . Any recommendations ?

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