As a professional accountant or tax advisor, some truths are standard to the job. One of the “givens” of the financial advising and accounting industries is the need for accurate client documents. These records are often the primary way that advisors communicate with clients and perform critical tasks, like filing taxes prior to tax deadlines.
But without a strong document management process, tasks can feel clumsy and disorganized. Clients may fail to provide the right papers, or they may lose trust in advisors that can’t keep track of confidential information. These examples underscore the need for solid document management systems.
In addition to honoring your advisor-client relationships, having modern document management processes also provides a competitive edge. In this post, we’ll shed light on how streamlined document processes are actually key to staying on top
What is Document Management for Tax Advisors and Accountants?
In general, document management describes the process of collecting, managing, storing, and using documents for various purposes. Financial advisors, accountants, and tax professionals aren’t the only ones using documents to carry out daily operations. Nearly every industry has a set of systems in place for managing different document use cases.
Depending on whether your firm’s document management processes are manual or automatic, you might have more of a direct responsibility for managing files and documents. This is also true when taking into account paper versus digital processes.
Document management tools (including software) can alleviate some of the more time-constricting processes and improve client interactions concerning important documents.
What Type of Documents are Most Important?
In a tax and financial context, there are many types of documents that need to be submitted, filed, sent, and stored. As such, it takes enormous attention to detail to keep these moving pieces organized and efficient. As an accountant or tax advisor, you might be accustomed to working with the following types of documents.
- Official tax paperwork – Documents associated with tax filing and submission are often official and formatted by employers for use with the Internal Revenue Service (IRS). Although the format of these documents (such as W-2 forms) is standard, they are unique and varied based on every client.
- Business expenses, receipts, etc. – If you work with small business clients, you might have to collect plenty of miscellaneous papers that relate to expenses or tax write-offs. Since these files can be numerous, it takes strong management systems to keep files like receipts organized.
- Personally identifiable information – As a financial advisor, you’ll work with many documents that are private for your clients. This could involve various forms of identification (such as birth certificates and passports), mortgage statements, bank documents, and other sensitive material containing identifiers like Social Security Numbers (SSNs). It’s critical that these documents be handled with care and concern.
Client Portal Software
To solve the issues of client collaboration and digital storage space, many firms turn to an integrated client portal. This makes data sharing easy and direct, particularly when it comes to sensitive data and signed documents.
A client portal can also give your clients an inside look at the source documents that you're using to file their taxes, maintain their books, or provide up-to-date financial advice.
Online Security of Financial Documents
Even if your tax or accounting office sticks to digital records instead of using large metal filing cabinets, security is still a top concern. According to the Center for Strategic and International Studies (CSIS), financial institutions are some of the most prevalent victims of cybercrime and hacking attempts. And while someone might not be able to physically break into your office and steal protected documents, threat actors may try to do so online.
That’s why choosing document management systems with rigorous security and compliance protocols is so vital. Not only does it provide assurance for you as a provider, but it also helps clients know that your firm can be trusted. And make no mistake—when comparing firms, consumers are likely to choose a provider that takes identity threats seriously.
Additionally, there could be specific legislative policies or compliance procedures that you can expect to follow as a financial services provider. The goal of these rules and policies is to protect clients and consumers as they share personal information via documents.
Document Management Pain Points for Accounting Professionals
As tax experts and seasoned accountants, there are several common document management struggles that many face. Creating and finding workable solutions to these struggles doesn’t just improve your internal flow—it also creates more positive experiences for your financial clients, too.
In a digital world, it’s important not to get stuck in the past. If your entire financial firm still operates wholly on paper, you might find that clients are less likely to sign up for services. That could be because so many competing firms offer simplified digital solutions for file management that make the client’s work a breeze.
Contemporary products can be worth the investment, especially if they make life easier for clients. Look for features like digital uploads, easy scanning tools, important options, and cloud based storage year-to-year. These options make it easier for clients to do the work once and know that you, as their advisor, have everything you need to do the job well.
Secure Data Submissions for Clients
Even though submitting documents and papers online sounds exciting, it’s not without concerns. Financial documents are still sensitive, and they contain plenty of personal information that should never fall into the wrong hands. That means you can’t just use any solution or technology that you find.
Document management solutions should be vetted carefully for online privacy and security. This protects your client’s identities and allows your firm to operate more freely. Without having to worry about what’s happening behind the scenes to your files, you can know that you’re compliant while being efficient.
Administrative Bottlenecks to Securely Share Files
In some accounting firms, multiple people touch or sign off on documents throughout the advising process. Yet some firms still struggle with moving those files along the chain and passing them to the right personnel. This can delay results for your clients and make it more difficult to accomplish the task at hand.
Smart document workflows can reduce this strain and make it easier on entire offices to operate seamlessly. With the right automations, everyone is informed on what the next steps are, particularly as they relate to client communication and follow-through.
How to Choose a Document Management Software or Solution for Enhanced Client Data
By now, you’re familiar with the frustrations and hassles associated with financial document management. But how do you overcome these in a way that sets your tax or accounting firm apart? Choosing a document management platform, tool, or solution is one way to take your firm to its next chapter and stay ahead of the competition.
As you look at various solutions on the market, think critically about what your biggest struggles are and what you aren’t able to solve in-house. Then, expand your thought process to include several important questions about each document management solution.
- Does this tool or platform fit within the firm’s current budget for new accounting or tax software?
- Can I use any third party integrations to link this platform with software that I’m currently using to run the business?
- Does it provide a seamless user interface that will be simple for clients to access, use, and update?
- What is the level of cloud storage or data retention like with this particular system?
- How much manual effort is involved with onboarding, maintenance, or troubleshooting?
- Can the solution be used remotely or with mobile devices to promote convenience and document collaboration?
- What is the major goal for using this particular solution at this particular time?
Remember, choosing the right option for your tax or accounting firm means zeroing in on the struggles and pain points you’re experiencing right now when you need to share documents. As your firm grows and you need additional team collaboration, those challenges may shift based on the number of clients you have or the kind of document requirements you need at a given time.
Set Your Firm Apart with Better Document Management
At the end of the day, document management is about plenty of important things—including providing excellent service to your clients and adhering to critical compliance measures. In a competitive market, your firm simply can’t afford to fall behind when it comes to taking doc management more seriously.
When it’s time to digitize and level up, you need solutions with key features that you can trust. Moreover, you want to ensure that they are in line with other essential aspects of your business—like how you market and relate to clients throughout their financial journey.
CountingWorks PRO can help your firm take control of critical processes and get serious about your competitive edge. Together, we’ll find solutions that will protect your current business and enable you to scale.