Why a Document Management System is a Must for Accountants
August 12, 2021
Accountants and accounting firms serve as the custodians of financial data for every business out there. They are only able to do their jobs well with the help of the tools that they use. Those tools are a crucial investment as it makes them more efficient and effective in carrying out their tasks as accountants and bookkeepers. If there’s one tool that these professionals can’t live without, it’s an accounting document management software, which can drastically improve their workflow and productivity. This article discusses the importance of a document management application and the importance of its role in accounting.
What is a Document Management System?
Simply put, a document management system (DMS) is basically a method used by accountants, bookkeepers, and tax professionals to store their most essential documents like contracts, financial records, communications, and other vital information. While this has been mostly manual work, nowadays, online and cloud-based management systems are being used or a combination of both.
Why Keep Business Records?
Any responsible business owner knows the importance of keeping an archive of their financial records for tax purposes and to help keep track of how a business is operating. There are many advantages of keeping business records with zero disadvantages. In fact, without business records, any company will soon face a lot of problems that they’ll find impossible to get out of.
Some records are best kept in paper or physical form, while there are many types of records that are better off stored in digital format. There are companies and firms that hold both physical and digital copies of the same documents as a safety measure.
Some say that retaining business records for five years is enough. But the truth is, it really depends on the type of document you’re keeping. Ideally, companies should be storing documents and other financial information until the period of limitations runs out.
Why Use a Document Management System?
Considering how much paper is used by accounting firms, having a DMS is simply a far more convenient way of accessing and storing documents. There’s also the amount of effort involved with retrieving information from traditional paper-based methods of storing documents.
Suppose your firm spends $25 per hour for staff members’ time and $40 an hour for partners and managers. All that money goes into paying for the effort your employees exert going back and forth retrieving, archiving, and managing all the physical documents they need in their day-to-day tasks. By going paperless, or at least using a combination of a DMS and physical records, you can save a lot of time and money. The costs associated with paper documents and copier expenses alone could amount to hundreds or even thousands of dollars of savings.
Better ROI and Overall Efficiency
Along with the quantifiable savings, there are less measurable benefits to paperless accounting document management software that can be just as valuable. Your employees can focus more on doing tasks and finishing them on their own desks instead of going around the office trying to retrieve what they need. They can have access to your entire library of financial records through a DMS and perform all their calculations and reports with just a few clicks of a button.
The value of good record-keeping is only as good as the system you’re using to keep those records. If you have an efficient and intuitive system in place, then accountants can do their jobs far more efficiently and deliver quality results to their clients.
Firm 360 is an accounting management software that’s also a powerhouse of key features that could make your work far more manageable and painless. We give you an all-in-one platform where you can process billing, invoices, automated accounts receivable collections, and document management, among others. If you want to experience the Firm 360 innovation, contact us and book a demo today.