As a good accountant, you know the value of good record-keeping, and stress this to your clients. So you certainly don’t want to be known as the firm that adopts a “do as I say, not as I do” approach to file maintenance. Check out the reasons why document management for accountants provides excellent value to yourself, and as an example to your clients.

What is a document management system?

Simply put, a document management system is the method by which your firm stores its most essential processes, contracts, communications, financial records, and other vital information. This can be either manual (paper) based or online, or preferably, a combination of both. 

Are there records that I must keep in physical form? 

Some documents are best kept in paper or physical form. These include identity documents, such as birth certificates, social security cards, and passports. However, even with paper records, it’s a good idea to back up a copy online. 

Why keep business records? 

Quite apart from the fact that by law, you must keep business records, it is a pragmatic and efficient way of keeping track of how your business is operating. Other reasons include any loan applications you may make – no bank will lend you money without looking at your books – and to aid you in any insurance or court action. 

How long do you need to keep business records?

The IRS recommends that you retain business records until the period of limitations runs out. Different rules apply depending on the type of records and whether you have a corroborating document (for example, an invoice which you can compare with a bank statement, or a quarterly statement which you can reconcile with an annual one). 

I have a perfectly good paper system. Why should I also keep records online?

A perfectly good paper system is only as good as the walls, boxes, and filing cabinets that contain it. If a fire, flood, or other emergency damaged your paper records or prevented you from accessing them, think about how you would reconstruct or retrieve that information. If your answer is “with difficulty,” then you need an online document management system.

I don’t trust computers – people can hack into them. So why should I keep my records online?

You are right in saying that computers can be hacked, which is why River City Data is proud to say that we thoroughly vet our employees and they are HIPPA certified. Once you have a secure document management system, you can track anyone accessing your records illegally or without proper authorization. You can’t always do that with paper-based records, as who can know who opened that particular file, read that particular document, or photocopied that certificate?

Benefits of an online document management system


We have touched on security above, but as a reminder, think about who can access your computer system. You will only be giving access to trusted employees, with appropriate passwords and security clearance, who leave digital footprints. It is far more difficult to access computer records than paper records, and you can keep track of who does. 

Ease of access

Not to contradict the point about security, but your employees who need access to records need to be able to do so easily and quickly. Rather than requiring authorized employees to rush to the box of files in the basement when the auditors arrive, consider how more efficient it is for that employee to press the relevant button and pull up the data instantly.

Audit time made easy

Yes, the right files are in the basement, or the attic, or offsite. But are they in the proper order, filed under the correct name, or still legible?  An efficient document management system maintains your business information in a way that allows the auditors to follow an accurate electronic trail quickly and easily.

Filing and forgetting 

After keeping your financial records for the required period, you are generally allowed to dispose of them. A simple way to do this is to archive documents after a pre-determined period, or even delete them. Your paper documents, on the other hand, will need to be physically disposed of securely, and this takes extra time and effort.

Free the storage space

If your business has limited space, you want to use that space efficiently. Piles of paper documents are not the most cost-effective use of that space. Storing your documents online means being able to use that space for more productive purposes.

Saving on costs

Storage space isn’t the only thing that gets used up inefficiently when you depend solely on a paper-based system. You want your employees to work more productively, not always having to hunt out old invoices, or manually post documents that they could email efficiently, quickly, and securely. An efficient document management system allows your employees to concentrate on today’s tasks, not seeking out information on what happened to last year’s tasks.

Minimize risk brought on by emergencies or disasters

If your office is inaccessible for whatever reason (fire, natural disaster, or another emergency), you still want to be able to continue your business as best as possible. If your records are stored securely and can be accessed remotely, you can minimize the impact of that emergency on your business. 

Backing up files

The only way to back up a paper file in a manual system is to create more paper by photocopying or reprinting the file. Not only is that bad for the environment, but it requires more storage space. Backing up your computer files in an online document management system can be as simple as creating a new online file and calling it “important document (copy).” 

Want to find out more about River City Data Services?

Our employees will use all their professional and technical skills to work with you to create a document management filing system for your accounting business, which provides efficiency, security, and reliability for your data. Contact us for further information on how we can help you.