Three Must-Have Document Technologies for Accountants During Tax Seasons

According to recent IRS data, it still receives some eight million tax returns annually filed on paper. The use of paper during tax season doesn’t appear to be going away either. A NerdWallet and Harris Poll survey found that 17 percent of millennials used pen and paper to file by mail last year. This doesn’t even account for the paper used between an accountant and their client to transact on preparing a tax return. Paperwork headaches linger throughout tax season. But, there are at least three technologies accountant organizations can implement to minimize paperwork inefficiencies.

First, there is an enabling technology that should be used: online submissions. Accounting firms should enable clients to submit digitized documents. Instead of mailing or bringing in all types of paper documents, it’s more convenient for both parties to upload forms or scanned documents via a secure online method. This can even save clients from unnecessary office visits, which frees both parties to be more efficient with other tasks. Saving a client time can be a differentiator for an accounting firm and these three core technologies will help users and staff.

Online Document Scanning

online document scan
An accounting firm will want to ensure their online submissions allow scanning and not just any scanning – batch scanning. This is effective when dealing with a large amount of paper documents. Web scans should be possible from any platform, such as smartphones or desktops. Ideally, they should also not require any software installations by customers. Essentially, the setup would let an end user connect to a scanner and scan documents from any common browsers on any device.

To optimally support online document submissions and scanning, your application should be able to handle the most popular document formats: PDF, Word, Excel, TIFF, JPEG, to name a few. Of these, three document file formats are arguably the most popular in digital document management: JPEG, PDF and TIFF.

Interested to learn how to create an online document scanning solution, check out Scan Documents Online and Upload as Images.

Document Indexing

document indexing
Document indexing is the heart and soul of a good document management system. Indexing replaces file folders and directories with a consistent set of parameters that do not grow exponentially year after year. This is unlike a typical data directory that you would normally organize by year. A flexible indexing system will allow you to adapt parameters based on the nature of the document. For example, the index for tax documents may be by a client number, or type of return, the tax year, etc. Done right, you can quickly find anything you need at any time.

To foster strong search capabilities, metadata is used to tag documents. Metadata of a document is information that, figuratively speaking, resides hidden inside a document to define its properties. You can associate a customer ID, a document type, a government form number, a company name, and more to a file. In this way, for example, you can easily find all form 941s completed and submitted as PDFs in the last six months. Metadata can be both manually entered and automatically populated from barcodes or OCR technology. Ideally, you’d want to minimize manual entry of metadata, simply to reduce a chance for human error. Use of metadata can vastly speed workflow.

OCR Technology

OCR technology
As is well known, when you scan a document, they usually are saved as an image type. You can tag these documents with key parameters for proper indexing. Sometimes these tags are not enough. You might need to search or edit content within a document. For example, if someone completed a wrong social security number on a submitted paper form, you might want to later be able to correct that. This is where OCR technology helps. It will convert the text in a scanned image document to searchable and editable text.

To optimize results for effective OCR, image resolution is important. For the usual font size (10 pts or above), a resolution of 300 dots per inch (DPI) is recommended. Smaller font sizes will command even higher DPI resolutions. Also, when scanning, you can generally choose among three color modes: black and white, grayscale or color. Usually, grayscale is optimal for OCR. Black-and-white can also work if the document to be captured starts with a good larger quality font.

Other considerations to ensure the best OCR results include using lossless compression. So, saving as a TIFF or PNG file is best. Also, the brightness setting of scanners adjusts the balance of light and dark shades in your scanned images. Generally, a medium brightness value of 50 percent is best.

And Then, There’s Security

Implementing any of these user technologies are wasted if you don’t have a user’s trust in the application. Ensuring this trust includes having proper security mechanisms in place. Most effective document management systems will have proper security built in.

A good system should not only provide SSL encryption, it should also ensure all cached data is destroyed after the user leaves the application or after a set time. Make sure it also enforces proper user authorization mechanisms. For example, a chosen system should require controlled access, such as a login for getting to local files, scanners or webcams. To better support user authorization, make sure your chosen system supports Windows authentication, forms authentication, and basic Authentication too.

The use of document management systems is on the rise and going paperless should be possible end-to-end, not just for parts of a transaction. This is particularly true for accounting and tax season. It can make a firm more efficient and that efficiency can lead to a better customer experience for those that dread tax season.

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