The Ultimate Guide to Document Management for Accountants

Collecting hundreds—if not thousands—of client documents, saving them as recognizable names, and storing them in the right place is tedious and time consuming. After all, Every file needs to be in order, and all client information must be protected.

However, protecting client information and documents (not by email, for example), sharing them with only the right staff members, and maintaining compliance is challenging to say the least. Choosing your accounting document management software must be done carefully.

Understanding Document Management

Document management is more than simply file and workpaper collection and storage. It also includes a number of capabilities throughout the file’s lifecycle:

Managing access
Authorizing (e-signing)
Managing revision history
Annotating and commenting
Collaborating 
Editing
Standardized folder locations and templates
File renaming

 Accounting document management deals with important client documents like:

Official tax documents
Financial statements
Receipts
Engagement letters
Client correspondence

Modern document management software for accountants is designed to lighten the load for busy firms and shift their focus from busy work to higher value activities such as improved client engagement or other billable work. It provides secure document storage, role-based access, and encryption to remain within regulatory compliance, as well as powerful search and organization features to streamline daily operations.

Traditional vs. Modern Digital Approaches

What Are the Benefits of Effective Document Management?

Choosing the right document management system improves team communication and collaboration efforts, alongside numerous other benefits that help your practice provide the best service to your clients.

Enhanced Security and Compliance

Every detail connected to your clients is sensitive information requiring rigorous protection. Document management systems help protect client data while ensuring every member of your firm handles information according to proper regulatory requirements.

Document management platforms let you set role-based access controls (RBAC) so each member of your team only has access to documents directly related to their role and relevance. Data is always protected by encryption, and the platform continuously tracks who accesses documents, along with timestamps.

These systems follow compliance rules like GDPR, CCPA, and industry-specific regulations and make it possible to set retention policies for document lifecycles based on regulations.

Increased Efficiency and Productivity

The right accounting document management software dramatically reduces the time you spend on administrative tasks due to the following features:

Automated File Organization: Name, categorize, and file documents based on your choice of predefined rules
Advanced Search: Find documents using metadata, content, or client details
Templates: Manage access to standardized forms and other document types
Batch processing: Work with numerous documents to complete specific tasks
Accessibility: Work with documents to review and approve work from any location

Improved Collaboration and Client Service

Work together with your team to collaborate on projects. Real-time updates keep everyone informed throughout the project and reduce time spent on back-and-forth communication.

Using your secure client portal, collect electronic signatures, manage comments and annotations, and manage all communication with streamlined processes that provide maximum efficiency for your team and clients.

Choosing the Right Accounting Document Management Software

While there are many document management platforms to choose from, the following are some of the best document management software for accountants:

Canopy 

A comprehensive accounting management platform focused on workflow, document management, automation, and client communication.

Pros

User-friendly interface and easy setup
All-in-one solution for document management, billing, and client communication
Strong automation features for recurring tasks and client requests
Cloud-based, scalable, and mobile-friendly
Includes mobile document scanner
Customizable templates and workflows
Integrated client portal for secure document exchange and e-signatures
Provides detailed audit trails and time tracking features

Cons

Uses Zapier to integrate with other document management systems
Missing deeper functionality from solutions like DocuSign
No app-wide search
Not ideal for managing tasks like reconciliation 

FYI Docs

A cloud-based platform focused on automation, integration, and workflow optimization.

Pros  

Automates emails and document creation
Works with Xero, DocuSign, and Microsoft Office  
Centralizes client data
Makes team collaboration easy

Cons

Not as many templates as some competitors
Higher learning curve for setting up
Inconsistent filing structures for teams
Not an ideal subscription model for smaller firms

Karbon

A preferred option for automated workflow and client communication.

Pros

Streamlines client communication
Converts emails into tasks
Improves productivity
Automates processes
Provides quality customer support

Cons

Slow loading times
Difficulty tracking assignments
Expensive for smaller firms
Limited email formatting options

TaxDome 

An all-in-one platform for tax, bookkeeping, and accounting.

Pros

Combines CRM, workflow, billing, and document management
Automated features
Client portal
Unlimited document storage

Cons

Limited customization for workflow
Interface isn’t as intuitive as other platforms
No @mentioning to internal collaboration
Only half the number of permissions to keep documents and data safe
Less secure mobile experience

The Most Important Features to Look For

The following are features to look for in the ideal document management platform:

Organization, search, and file management
Secure cloud storage
Automated document renaming
Easy collaboration
Folder templates
Client portal and mobile app for easy document sharing and electronic signatures
Client alerts and reminders to expedite document collection and review 
Recurring task scheduling
Encryption, multi-factor authentication, and other regulated security features
Audit trails
Annotation tools
Mobile accessibility

You get all these features with Canopy! We don’t mind saying it—there truly is no comparison.

Implementing Document Management Successfully

Successfully implementing a document management system requires careful planning. Utilize the following approach to integrate the system and train teams effectively.

7 Steps for Seamless Integration into Existing Workflows

Assessment: Examine your current processes to identify your firm’s pain points and weakest links.
Goal Determination: Use your assessment results to determine your objectives with improved document management.
Planning: Determine how your team should standardize its client folder structure, naming conventions, data access permissions, and other important details.
Data migration: Carefully transfer all of your existing documents using the organization and metadata agreed upon.
Integration: Connect the new platform with your existing accounting software and email systems.
Testing: Before fully implementing your new integration, verify your workflow to ensure everything functions as expected before full-scale deployment.
Phased rollout: Implement your integrated document management platform by department or client type to monitor the change and validate everything is working as expected.

Planning this rollout in stages prevents potential disruptions, so you can start seeing the benefits quickly.

Training Strategies

Your team will experience the smoothest transition by developing a simple, effective training strategy like the following:

Role-Based Training: Train your team based on each individual’s role and how they will access the system.
Workflow Documentation: Create easy-to-follow guides for common document tasks.
Team Leaders: Adopt enthusiastic leaders for each team who can train and support their peers in learning new processes and getting the most from the system.
Ongoing Check-Ins: Schedule follow-ups to help teams further train on areas requiring more assistance.
Feedback Mechanisms: Request feedback from every member of your firm and provide surveys to gather sentiment and suggestions.

Overcoming Common Implementation Hurdles

There are a few common challenges you can anticipate and prepare for accordingly:

People often resist change, so make it clear how the new system benefits everyone.
Provide thorough training.
Listen to all feedback, positive and negative, and address concerns with solutions.
Use batch scanning and OCR to include paper documents.
Refine user roles over time, starting with the easiest settings and gradually specifying more complex administrative settings.

A Case Study with Winthco Wealth Management

Our client Winthco still relied on paper-based systems and disconnected tools, causing delays and team burnout. And when it was time for tax season? Don’t even ask.

Once they implemented Canopy, they saw the benefits of streamlined processes and communication. Our platform cut down administrative overhead and improved collaboration and client satisfaction. As a result, Winthco is now on its long-term growth path.

“Canopy has allowed us to reduce inefficiencies and focus on growing our client base. It’s a vital part of our strategy for the next 40 years.” — Kevin Coppin, owner

Canopy: The Right Solution for Accountants

Implementing an accounting document management system enhances efficiency, security, and collaboration within firms handling large volumes of sensitive client data. 

Choosing the right accounting platform for your practice can make all the difference in scaling your firm. If you’re ready to take your operations to the next level, start your free trial of Canopy’s industry-leading practice management solution and find out what it’s like to gain total control of your operations.

Start your free trial today!