Scanning Tax Documents: Considering the Benefits of Front-End vs. Back-End Scanning
Posted by Ed Jennings on Thu, Nov 19, 2009
The introduction of workflow automation tools—like tax document automation software—presents some exciting possibilities for streamlining workflow and improving productivity. Firms that have automated workflow by going “paperless” will tell you that implementation is best handled in phases—the first major transition being the adoption of tax document scanning.
Most tax professionals agree that scanning tax documents is more productive than the alternative—hours in front of the copy machine, burning through reams of paper. But the real question is not to scan or not to scan—it’s when to scan. There are two basic camps of firms that have already incorporated scanning into their workflows: firms that scan on the front-end and firms that scan on the back-end.
Scanning on the Front-End
When you scan sets the stage for the level of efficiency gains your firm can realize as a result. Firms that scan tax documents on the front-end position themselves for a completely automated and highly efficient paperless tax preparation process. Consider this:
- Scanning tax documents up‐front creates a digital library of docs that can be immediately accessed throughout tax season. With source docs stored electronically, support staff can fulfill client requests in seconds during the busy season—locating the electronic file and emailing it to the client in a few clicks of a mouse—without interrupting billable work.
- By scanning documents initially, firms can make use of tax document automation systems to automatically extract and import tax data from scanned tax documents, and create an organized, bookmarked, and labeled PDF of source docs. This step can eliminate manual data entry and paper handling altogether, as documents may be scanned in any order before uploading for bookmarking.
- Digital files can be stored within the firm’s DMS or network hard drive for final archiving. This helps firms gradually reduce the use of paper and eventually phase out file cabinets.
Scanning on the Back-End
Back‐end scanning also provides electronic copies of client files for archiving purposes, which eliminates manual filing at season end and reduces the need for physical storage. However, with back‐end scanning, efficiency is only realized at the end of the process.
Scanning on the back-end eliminates the possibility of automating the tax process with automatic data entry and document organization. Relying on paper files from the start, staff must manually organize source documents and use paper copies to prepare returns and fulfill client document requests during tax season. This is not only time‐consuming for staff, but it also means longer response times on the client end.
Develop a Plan and Stick With It
Whether you decide to start scanning tax documents on the front- or back-end, make sure you develop a plan to get started. Who is responsible for scanning? Where will you save the files? Will the file names follow a specific naming convention? These are the types of questions you should consider before applying changes to your workflow. Having a plan will make for a smoother transition and provide a cohesive structure for your staff to follow—no exceptions.