Tax & Accounting

What It Means to be Truly Paperless in Your Corporate Tax DepartmentPart Three of Wolters Kluwer’s Corporate Workflow Solutions White Paper Series

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What It Means to be Truly Paperless in Your Corporate Tax Department2

In this white paper, you’ll discover how to take your organization’s productivity to the next level by identifying and removing the gaps to being truly paperless. Learn how to save time and improve efficiencies that will lead to cost savings for your organization, as well as how to mitigate risk and improve accuracy.

We’ll take a deep dive into:

• Trends in corporate paperless initiatives.

• Common obstacles encountered, as well as important considerations in paperless management.

• How the right integrated corporate workflow solutions will help staff members fully adopt a paperless workflow and optimize efficiency.

What It Means to be Truly Paperless in Your Corporate Tax Department 3

Section 1: Trends in Corporate Paperless Initiatives

Maximize Efficiencies for Better Visibility“The real goal behind ‘paperless’ is to be more efficient, not eliminate all use of paper,” points out Jared D. Jones, CPA, Solution Architect with Wolters Kluwer Tax & Accounting. “When I was at a CPA firm years ago, I remember emails sent to 200 people asking where a file was. We’ve come much further along the path to efficiency these days, but even with a move toward a more paperless office, people still print a lot. In fact, the average office worker uses 10,000 sheets of paper a year, reports Reduce.org.”

In the paperless process, we need to realize that being “paperless” means maximizing efficiency to a new level that was never possible before today’s smarter software and processes. That new level of efficiency is essential for success, as today’s trends demand higher productivity and better risk mitigation. Let’s take a look next at what these challenges include.

Increasing complexity and volume — people have more work but fewer staff members. Additionally, companies are going global, which creates a need for all offices to follow the same workflow on the same software with visibility into workflow and project statuses, requiring the use of sophisticated software, such as CCH® ProSystem fx® Workpaper Manager.

Cultural and generational change — staff members just coming out of school want information right now, and that means being paperless and in the cloud. In contrast, sometimes there are one or two holdouts in a corporate tax department who want to be on paper. That’s not ideal and creates issues in achieving efficiency.

Enterprise-wide vs. departmental implementations — “We hear stories of companies adopting Microsoft® SharePoint® as the documentation management system for the whole company, and sometimes that gets pushed onto the tax department,” says Jones. “There are much better solutions for accounting and tax, which is a battle that you might have to have.”

Downsizing of office space — for example, the tax department at a major clothing retailer went from 2,000 square feet to 750 square feet — from 30 desks to 15 desks, which meant having to ‘check out’ a desk when in the office or working from home. “That is something we hear a lot,” Jones points out. “It drives the need to be more paperless.”

Cloud computing — everyone wants access to information anytime, anywhere, which requires that companies become more paperless to increase efficiency.

Moving away from mapped network drives — tax departments have tried using network drives, but there are many inherent problems, like folders being dragged into the wrong places. Other issues include no workflow management for sign offs or ability to track changes. Because of these issues, many tax departments have moved away from network drives in the past two to four years, and toward dedicated workpaper and document management systems.

What It Means to be Truly Paperless in Your Corporate Tax Department4

Section 2: Obstacles and Important Considerations in the Paperless Process

Integral Pieces of the Paperless ProcessWhat does it take to minimize the challenges of going paperless? Consider these next four main points when you address your organization to select the right software solutions.

Workpaper management — well-organized electronic binders that house workpapers for quarterly provisions or annual returns.

Document management — a digital file cabinet with expanded search capabilities.

Project tracking — including due date tracking, detailed project information and email notifications before the due date; if there’s no file being routed, how do staff members know when they’re supposed to do something? This is a key part of being paperless, or the process will collapse.

Ancillary tools that aid in the paperless process and make the process easier — if you’re going to take the pen/pencil away, then people need checkboxes and places to put their initials.

Workpapers vs. Documents“The whole idea here is that document management and workpaper management require two different solutions,” Jones says.

Workpapers are:• Building blocks, like building a pyramid. • Related to other workpapers and

documents.

Example: Calculating a M3 calculation for deferred revenue: “There are workpapers flowing into that calculation and numbers coming from everywhere,” Jones explains. “That number goes into the tax return and other places. It’s like an octopus with lots of legs. You’re taking information that you’re calculating and building a pyramid with the tax return at the top.”

How you manage workpapers and the required linking between documents and calculations is different from how you manage documents.

Documents — (aka “the file cabinet”):• Standalone files.• May not relate to other documents.• Can be put into the file cabinet and perhaps

not referenced again.

Obstacles to Adopting a More Complete Paperless ProcessOne obstacle to successfully going paperless is not using the right software. An example is the inappropriate use of Microsoft® SharePoint®, which is fundamentally a document management system, not a workpaper management system. “If you’re trying to manage documents in a workpaper management system or workpapers in a document management system, you probably will find that it’s not optimal for your needs,” Jones points out.

A second obstacle to the paperless process is having one holdout on the team who wants to use paper. Providing the right software can help with this challenge, although it may be a battle that will have to be fought in the tax department in order to prevent the inefficient use of two types of systems at the same time.

A third obstacle to the paperless process is not giving people all of the tools they need to go paperless, including project tracking software that integrates into email, along with ancillary tools, so that the process feels comfortable.

In the next section, we’ll look at software considerations necessary to overcome these obstacles and optimize your paperless workflow.

What It Means to be Truly Paperless in Your Corporate Tax Department 5

Section 3: Paperless Workflow Solutions

Retrieve Critical Documents More Efficiently In order to optimize workflow, corporate tax professionals should understand the necessary features of a workpaper management system and document management system — and not forget the importance of project tracking and ancillary tools. We’ll look at each of these in detail in this section.

Workpaper Management System FeaturesLet’s review what a workpaper management system should offer.

Electronic binders that represent the two-hole paper binder where you can check out workpaper files and synchronize work from any location.

Sign offs for both preparer and reviewer; lock documents after final review.

Notes, so that people can create and respond to various types of annotations as they would in a paper binder.

Hyperlinked referencing that enables a click of a button to open the linked document.

Version control over the entire process to make sure that all your workpapers tie back to the tax return.

Roll forward an entire binder, including trial balances, linked financials and workpapers, from one year to another, or one quarter to another.

Your workflow is optimized with an integrated process. For example, does the software have a button in the email to send something right to the workpaper management system? Does it also print to the workpaper binder as an electronic file, integrate into the project tracking system and update automatically?

An example of a workpaper binder in CCH® ProSystem fx® Workpaper Manager.

An example of a binder index list in CCH ProSystem fx Workpaper Manager.

What It Means to be Truly Paperless in Your Corporate Tax Department6

You cannot execute electronic signoffs, make notes, lockdown files or offer password protection if you’re still using network drives. Mitigating risk and improving accuracy requires software that offers those functions.

Document Management System FeaturesLet’s explore what a document management system should allow you to do.

Search by file name and key file properties such as: assigned classes and subclasses or keyword, so file retrieval is quick and easy.

Electronically file your returns and store them for the appropriate time periods based on the corporation’s record retention policy, and mark them for automatic destruction upon expiration.

Reduce risks related to hard drive crashes or laptop thefts by storing emails outside of the standard, archived email folder.

Quickly access many key functions to help you organize, manage and maintain your documents, including lock, checkout, check-in, version history, direct editing, discussions and overdue checkout notification.

Screen shot of a central screen in CCH® ProSystem fx® Document showing files relating to tax. There’s entity search on the left and full text search on top. You can also use advanced search for metadata layering and can sort and filter all the columns through the tab system. It’s easy to find information because it’s a central repository and works like Google®.

What It Means to be Truly Paperless in Your Corporate Tax Department 7

Project Tracking FeaturesIn a formal paperless world, you need some kind of calendar and tracking system because you don’t have a physical reminder on your desk. Jones points out, “this is one of the pieces you can’t forget.”

Let’s take a look at the important features for project tracking.

Due date monitoring that includes key tracking dates, notifications (part of menu on the left side of the screenshot), the ability to change status of a project and project tracking.

Automatic email notifications that a project is ready for the next staff member.

Routing sheets that mimic the paper workflow.

Customizable dashboards and reports to show project statuses.

Integrated workflow to optimize efficiency and make everything work better.

What It Means to be Truly Paperless in Your Corporate Tax Department8

Ancillary Paperless ToolsAll of these ancillary tools matter to your success when going paperless.

Let’s consider what makes a successful paperless process.

Annotation and markup tools allow tax professionals to include more information within their workpapers. A program like CCH® ProSystem fx® PDFlyer, an add-on to Adobe® Acrobat®, enables you to run a calculator tape, link to a page in a tax return, put initials on the bottom or top corner of the page and audit trails to track workpaper history (see screen shot below).

Scanners streamline data entry; however, you will need to determine if they should be centralized or decentralized.

Multiple monitors enable tax professionals to view many documents and applications in an organized manner. How many monitors will optimize your efficiency? Four is becoming a best practice.

Software in the Corporate Tax DepartmentCorporations need to: • Streamline workflow to make work life

more effective.

• Improve productivity in order to work less.

• Mitigate risk.

Some tips for choosing and implementing the right corporate workflow software: • Know that there is not one size fits all tax

software solution.

• Determine if you have a document management problem or a workpaper management problem, and decide which to fix first.

• Make sure you give people the right tools to embrace a fully paperless process.

What It Means to be Truly Paperless in Your Corporate Tax Department 9

Wolters Kluwer Is Here to HelpWolters Kluwer’s Corporate Workflow Solutions are the profession’s top choice for cloud-based or on-premise tax prep and compliance. These solutions support an entire corporate tax workflow by standardizing,

integrating and automating so that your corporate tax department can get to a new level of an efficient paperless process.

Key Corporate Workflow Solutions are shown below:

Cloud Solution or On-Premise Solution

Obtain Organize Prepare and Review

Deliver and Store

CCH Axcess™ Tax or CCH® ProSystem fx® Tax p P P P

CCH Axcess™ Portal P P

CCH Axcess™ Document or CCH® ProSystem fx® Document P P

CCH® ProSystem fx® PDFlyer P

CCH® Fixed Assets Manager or CCH® ProSystem fx® Fixed Assets P

CCH® ProSystem fx® Workpaper Manager P

CCH Axcess™ Workstream P

CCH® IntelliConnect® and CCH® Accounting Research Manager® p p p p

P These solutions are in active use during these corporate workflow steps.

p This solution supports your entire corporate workflow process.

What It Means to be Truly Paperless in Your Corporate Tax Department10

Would You Like to Know More?

Close the workflow gaps in your corporate tax department and take control of your tax workflow process with Wolters Kluwer’s integrated end-to-end Corporate Workflow Solutions. Learn how these solutions can help:

• Minimize manual data entry to reduce material weaknesses, costly restatements, and underpayments or overpayments.

• Manage workpapers in their native formats, establish audit trails, strengthen controls, and incorporate regular record retention, version control, rights management and data security to better prepare for audit defense.

Wolters Kluwer has developed numerous solutions to streamline your corporate workflow process — visit CCHGroup.com/CorporateWorkflow

or call us at 800-739-9998 for a free consultation.

Paperless Tax Management

Automated Workpaper

Management

Reliable Research

Management

Electronic Document

Management

Streamlined Fixed Assets Management

Integrated Corporate Workflow Solutions

When you have to be right

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Contact information:Wolters Kluwer2700 Lake Cook RoadRiverwoods, IL 60015United States800-739-9998

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Please visit CCHGroup.com/CorporateWorkflow for more information.