I am SO sick of storing paperwork. I have been afraid of going with all electronic copies or our required to be kept for 3 years stuff, but the temptation is still there. Anyone ONLY store scanned copies? Do you just back it up to an external? Any advice or tips? Do you just make a folder for each client?
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Afraid of what? Going paperless takes an adjustment(s). For some it is just as great as using a PC to do tax returns, etc. For some staying with paper copies and file cabinets is comfortable.
Review what is "required" to be kept for the 3 years. Not as much as some actually decide to keep copies of based on their own policy vs the actual requirements.
If one goes paperless you should invest in the best scanning equipment, Adobe software (creating your own filing system or buy filing software) and of course, backup system (in house or external) that you are comfortable with. For many the cost benefit savings of paperless (less ink, paper, etc. costs and faster document retrieving made it a wise decision. So a cost benefit is in order for you to consider.
You can "mirror" the paperless filing system similar to your current physical non-paperless system. It boils down to your decision of comfort, security and reliability.
Do a search on this site for related posts.Last edited by TAXNJ; 01-14-2017, 09:45 AM.Always cite your source for support to defend your opinion -
I agree with excellent comment by TaxNJ.
To answer question at beginning of thread, yes, there are many who are paperless and only keep PDF copies of Form 8879 and other documents. I worked in a paperless firm for a few years, and also have been paperless since I went solo, so I've been doing it since 2011 filing season, it is safe, tried, and true, provided you follow normal good computer hygiene (multiple backups, security, licensed utility software, etc). At the firm, they used the tax vendor's document management system; on my own, I just create Windows folders for each client and subfolders for each tax year.
One new thing I tried last year was eSignature of Form 8879 offered through my tax software vendor; it worked great for most of my tech-comfortable clients, so the Form 8879 in this case NEVER EXISTS on paper at any point in time.
My paper file never exceeds a few inches thick during tax season, mostly just source docs I need to return to client. Many of my clients send me PDF docs in the first place, via secure file portal. I have a practice where I tend to attract those comfortable with transacting such business on the web.
One key is to learn to use markup tools in the PDF file, such as checkmarks, text boxes, etc. Once learned, you can work on screen (multiple monitors) probably as fast as with paper. A good on screen calculator with ability to copy/paste the virtual tape right into the PDF is very useful. If you have more than one preparer on staff, you can even set up color codes or whatever for initial input and then review."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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Rapid robert .............
Sounds like your practice uses the latest “time and cost savings” tools. You added some additional valuable info. Congrats.
Regarding your third paragraph, “My paper file never exceeds a few inches thick during tax season, mostly just source docs I need to return to client.” Our firm does not let the clients who bring any paper to the office leave without taking their originals the same day since the documents are scanned in a short amount of time.
Investing in a good professional scanner (Fujitsu has a great selection and fantastic support that is part of the product), the clients always leave with their originals (also part of the engagement letter as a reminder to them in case they later forget that they have the originals).
Regarding your last paragraph “One key is to learn to use markup tools in the PDF file, such as checkmarks, text boxes, etc. “, yes, as we know that is very important and it is amazing that there is an “add on” software you can purchase and add to your Adobe software allowing one to do that and much more.Always cite your source for support to defend your opinionComment
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Our procedure
We have a directory called Client Files.
Under that directory we have a directory for each letter of the alphabet A B C etc.
Under that we have a directory for each client who's last name starts with the appropriate letter. Apple Jack Appleton Pete and Jane, etc.
Under each client we have a directory for each year 2014 2015 2016 etc.
Easy to find and easy to store.
No paper is kept.
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