For law firms, engineering consultants and other professional services organizations, the basic accounting process might appear fairly straightforward: Your company is asked to perform certain tasks or functions, and then you invoice your client for those services. But before your accounting department processes an invoice, it needs to be aware of the work that has been completed, and coordinating all of the necessary information is a big headache.
In a professional services context, you’re generally dealing with a document that outlines the scope of work. To produce this document, your company might first conduct a business assessment in order to identify what your customer needs, and then list the labor, time and expenses you plan to use to meet those customer needs. Once this scope of work is ready, the customer has to approve and sign the document.
When the scope of work is in place, your accounting department gets a purchase order from the customer. But before you invoice the customer, you need to know how much of the work has been performed. And that means accessing and tracking a number of separate project documents, such as change order requests and status updates. And depending on the project terms, you might bill the customer incrementally or after all of the work has been completed.
As a result, this sort of accounting process is fairly complex, and especially difficult if your accounting department has paper-based processes or a fairly narrow, specialized accounting software solution.
Adopting a digital document management system (sometimes called “enterprise content management”) has three big advantages when it comes to accounting processes for professional services organizations:
- Centralized document storage and workflows: Instead of dividing your business information into different silos — accounting documents, project documents, email, paper contracts, etc. — a document management system gathers all of it into a central workflow repository. This workflow repository contains all of the relevant documents for a client, providing fast, easy access for the accounting department as well as specific individuals involved in that project.
- Streamlined collaboration: Since a document management solution allows you to accumulate and collate all of the relevant information for a client or project, it greatly improves the collaboration process between the accounting staff and other key personnel. Everyone is able to collaborate on the same set of electronic documents, sharing and updating the scope of work and other information. This ease of collaboration makes the invoicing process much more efficient.
- Automated version control: The concept of version control is vital to any collaboration process. Every time someone makes a change to a file, the digital document management system automatically tracks the history of that document and stores this latest version alongside the original and all previous iterations.Without this version control, it’s all too easy for the collaboration process to break down, with different people working on outdated versions of the document that they’ve saved on local hard drives, resulting in unnecessary confusion, errors and wasted time.
For professional services organizations, the accounting process is often complex, requiring collaboration with different departments and individuals before an invoice goes out to your client. When you use a digital document management system, you’re able to improve efficiency and productivity, due to the way it centralizes your documents, streamlines collaboration and automatically controls versioning.
Are you ready to learn more about document management for your accounting department? Contact DocuWare today for a free consultation and comprehensive cost-benefit analysis.