Document Management System (DMS)
Are your important documents hurricane proof??
In 2005, Hurricane Rita forced a mandatory evacuation for Galveston Island and surrounding counties. In fact, my office would be the official welcoming committee for Rita herself, being located on the Seawall that was meant to protect the island. Many hours later, I breathed a sigh of relief while sitting outside my travel trailer 350 miles away. Thankfully, my family and I were out of Hurricane Rita’s path. However, I then started thinking of all the client information which was left behind in my office-- the same office whose doors were literally wide open to the wrath of Rita. Although I was able to take the three office computers with me to safety, it was impossible to take all of the paper documents and files. In fact, my personal information alone, gathered at home, took up three large boxes. At this point I knew I must find an alternative way to store information, which brought me to DMS.
I have fully implemented a Document Management System, DMS, in my office. What does this mean? Documents are scanned and organized in my computer system instead of being copied and placed in a file. Instead of boxes and boxes of files from past tax returns, I am now able to copy ten, twenty or even thirty years of tax returns along with their supporting documents to a single CD or DVD. The information is in PDF format (a free software supplied by Adobe and available on every computer) with a password to prevent unauthorized viewing. The current and future benefits are tremendous. How many times have you spent hours looking for a tax return or other financial document? With the convenience of DMS, everything you need is simply a "click away."
Why is DMS so important in these busy times? Recently a client called my office asking if I had copies of his W-2 forms from 1995 to 1998 because the Social Security Office did not show any of his earnings from those years. Unfortunately, I had to tell this client my records are only kept for three years, as required by law, and I did not have records from that long ago. So, although the statute of limitations does not require taxpayers to keep some records beyond three years, this was clearly an unfortunate problem for my client. Social Security is based upon prior earnings. If the Social Security office does not have earnings reported, as was the case with my client, then it is the taxpayers responsibility to provide the information to their office for proof of earnings. Had DMS been a possibility for my client, all that would have needed to be done to solve his dilemma, would be slipping in a CD in the computer, clicking the mouse and printing the necessary documents for the Social Security Office. Clearly, this would have saved my client countless hours of headaches.
This particular scenario sounds like an extremely remote possibility of happening to you, right? Think again, there are other possibilities. What if the company you worked for is no longer in business, which means all records of your employment are gone. What if there is a fire or theft? And let’s not forget about hurricanes and flood?? You cannot simply say the items were lost or stolen. You may have to go to considerable lengths to have the information replaced or reproduced; hours on the phone explaining and researching, not to mention the cost associated with having the documents reproduced. You can see the advantage of having all your records on a single CD for future use.
DMS does not stop with just your tax returns, it is also very helpful with other information such as warranty papers and receipts. Have you ever had an appliance break and could not find the warranty papers or receipt for the purchase? Now imagine putting a CD in your computer, clicking on the folder named "Warranties," and with a few more clicks of the mouse, your warranty and receipt of purchase are there on your computer screen ready to be printed. The possibilities are endless. Information at the click of a mouse, rather than searching for hours through endless mounds of paper to find that one piece you need.
So if you think this service will be too expensive, think about the aggravation and time saved by having your information on a single CD. When preparing your tax return, I automatically scan all documents needed. If you have other information, I can scan and organize those documents at the same time. Who better than your trusted CPA to scan your important financial and personal information to a CD? A CD only you will have access to when you need it most.
After scanning the documents, I recommend that you make a copy of the CD, put it in a safe deposit box or other secure area, and then shred the paper information. Obviously, a backup disk is key to the success of this system.
Fortunately, we were spared the real wrath of Rita’s fury. Also, just as fortunately, many lessons were learned by all of us Gulf Coast inhabitants. I cannot prevent a natural disaster from happening, but I can protect your important financial documents, and your peace of mind. If this sounds like something you might be interested in, please come see me.
