Document Management System in Accounting

In this article, we seek to identify the tangible business results that a good document management system in accounting could produce. We look first at the kinds of accounting, then at the documents generated in accounting and finally examine how a document management system could produce business results.

What Is Accounting?

We could see three broad pictures of accounting:

• Financial Accounting is the recording, classification, summarization, interpretation and communication of financial information about a business. This information is used by investors, lenders and tax officers as well as the managers of the business


• Management Accounting involves identification of key business result areas and developing systems to measure, analyze and communicate information (not confined to financial information) that helps managers of the business to make informed business decisions for improving the profitability and growth of the business


• Accounting Practice is the provision of accounting related services such as auditing and tax consultancy by professional accountants to their clients.

• Sales and Purchase Invoices with supporting shipping and other documents


• Different kinds of evidential documents for cash receipts and payments


• Documents supporting other kinds of business transactions (like returns of purchased or sold items)


• Documents supporting accounting adjustments (like year end accounting of accrued expenses and income)


• Contracts, agreements and correspondence that clarify the terms and conditions on the basis of which ofthe above documents have been prepared


• Transaction records like Purchase and Sales Registers, Cash and Bank Books and General Journal


• Ledgers that classify the transactions under relevant accounts


• Accounts lists such as Trial Balance, Accounts Receivable and Accounts Payable


• Summary results such as Profit & Loss Account, Funds Flow Statement and Balance Sheet


• Different kinds of analyses to assess the financial position of the business

• Cost estimates by product, department and cost element


• Cost allocation documents that seek to assign cost elements to cost centers, and then to products or services


• Cost reports that compare actual costs against original estimates


• Analytical reports seeking to identify the reasons for variances between actual costs and estimates


• Breakeven analyses to identify Cost-Volume-Profit relationships


• Ad hoc analyses highlighting the implications of different business decision alternatives


• Other kinds of documents generated by the current practices of product life cycle costing and activity based costing

• Audit worksheets for each client and accounting year


• Audit queries raised and clarifications received from client’s management


• Audited accounts and reports thereon


• Tax returns supported by computations of taxable income


• Documents relating to tax consultancy services


• Documents relating to other assignments received from clients


• Accounting records relating to the practice itself, similar to those mentioned under Financial Accounting and Management Accounting above, tailored to the special characteristics of accounting practice

• More efficient and lower cost storage and retrieval of documents


• Limiting access to documents only to authorized persons


• Minimizing physical movement of documents.

• Field staff could log in to company databases from anywhere in the world and gather correct and up to date information they need


• Accounting practice customers could also similarly log in to their accounts from anywhere, and check their tax returns and other documents securely


• Communication and where necessary, collaborative working, could be more effective with the enhanced facilities offered by the Web


• Web-based specialist service providers could render services at lower costs than in-house staff in many cases

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About Author:
Ademero, Inc. develops document management software. Visit their web site devoted to document management at www.ademero.com. Browse the resources section which includes the largest collection of posts from real users reviewing all of the most popular document management systems available.

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