Getting the Paper out of Working Papers: 5 Benefits of a Digital Process
Working papers will be familiar to almost anyone in the accounting profession. But despite their name, today’s working papers don’t require “paper” at all.
So what is a working papers accounting definition? They are summary documents used by accountants and auditors to prepare financial statements. They act as supporting documentation that organizes and supports up the information found in management reports and financial statements, and they also summarize information found in other client documents. While they are an essential part of any accounting practice, their preparation has a deserved reputation for being manual, arduous, and needlessly time-consuming.
Why the Bad Reputation?
Largely, it comes down to how manual the process has traditionally been. Working papers have usually been prepared using Word and Excel, with physical printouts organized in binders. The working papers were reviewed on paper, and if changes or revisions were required, those changes had to be input by hand and new copies printed up, collated, and then transferred to the binders. Sign-off had to be documented by physically initialing and dating the paper documents (usually in multiple places), and those binders of paper were then filed away.
Surveys suggest that at least 40% of accountants who are sole practitioners or members of small partnerships in public practice continue to produce paper-based working paper files.
The good news for all accountants is that in 2020 the working papers process can now be managed easily and efficiently digitally in the cloud—all without the need for paper at all.
The Benefits of Digitizing Your Working Papers Accounting Process
As more and more once-paper-based processes have gone digital, it should come as no surprise that working papers would follow suit.
These are incredible benefits to accountants and accounting firms to having a streamlined, electronic working papers process that allows for planning, working with, and reviewing documents on screen, and that completely eliminates paper.
Here are five key benefits to a digital working papers process.
- Work more efficiently and effectively
Perhaps the chief benefit of a digital working papers process is the speed and efficiency that it lends to the creation of these documents. Digital working papers allow accountants and their firms to collaborate seamlessly not only with each other but with their clients, all while securely managing document requests and ensuring a smooth flow of information back and forth in real-time.
Cloud-based systems also mean that you don’t need to connect to the office network to continue work on a your working paper file — you can do it all securely via the web. This is a huge advantage when you’re in the field on an audit, or when (like now) you have to work from home.
- Optimize review and audit process
The speed and accessibility of digital working papers also have benefits for reviewing and auditing processes.
With preparers and reviewers not always in the same location, there is an inherent delay in traditional processes. With a digital working paper software, however, two-way, real-time communication and real-time electronic alerts, speeding up the development process considerably.
And because the working paper is accessible via the cloud, it’s always just a click away, even when you are in the field and not connected to your office network. Gone is the need for printouts, manual entry, and all those binders.
- Ensure firm standardization
A centralized cloud portal makes standardization and automation of the file preparation process a snap.
With a digital record like a spreadsheet available securely online, you can see and check all formulas and trace dependents without the need for constant reprinted and markup. Formatting oddities, like variable font sizes and strange margins, will be a thing of the past and ensure uniformity across all auditors and projects.
Likewise, depending on your digital solution, there are often downloadable templates available that produce client-ready financial statements and integrated working papers. These can be easily customized to produce new standardized formats for your firm or practice.
- Produce next-generation financial reports
As above, standardized, downloadable templates can enhance your ability to provide next-generation financial reports to clients. Because of the malleable, digital nature of these cloud-based reports, you can establish both baseline formats for use with all clients, as well as customized statement looks or forms that include specific, customized information of use to specific clients or partners.
- Easily integrate with other software
The cloud-based digital working papers also have the advantage of being able to integrate with other software. With proper integration between programs, your working information can be synced not only with your clients but also between your cloud engagement file and your digital solution.
If you’re in need of a cloud-based digital working paper solution, Caseware Working Papers could be the right fit for your needs. Learn more about Caseware Working Papers today.