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Paperless Accounting Systems

In: Business and Management

Submitted By flash361
Words 413
Pages 2
Paperless accounting firms are becoming increasingly prevalent in a rapidly evolving business environment. A substantial number of firms are researching and implementing paperless systems as a means to increase efficiency, provide a higher level of reliability to customers, and decrease costs. This paper will examine some of the advantages and disadvantages of paperless accounting, some necessary steps in implementing the new technology, as well as the relation between paperless systems and the COSO Internal Control Framework. There are many reasons a firm could desire to change from a paper-based system to an electronic system. Substantial research and analysis should be done on both the current work system and the prospective paperless system to determine if a firm is capable of making the switch, and if the switch would be beneficial by a cost/benefit level. In determining if a firm should transition to a paperless work environment, it is important for the company to examine the costs associated with both options. Some of the costs associated with paper-based business environments include: * An average of $20 in labor costs to file a document * An average of $120 in labor costs searching for missing documents * An average of $220 in labor costs on reproducing lost documents * $24 to manually produce an invoice
In determining the costs associated with the implementation of a new paperless business environment, the firm must examine the needs of the company. Paperless accounting systems vary greatly, and installation and operating costs are dependent on the unique features of each system. Firms should research possible paperless accounting features and match them with the needs of the company. After obtaining an understanding of the potential features of the paperless system, the company should decide if the costs associated with implementing and operating the system are less than the expected benefits obtained through the system. The more complex and exhaustive the paperless system is, the more expensive the system will be. It is not in the best interest of the firm to implement an expensive paperless system that includes features not necessary to maintain efficient and effective operations. Another factor firms must consider when evaluating the costs of a new paperless system is federal tax incentives created to encourage firms to make the change. Tax credits, exemptions, and discounts for businesses that adopt a paperless system have been created by the government in recent years. These tax incentives have helped stimulate use and development of paperless technology in the accounting field.

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