Accounting firms across the country are witnessing the last days of paper, after a long and agonizing decline. With each e-filed tax return, with each digital audit, with each interactive data model, paper died a little bit more to the point where, now, even the smallest firms boast of being paperless.
Despite all this, though, paper has maintained some presence in the accounting world, hanging onto its relevance by a paper-thin margin. But this will be over soon. Paper, long dying, will finally be dead and, if the opinions of technology thought leaders are any indication, it won’t be mourned.
While the end of paper has been anticipated for years, people like James Bourke, managing director of advisory services at Top 100 Firm Withum, predict that it is finally happening, with the process expected to be complete somewhere over the next few years.
“Five years ago, a lot of paper was delivered to us. Today they’ve digitized that paper. We get PDFs, we get Excel spreadsheets, we get Word docs. That’s what we typically get from our clients: digitized copies of paper we used to get in the past. Going forward, no longer will there be paper, no longer will it be digitized, but it will be data-to-data,” he said.
David Cieslak, chief cloud officer and executive vice president with RKL eSolutions, said firms had long ago come to prefer electrons over wood pulp, viewing paper as just one more thing to digitize. Even in the rare case a client hands an accountant something on paper, they likely won’t be working with it but, rather, the digital copy they make by scanning it. It is at the point now, according to Cieslak, where physical paper is kind of an annoyance and firms have been actively working to have less of it. And that was before the pandemic, which he said effectively landed the final blow.
“I think about COVID and I think about, wow, if there were ever a time to go paperless from an invoice or bill processing perspective, [it’s now that] we’re no longer in the office. … A ton of digital transformation took place in COVID, like it or not. We looked at this and said we had to hurry up and make certain we were able to function and the business was able to continue even in the pandemic,” he said.
This is because it’s become more difficult to work with paper, in part because it’s almost guaranteed to involve a manual process, as paper integrates poorly with modern accounting software. As more firms automate routine functions, paper increasingly becomes an obstacle that they would rather do without, according to Roman Kepczyk, director of firm technology strategy for Right Networks.
“When you look back years, particularly in firms below the Group of 400, those firms used to deliver a lot on paper, whether an organizer, a tax return, an invoice or an engagement letter. Today all those individual components have been automated to where they can be delivered digitally, which is faster, more cost-effective, and has a higher degree of accuracy. So I think we’ll be seeing the elimination of physical paper delivery components,” he said.
Geni Whitehouse, the self-styled “Countess of Communication” who leads the Impactful Advisor, noted this has already happened in a number of areas, such as payments. People today hardly ever write paper checks anymore, given the vast array of alternatives such as online banking and payment apps. While there are a few holdouts, she does not expect them to last long, given the demands of a modern economy.
“All of us doing automation have been doing bill pay electronically forever, but there’s still too many people doing it that way. The electronic payment space has reduced or eliminated the need for paper checks,” she said.
Jennifer Wilson, co-founder and partner of Convergence Coaching, also cited paper checks as something we likely won’t be seeing much longer, alongside near everything that involves money, noting that her children don’t even use cash. Similarly, ink-on-paper signatures are also on their way out as the things one would use them for, like signing a contract, are increasingly online. Wilson said that, as time goes on, the use of paper will start to become a marker that someone is hopelessly out of touch, meaning that even if a practitioner wants to stick with paper, client pressure will force a change anyway.
“If someone sends an attachment and says ‘Print it, sign it, send it,’ people will say ‘Wow, this is the dark ages.’ That could give them pause on wanting to do business [with a firm]. … Just anything paper based is suspicious,” she said.
Like Ciezlak, Wilson pointed to the pandemic as an additional factor — specifically concern about germs. A paper document require a person to send it, a person to deliver it, and a person to receive it, perhaps in the company of other people. Even if everyone is working remote, this means there will still have to be someone who physically goes to the office to pick up the paper, which presented a significant safety risk at the pandemic’s peak.
“We saw with the pandemic, there was a fear of paper, the fear of germs coming to us through paper. It was incredibly uncool for firms to say, ‘Well, our administrative team is going to the office for all these paper checks we’ve got.’ Or worse, client accounting groups cutting checks for clients so they had to force their people go get them and do the work and risk their health and safety and go where the paper was. I think that is completely outdated if you’re doing it that way” she said.
This story is part of an Accounting Today series called “The Frontier,” where we explore the cutting edge of accounting technology through conversations with thought leaders across the country, who will share with us their observations, hopes, concerns and even a few predictions here and there. We’ll see you at the Frontier.