White Paper

Implementing the Paperless

Office

Prepared By

FC Hong
X’PERT TECHNOLOGIES
33-01, 33rd Floor, Menara Keck Seng
Jalan Bukit Bintang
55100 Kuala Lumpur
Tel: 2116 5996 Fax: 2116 5999
email: fchong@xpert-ASIA.com
www.xpert-asia.com

Date: 15th February 2008

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Implementing the Paperless Office

Moving your office to a paperless environment is one of the most important steps
you can take to ensure that your firm stays abreast of technology developments
and remains strong amid rapid changes in your profession. We, at Xpert
Technologies, are doing all we can to keep you informed, so you can make
knowledgeable decisions and guide your firm through a smooth transition to the
paperless office. This document will present information about Xpert Knowledge
Solution and help answer some of the questions you have to address when
beginning the transition to a paperless environment.

What is Xpert Knowledge?

Xpert Knowledge is an important tool that provides automatic storage and

retrieval mechanisms for documents that are uploaded to the Xpert Technologies
applications. It also enables you to

• Store electronic documents created by any software in any format.

• Store existing image files and documents.
• Auto index all your electronic documents for easy retreival.
• Allows you to scan all your existing documents.
• Allows you to store all your reports from your existing system -
electronically.

Powerful integrated software such as Xpert Knowledge Solution can improve the
efficiency of your firm and ensure that your office continues running smoothly
throughout the transition to a paperless environment.

How do I use Xpert Knowledge?

There are several ways to store documents in Xpert Knowledge Solution. You
can store program-generated reports, forms, and so on in the Xpert Knowledge.
Finally, you can store electronic images of any document that can be scanned,
such as W-2s, 1099s, tax receipts, or real estate closing documents. You can
store these documents by scanning them and then upload into the Xpert
Knowledge.

What are the benefits of working in a paperless environment?

Xpert Knowledge is more than just a product—it is a powerful method of

implementing a new set of business practices. With Xpert Knowledge, you can
automatically store reports, returns, invoices, client communications, and so forth
on your centralized hard drive, eliminating the need for cumbersome paper files.
Once you begin implementing the paperless office, you can improve your firm’s
speed, security, accuracy, and ease of document retrieval, along with eliminating
the need for additional physical storage space for department files.

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Speed — By printing returns, reports, and forms directly from your Xpert
Knowledge Solution, you will increase your firm’s processing speed in a number
of ways. Filing time will be greatly reduced since the middle step of placing the
paper document in the file folder is eliminated. When a staff member needs to
see a document, instead of having to locate the paper file, they can simply open
Xpert Knowledge and quickly access the electronic document. Also, staff
members will be able to provide requested documents to clients almost
immediately by e-mailing documents to clients in Portable Document Format
(PDF).

Security — The paperless office increases security by keeping sensitive

documents in an electronic format. With Xpert Knowledge, there is no need to
keep physical copies of client documents and, therefore, no need to spend time
shredding documents—you can simply scan documents and have it uploaded
into the Xpert Knowledge for storage.

Ease of retrieval — Xpert Knowledge makes it easy to retrieve documents

because it allows you to establish a standard file structure across clients. When
you create a folder for one client or project in the Xpert Knowledge, that folder
name is subsequently available to every authorize user.

Accuracy — Xpert Knowledge will improve your firm’s accuracy by ensuring that
you have static copies of all reports, returns, and so on that you extracted using
Xpert Technologies programs. Once you print a document from your system, you
know the information in that document cannot be mistakenly changed, as could
happen within the actual software application.

Space — Hard drive space is considerably less expensive than physical storage
space. If your computer system is newer, you probably already have sufficient
hard drive space. If you’re working with an older computer system, you may need
to make an initial investment in additional hard drive space when you begin
storing documents in the Xpert Knowledge.

Why do I need Xpert Knowledge?

Xpert Knowledge ensures the accessibility and accuracy of documents. Because

keeping data files is different than storing program output in Xpert Knowledge,
when you rely on viewing documents such as reports and tax returns through the
program in which they were created, you are limited as to where you can view
the documents. For example, to view a client’s 1999 file in your back end
system,, you would have to open the client’s record in the 1999 version of
software. If you stored that return in the Xpert Knowledge, you could view it on
any computer, whether or not the 1999 software program was installed.

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Another reason for storing electronic copies of documents that are generated to
Xpert Technologies programs is the dynamic nature of data. Once you have
printed the document to the Xpert Knowledge, you have a static copy of the
document. So if a client calls asking about a number that appeared on their
statement and you stored the document in the Xpert Knowledge, you can access
the exact. If you were to rely on looking up the information in your back end
system, you may find that your numbers don’t match the document that was
filed—perhaps a staff member opened the client data file and accidentally
changed the nature of a particular item of transaction. With Xpert Knowledge,
you will always have an exact record of the information and documents you’ve
processed. With a few simple mouse click or keystrokes, you can retrieve a
precise copy of any document, client document, report, or invoice within seconds.

How should I organize documents in the Xpert Knowledge?

Once you decide to go paperless, the next step you need to take is planning the
type of file structure you want to set up in the Xpert Knowledge. Because Xpert
Knowledge creates a folder using the knowledge map, there are up to 4 level of
directory structure, which will be organized by its category, group, type and class.
A virtual link known as hierarchy will be used to link it up. Any documents you
upload to Xpert Knowledge product will then be placed in a pre-defined
knowledge hierarchy folder.

Since you can create additional association folders for each category, you can
organize scanned images of supporting documentation by year or by a
combination of year and type. For example, you can create an association folder
named “2000” where you would store the client’s supporting documentation from
the year 2000. While arranging documents by year makes archiving easy, clients
with large amounts of supporting documentation can make organization and
accessibility more challenging. If this is the case, you may want to create
association folders according to the type of document you will be storing. For
example, you could create one association folder for 2000 tax documentation;
another for 2000 source documents such as W-2s, 1099s, and tax receipts; and
a third for 2000 client correspondence. This way, not only is it easy to find a
particular document, but it’s also easy to archive all of the documents from a
particular year.

Scanning documents individually means that you would also need to give each
document a unique name. While naming documents individually makes
document retrieval easy, if you don’t often refer back to the documents you place
in a folder file, this may be unnecessary and you might choose to scan the
documents in groups. For example, you could scan all supporting tax
documentation into a single image group named “Tax Documentation.” If you
need to view these documents in the future, you can simply open that folder and
page through the documents until you find the desired document. Also, scanning

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groups of documents allows you to accomplish other tasks while a large job is
being scanned.

Issues to consider when transitioning to the paperless office

Because every firm is unique, the implementation of the paperless office will vary
greatly from firm to firm. You’ll need to consider many questions during the
implementation process. To make the decisions that are right for you and your
staff, you will need to look closely at your firm’s processes, consider the
ramifications of the possible decisions, and decide from there what will work best
for your firm.

Examining your current processes

The first step toward implementing the paperless office is deciding if there are
changes to make in your current processes. Although you do have the option of
simply using your current processes in a paperless environment, this is an
excellent opportunity to examine them and make changes where appropriate.

If you believe that your firm’s processes could be modified and made more
efficient, a good way to identify problem areas is to gather everyone in the firm
(or a representative from each department if your firm is large) and record your
current processes. This allows you to identify your firm’s processes as they are
actually practiced, and it allows staff members to be involved in improving the
way the firm works. Once you’ve identified your firm’s actual processes, staff
members can suggest changes and you can decide whether or not those
changes would be beneficial.

In addition to determining your processes, involving all levels of staff in the early
stages of implementing a paperless environment will give you a chance to
explain the benefits of the paperless office before the transition actually begins.
This gives staff members a chance to get comfortable with the concept of the
paperless office and understand the ways in which they will benefit from working
in a paperless environment. Also, staff members may feel more comfortable with
the transition if they know that their concerns are being addressed and that their
feedback is valued.

Even if you don’t decide to change your processes, there are still a number of
issues to consider before you start using Xpert Knowledge. The following
questions will help identify the issues you need to consider before transitioning to
a paperless environment.

Who should scan documents into Xpert Knowledge Solution?

When you consider the responsibility of scanning documents, you might start by
looking at how you currently handle photocopying responsibilities. Is your

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administrative staff or your professional staff responsible for the majority of the
copying? Or, perhaps you have established guidelines—if the job is three pages
or less, the accountant does the copying, if the job is four pages or more,
administrative staff does the copying. Whatever your answer, look at whether or
not you’re making the best use of your employees’ background, education, and
skills. You may want to think about the turnover rate of your administrative staff
when you consider having them scan documents. If the turnover rate is high, you
may wind up spending a lot of time training your administrative staff on the
scanning process and file structure within the Xpert Knowledge. Better still you
can choose to outsource this process to us.

Who should decide which documents are scanned into or uploaded to the
Xpert Knowledge?

If you are not changing your processes, whoever has been copying documents
will simply scan those documents instead. Similarly, any documents that were
previously printed from your solutions or programs have to be uploaded to the
Xpert Knowledge based on the knowledge hierarchy.

If you are changing your processes, you should look at whether or not
documents are being filed consistently. If documents are not being filed
consistently, you may want to appoint someone to create guidelines that detail
exactly what documentation needs to be kept for each type of client and each
type of work product (for example, tax returns and financial statements). The staff
member would, of course, be free to keep additional documentation, but you
would at least know that the mandatory items have been stored in the Xpert
Knowledge.

What type of documents should be stored in the Xpert Knowledge?

You will want to store anything in the Xpert Knowledge that you would normally
place in the client’s paper file. Determining the exact documents that you store in
the Xpert Knowledge depends on your firm standards. As mentioned above, you
may want to create guidelines that detail what documents need to be kept for
each type of client and each type of work product.

By storing in the Xpert Knowledge all supporting documentation, all

correspondence with the client, and any reports, returns, or forms you generated
for the client, you will have an easily accessible record of all source documents
for each client.

When you think about which documents you want to store in the Xpert
Knowledge, you may be concerned about hard drive space. Keep in mind that
the RM300 average cost of 100 gigabyte of hard drive space (as of July 2007) is
far less expensive than the average cost of a metal filing cabinet and cost-per-
foot for office space. Still, you don’t need to keep anything in the Xpert

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Knowledge that you would not have kept in the client’s paper file. It may be
tempting to scan everything, but you may find that organizing these documents
becomes too difficult for the additional documentation to be used effectively.

How do we communicate the decisions that have been made to our staff
members?

If you haven’t made any significant changes to your processes, you may find that
a staff meeting is a suitable forum for announcing the move to the paperless
office. If you have made changes to your processes, you may find that it is not
only helpful but almost critical that you record the paperless office rules and
procedures to avoid confusion. If you don’t record the decisions, you may find
that each staff member is handling his/her clients differently, which may result in
confusion if that staff member leaves the firm or the client is transferred to a
different staff member. This kind of documentation can also be helpful for training
new staff members and for alleviating concern that staff members have about
their role in the paperless office environment.

Choosing and placing scanners

Once you’ve examined your processes and recorded any changes you wish to
make, you will need to decide what type of scanner(s) will work for your firm and
where to place
the scanner(s) in your office.

Where should we locate scanners?

If you’ve decided that each staff will be responsible for scanning documents for
his or her department, you may decide that there should be a scanner at each
staff workstation. No matter who is responsible for scanning, you may want to
purchase sheet-fed scanners for the administrative area (assuming that large
jobs would be scanned by administrative staff) and flatbed scanners for
professional staff. One advantage to having a sheet-fed scanner is that you can
set up large jobs to scan unattended. (Note that, when scanning in unattended
mode, you can scan documents only in groups, not individually.)

How do I choose a scanner?

The scanner you choose must have a TWAIN interface. With TWAIN, you can
access the scanner from the your PC in which you want to keep the image, scan
the image, and save it and upload directly into the XPERT Knowledge. TWAIN is
the standard for scanner-control software—nearly all scanners available today
feature a TWAIN interface.

Determining processes for scanning department documents

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One of the biggest changes to your firm’s everyday processes will be the
scanning of department documents. There are decisions you will need to make
concerning scanning beyond deciding which documents merit scanning and who
should do that scanning. You will also need to determine whether or not you want
to scan legacy documents and at what point in the process you should scan
documents.

Should we scan legacy documents?

You may be tempted to go back and scan documents from previous years.
Although this is certainly possible, keep in mind the amount of time this process
could take. You will probably find that it is more cost effective to keep your old
paper files as they are, and to use the Xpert Knowledge only from today forward
or a cut off point.

On the other hand, since hard drive space is inexpensive, if you find that you
could use the physical space that is currently being take up by one or two file
cabinets more effectively, you may want to do some legacy scanning so you can
get rid of those file cabinets. Also, if you have staff members who have extra time
during the off-season, you may want to make use of that time by having them
scan at least some of your legacy documents into Xpert Knowledge.

At what point in the process should we scan documents?

You may find it best to scan documents as soon as you receive them so you can
return the original paper documents for filing as soon as possible. Xpert
Knowledge will have a remarks feature that will allow staff members to add notes
to be attached to the scanned documents from within the Xpert Knowledge so
there will be no need to worry about how you can retrieve the documents later.

How should we scan supporting documents?

Once you’ve decided the point at which you want to scan documents, you need
to decide how you want to scan them. You may find that the easiest way to
handle this is to simply store every report, return, receipt, and so on in the Xpert
Knowledge. Although storing some extra documentation in the Xpert Knowledge
won’t hurt, keep in mind that unnecessarily large amounts of extra documents
may not only cause your computer to run less efficiently, but it may also
complicate the process of finding a specific document. Also, scanning every
supporting document may be costly in terms of labor.

Other considerations

There are several issues to take into consideration beyond examining your
current processes and choosing and placing scanners. Your firm will need to
decide what documents merit electronic storage, choose a method of archiving,

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select the appropriate media for archiving, and consider the best ways to train
your staff in these new processes.

The following items will help you make the most informed decisions in answering
these and other important questions.

How and when should we move electronic documents to an archive?

You will probably find that, unlike paper files, you want to keep the documents
you’ve stored in the Xpert Knowledge indefinitely, allowing you to easily retrieve
older files without having to access archived files. If you feel the need, you can
eventually archive specific clients or specific documents onto backup tape and
delete the files from your hard drive or network. Or, you might set a time period
for archiving, such as archiving anything older than seven years which is the
mandatory requirement of the authorities.

What type of media should we use for archiving?

While you will certainly want to continue with your current daily, weekly, and
monthly backups, because hard drive space is so inexpensive, you may find that
you never need to archive data in a manner that would mean deleting files from
your hard drive.

If you do find that you would like to archive certain client files, either by year or on
a client-by-client or project-by-project basis, you can easily do it as and when you
like to. You have several options when it comes to archiving, but the biggest
factor that should affect your decision is the projected life span of whichever
media you choose.

What type of training will be needed on software and hardware?

You might face some resistance during the implementation of the paperless
office. You will probably run into a few people who resist changing the way they
work. Training on software and hardware is one of the ways that you can deal
with resistance and make the transition easier for you and your staff. Also, as
mentioned above, early participation by key staff members can alleviate
concerns.

Fortunately, Xpert Knowledge is relatively simple to use. Likewise, scanning is a

relatively simple procedure. As long as someone in your office is comfortable
experimenting with Xpert Knowledge and with scanning, you may find that
training on hardware and software is not necessary beyond having someone who
is comfortable with scanning assist a co-worker who is not so comfortable before
he/she is required to scan documents on his or her own.

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Xpert Technologies also offers on-site consulting services that include
implementation and product training.

How do we start implementing the paperless office in our everyday work?

The most important thing to remember when you start to implement the
paperless office is to go slowly. Only you can decide how best to make the
transition to a paperless environment, but keep in mind that the easiest time to
transition to the paperless office is during the off season with just one or two staff
members working with one or two clients.

Using this approach, the staff members can figure out what works best and share
their experiences with the rest of the firm. If you implement slowly, you can get
the Xpert Knowledge set up exactly how you want it, then quickly move the rest
of your staff and clients into the paperless environment.

While it may be tempting to just jump in and start “going paperless” with all of
your staff members and clients at the same time, this might prove to be
problematic, especially for larger firms.

Planning is another very important part of implementing the paperless office. The
more time you spend planning and preparing for the transition, the more
smoothly it will go. Also, if your staff members feel that the decision to go
paperless has been thoroughly thought and planned out, they are more likely to
be receptive to the concept of the paperless office.

Moving forward with the paperless office

As the “Information Age” continues, we find our profession changing dramatically

as new technology emerges, allowing us to refine the way we do business and
work smarter. We’ve already seen many significant changes to the way we work
in the accounting profession, and the opportunities that came with those changes
will continue to occur at an increasing rate.

At Xpert Technologies, we will do everything we can to help you stay on the

forefront of technology and keep abreast of these changes, to turn them to your
advantage and use the latest technology to keep your firm running strong. The
paperless office concept and the technology to make the concept a reality is just
one of these opportunities.

As time goes on, your clients are going to expect to receive documents from you
in an electronic format. Eventually, you will request documents from your clients
in an electronic format. For example, instead of having your staffs give you
spreadsheets in hardcopy format, you would ask them for the actual .XLS file.
With careful and proper implementation, the paperless office can only improve
your practice. As always, we at Xpert Technologies are happy to assist any way

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we can—we are prepared to help you make this transition as you strive to serve
your clients more effectively.

This report is brought to you courtesy of

XPERT TECHNOLOGIES www.xpert-asia.com

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