With the emergence of new technologies in recent years, the accounting world is in a state of transition. As a result, paper printing is no longer as necessary as it once was, and could be virtually eliminated within your organization.
Have you ever thought of implementing the “paperless” model within your organization? This model involves keeping paper printing to a minimum, and storing most of your documents and vouchers in electronic format.
Here are a few tips to ensure that your transition to a paperless model is as hassle-free as possible, and that your internal controls still enable you to detect errors and reduce the risk of fraud within your entity.
Planning
The success of the “paperless” shift depends on good planning, the involvement of users from all departments of the entity who will contribute ideas, and above all on gradual implementation.
Computer security
Computer security is not an aspect to be neglected in order to limit the risk of intrusion and data loss. These include firewalls, anti-virus software (which should always be kept up to date) and passwords. Today, a good practice is to use a passphrase, which consists of selecting several unrelated words.
On the other hand, going paperless also means being completely dependent on technology. As a result, having a good succession plan in place becomes crucial, and requires periodic testing to ensure you don’t slow down operations in the event of a problem. Back-up copies must be made frequently and stored in a secure location, outside the company walls or in the cloud.
If reports are saved on the network, it is important to ensure that those who have access to them are authorized, in order to preserve data confidentiality.
IT tools
Going paperless requires you to update your IT equipment, in particular by equipping yourself with several screens, a good scanner and PDF software that will enable you to rename, assemble and modify certain documents.
Archiving
It’s important to develop a system for classifying your data on your network, and to use a uniform nomenclature for your documents to make document retrieval more efficient.
Approval process
Paperless working means that written approvals become computerized.
Let’s take a standard purchasing process as an example. The authorized person approves the purchase order electronically. When the goods are received, the quantities received are reconciled with the order, and a list of discrepancies is generated by the system and monitored regularly. When the invoice is posted, if there are significant discrepancies, it cannot be approved and must be returned to the department manager for approval.
Some software packages allow you to attach the invoice directly to the accounting system. To ensure that no changes are made to the original document, you can use a version of PDF that allows you to cross out the document. To avoid having to scan invoices, ask your suppliers to send them by e-mail. According to the Tax Administration Act, the government only accepts electronic documents if it is possible to retain the original data and consult any changes that have been made to it. Electronic documents must also be kept for the entire required retention period.
Electronic approval must be locked, i.e. no-one other than the person responsible must be able to approve it.
What’s more, payments to suppliers are increasingly made via electronic transfers rather than by cheque. Have you ensured that an authorized signatory other than the preparer approves them online before they clear the bank statement? If not, it would be important to contact your financial institution to implement this control.
Data processing
Many accounting software packages offer the option of importing data directly from bank statements or credit cards. To avoid any risk of errors in the recording of your accounting transactions, it is essential to configure these different types of operations correctly, particularly with regard to consumption taxes and the coding of accounting items.
Training
Such a project cannot be successful without informing and communicating the new processes and the progress of the project to your employees.
In conclusion, to ensure a smooth transition and avoid major difficulties during implementation, make sure you have the right support, that you do it at less busy times, and above all, that you plan it well. Take the time to analyze your processes to determine whether your internal controls are adequate. This could be more profitable than waiting until you discover that errors or fraud have been committed. Finally, training and thoroughness are essential.
Don’t hesitate to contact your experts at Amyot Gélinas for any assistance you may need regarding the impact of “paperless” on your various internal control processes.
Here are some useful links that recommend good practices:
https://cpaquebec.ca/-/media/docs/membres-cpa/reglementation-profession/profession-ere-numerique/guide-cpa-des-bonnes-pratiques-ti_fr.pdf
https://ici.radio-canada.ca/nouvelle/1049690/mot-de-passe-cybersecurite-securite-informatique-conseils
Élyse Langevin, CPA Auditor
Auditor
elangevin@amyotgelinas.com
