Safeguard Accounting Documents With ECM

Written by Mary Williams | Oct 30, 2014

Payroll details, financial information for vendors and customers — much of the data handled by your accounting department is sensitive or confidential. Safeguarding these accounting documents is difficult and time-consuming in a paper-based system, which is why some companies are turning to enterprise content management (ECM).

When it comes to ensuring confidentiality in a paper-based system, there’s no sure way to monitor who’s looking at a certain accounting document. If you’re using ECM, however, you’re able to document all access to the system with a login trail. In addition, it helps your accounting department restrict access to individual documents and groups of documents, so that only specific individuals or roles have access to them.

Another related issue is how to prevent people from modifying or “doctoring” financial records and invoices. In the past, if someone replaced or removed paper documents from a filing cabinet, you’d have no way of knowing until you needed that information — possibly years later. Your file cabinet doesn’t tell you if an item is missing; it’s just not in the cabinet.

An ECM system makes these activities much more difficult, if not impossible. Replacing a document with a new version would leave a record of the change, along with the login trail. And your staff is able to quickly determine whether any of the reports or invoices put into the accounting system have gone missing. Similar safeguards apply to revenue documents — for example, the ECM system could be used to flag any sales that lack a supporting purchase order from a customer.

Theoretically, a highly motivated individual could get around these safeguards in order to alter a document or create a fictitious invoice or purchase order, but ECM is making these malicious activities increasingly difficult.

In addition to these security measures, many accounting documents come with legal requirements that regulate how they are stored and secured. Your ECM solution ensures that you always have an audit trail for important documents—a clear record of which user accessed a document, as well as details about the time of access and the document version.

Regulations for financial compliance also include retention schedules that specify how long you have to keep certain documents, as well as rules for protecting important records, such as keeping a backup in the event of a flood, fire or other disaster.

With paper, you could make photocopies and place them in offsite storage, but that’s a cumbersome, expensive and difficult disaster recovery method. With ECM the process is much easier: Simply store your original digital files on-premises and automatically synchronize those files to cloud-based storage or store and access your documents online from the beginning.

Retention schedules pose a particular challenge for paper-based document management. Best practice is to organize your files by document type, since some must be kept for five years and others for 10 years, for instance. But this process proves very difficult with a paper system.

Let’s say you have a customer file that includes an invoice, which you’re able to discharge after seven years. But it also includes some maintenance documents that you have to keep for 10 years. You can’t simply get rid of the whole customer file after seven years — you have to keep going back through your files and discarding them at different times, requiring lots of staff time.

With ECM on the other hand, each document is automatically assigned a file type and given a discharge date. Now, you’re able to quickly sort all of your documents by type and either approve documents for discharge or specify that they should be kept longer.

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