Paperless Technology
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--- Canada and the CRA--- Scanning documents does NOT meet federal (Canadian General Standards) imaging requirements. CRA's publications RC4409 Keeping Records, GST Memorandum 15.1 General Requirement for Books and Records and 15.2 Computerized Records make it sound like scanning would be an acceptable practice. However, RC4409 has a very important line that is easily missed: "Your electronic records must meet the requirements for all records, as listed in Chapter 1 [...] Scanned images of paper documents, records, or books of account that are maintained in electronic format are acceptable if proper imaging practices are followed (my emphasis) and documented." I spoke with a CRA specialist on electronic recordkeeping. Here is his advice. If you scan documents, you must still retain the original source document for the CRA auditor to review. Why? Because scanned documents can be altered ... therefore they are not submissible in a court of law as evidence. The point to understand here is that implementing paperless technology is not as straight forward as it looks. Scanning IS NOT the same thing as imaging. You are probably thinking, "So why bother to scan?" Two words ... Audit Proof ... or Audit Ready. Wouldn't it be great to have all your original source documents boxed in storage? If you get audited, you are ready. In the meantime you have the convenience of not dealing with paper when you look something up. I personally think it is easier to search my computer than a box of paper. Source: CRA IC-05-1R1 Electronic Record Keeping - paragraphs 24 & 26 |
--- U.S. and the IRS --- IRS Rev. Proc. 97-22 "provides guidance to taxpayers that maintain books and records by using an electronic storage system that either images their hardcopy (paper) books and records, or transfers their computerized books and records, to an electronic storage media, such as an optical disk." I have seen various U.S. websites say Americans can shred / destroy their original receipts once they are scanned ... and if they are also legible and readable. (See Section 7 of Rev. Proc. 97-22 Destruction and Deletion of Original Books and Records) Section 4 (5) talks about "(5) For each electronic storage system used, the taxpayer must maintain, and make available to the Service upon request, complete descriptions of: (a) the electronic storage system, including all procedures relating to its use; and (b) the indexing system (see section 4.02 of this revenue procedure)." I would check with the IRS (or your lawyer) to make sure that scanning is considered the same as imaging ... because the procedure talks about imaging not scanning ... and in Canada, they do not have the same meaning (see tip box above). Section 10 of Rev. Proc. 97-22 has contact information if you have a question. |
An Interview With Brooks Duncan
Author of the Paperless Document Organization Guide
I'm delighted that Brooks Duncan, author of The Paperless Document Organization Guide was willing to chat with me about his eGuide. Warm up your tea cup and join our discussion about utilizing paperless technology effectively.Brooks, what do you do?
I'm the Publisher of DocumentSnap.com, a website devoted to helping individuals and small businesses go paperless by turning piles of paper into an organized, electronic system.
Why did you create a eGuide about how to use and organize paperless technology documentation?
By far the most common question I get from blog readers and subscribers to my Paper Cuts newsletter is "once I have scanned my documents, what do I do with them?". Since I was getting that question so much, I decided to put together an easy-to-follow guide to help people figure out what to do.
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Someone who has started down the path of going paperless and is stuck, or is not sure where to start.
An individual or small business owner who is tired of looking all over the Internet for bits and pieces of information, and would like to just have everything consolidated in one place.
Many of my readers like doing everything themselves and messing around with crazy workflows. That's great, but this guide is probably not for them. It is for someone who just wants to get going.
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Will your eGuide help work from home business owners organize their bookkeeping receipts? Would bookkeepers be able to use this system to organize their client's e-records?
There is some material on dealing with receipts and client records. This is not specifically a bookkeeping guide, but I believe the concepts will apply.
How should small business owners use your eGuide to get the most from it?
There is a Quick Start page at the front of the PDF portion, so I would recommend at the start just focusing in on the areas where the business owner has the most questions. I would also start with the workflow diagrams and the videos (at the Specialist level). Many people find it easier to see how things are done rather than read it in a document.
Other than that, focus in on naming conventions and organization structure. Those are the biggies in my opinion.
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How much time do you estimate it takes to setup a paperless bookkeeping filing system?
It is difficult to put a number on it because it depends on whether a bookkeeper will just be using folders in the operating system, a piece of software, and which scanner he or she will be using.
I recommend starting with a small test first to that you get the hang of the workflow, then expanding from there. That way the initial time is not too bad, maybe a few hours, and then any changes are incremental.
I tried to keep the eGuide at a non-techie level as much as possible. The key concepts (naming, organization, finding) shouldn't take much computer skill at all. There are more technical areas (such as encryption, tagging, and the like) if people are into that, but I always advise people to ignore the stuff they are not ready for, and then come back to it on an as-needed basis. Take what you need and forget the rest.
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Thank you Brooks for talking about how your eGuide can help us utilize paperless technology effectively and how to systematically create and organize a paperless document management system.
The Filing Systems - Links
Go To - Going Paperless - Free eCourse
Go To - Bookkeeping in a Box ... Easy Office Filing System
Go To - A Portable Document Filing System If You Work Out Of Your Vehicle
Go To - Simple Filing System Suggestions
Return to Top - Paperless Document Organization Guide
Return to "The System" Section - Developing Your Accounting System
Return to the Bookkeeper's Tea Shoppe
Return to Home Page - Freedom is the Goal, Right?
New! Comments
Have your say about what you just read! Leave me a comment in the box below.Paperless Action Plan
4 week instructor led class
When: Thursdays 5 PM PT
Seminars: February 23 to April 12
Office Hours: March 1 to April 19
Where: Virtually
Registration closes today, February 22 at 5PM PT. Class begins tomorrow, February 23.
Please let Brooks knows I recommended the class to you.
An Interview With The Author and Publisher
Click here to see my interview with Brooks as we discuss his system to get the most out of your paperless technology such as:- Who is the eGuide for?
- Why did you create the eGuide?
- How should small business owners use your eGuide to get the most from it?
- What level of computer skills or technical ability does a person need to follow your eGuide?
Customize Your Purchase
All packages cater to ... Windows or Mac platforms- The Paperless Practitioner includes
- basic guide, no service - $47 USD
- audio interviews with clients and transcripts
- The Paperless Specialist includes
- basic guide, "hands off" Screencast service - $67 USD
- audio interviews with clients and transcripts
- audio interviews with professional organizers and transcripts
- video Screencast instructions and demonstrations by Brooks
- The Paperless Master includes
- basic guide, affordable coaching service - $97 USD
- audio interviews with clients and transcripts
- audio interviews with professional organizers and transcripts
- video Screencast instructions and demonstrations by Brooks
- two one hour group coaching calls that are recorded for you to play back