Ditch Your Basic DMS: Why Generic Software Isn't Good Enough

Let’s be honest — you might be tempted to settle for a basic document management system (DMS). After all, if it stores documents, it does the job, right? Well, not exactly.

Your accounting firm needs better than basic. Investing in an advanced, purpose-driven DMS allows you to scale your operation, increase efficiency, and reduce costs you’ll inevitably incur when your basic DMS solution falls short.

The pitfalls of a generic DMS

Sure, you could save some cash with a basic DMS solution while still getting some of the essential tools you need. But these solutions won’t have them all — which means you could lose time, revenue, and customers.

Lack of industry-focused features

It’s true: basic DMS solutions can store your documents. But that may be where the benefits end. Solutions designed without a specific industry in mind may not connect with tax software, follow file structure rules, or offer the automated workflows necessary to increase productivity — which means more work for you at the end of the day.

Imagine when tax season hits and you have to manually create folders for hundreds or even thousands of clients. Then, you need to go back to search for each folder to save your files in and enter information from each tax return. This is enough to make any accountant want to run screaming for the hills, especially when they’re already drowning in tax season. These manual tasks waste your team’s time and can affect productivity, reducing your potential output (and revenue).

Compliance and security issues

Your clients trust you with their data. But many generic DMS solutions lack the security certifications to maintain peace of mind about your clients’ data. Unlike advanced DMS solutions, which use FTC and IRS-required safety protocols, a basic DMS could be broken into by someone looking to cash in on your clients’ data.

In 2024, the average cost of a data breach was $4.88 million. While this may not be what your firm loses, the loss of trust associated with even the slightest data breach can be detrimental to your practice. Not only will your firm have to work harder to maintain the clients you currently have, but you could also face negative public backlash that drives future clients into the arms of your competitors.

Interconnectivity challenges

Moving file after file from one software to another can be a hassle. Although some basic DMS solutions have interconnectivity, they may not be compatible with many of your essential tools. This can lead to an increase in unnecessary manual data migration.

Manual data transfer creates opportunities for human error, which can mean legal and financial trouble for you and your clients. Without the help of integrations and automations, your team can risk creating misnamed folders, incorrect folder structures, and more. This lack of interconnectivity will negatively impact your team’s available time and efficiency — potentially leading to surprise costs.

Absence of client-facing tools

You and your clients should work together to achieve the best possible outcomes. But with basic DMS solutions, you may be required to invest in a secondary client-facing portal solution or manually manage client document uploads, burdening your team during their busiest season.

A lack of client-facing tools means your team must manually create or copy a source documents list, email clients individually, and work with clients to upload documents manually, email copies of important files, or even drop hardcopy paperwork off in the office. Then, your accountants must sort through submitted documents, rename files to fit your firm’s standards, save them in the right place, and hopefully stay within your productivity goals.

This process will make any accountant’s head spin, especially during the busiest time of the year. That’s why you can’t risk cutting corners with a basic DMS and why advanced DMS solutions offer a much better return on investment.

Advanced DMS solutions provide the benefits you need

The upfront costs of an advanced DMS solution may seem like a significant investment for your firm, but the truth is that a basic system could cost a tremendous amount more in the long run. That’s why advanced DMS solutions, like SmartVault, give your team the tools they need to get the value they expect now and in the future.

Accounting-specific workflows and solutions

An advanced DMS solution is designed for exactly what you need. No more finessing basic features to make an acceptable (yet flawed) workflow; advanced solutions have accounting-specific capabilities that make your job easier, including:

• Automatic, templated folder and workflow creation allows you to get straight to work without manually configuring the system each time you add a client or project. This not only reduces the required work per client but also ensures consistency across your filing system.
• Automated routing and distribution can send files directly to your clients’ DMS folders from integrated tax softwares like UltraTax and Drake to minimize manual data entry. Automating this process has the potential to double your client base by streamlining a typically tedious process.
• eSignature collection is transformed — requiring just the click of a button. Advanced DMS solutions let you easily request signatures, enable clients to eSign while on the go, and automatically route completed forms into the designated folder.
• Activity tracking keeps your team in compliance and maintains the security of your documents by auditing access, activity, and downloads through a comprehensive log. The SmartVault Activity Log, for example, can also be viewed and exported to increase the utility of this essential information.
• Auto lock and version control are available in many advanced document management systems to avoid potential errors. These advanced features prevent simultaneous edits and allow your team to access previous versions of your documents if necessary.

These industry-driven features not only reduce the hassle of your firm’s day-to-day work, but they can also increase productivity. Some firms have even saved up to $150,000 per year with the help of advanced DMS solutions.

Firms can save so much using these solutions because they reduce the time required to perform essential tasks like returns. In fact, some firms can shave off around 10 minutes per return through automation tools. Basic DMS solutions don’t offer the same functionality and may even create more work in the long run.

Industry-standard security certifications

Under the Gramm-Leach-Bliley Act (GLBA) and the Safeguard Rules issued by the Federal Trade Commission (FTC), your firm is required to protect your client data. A basic DMS won’t provide you with the necessary security.

Advanced DMS solutions offer equally advanced security certifications. For example, solutions like SmartVault provide SOC 2 Type 2 compliance and AES 256 encrypted software to maintain the integrity of your client data. This software also helps you adhere to regulations such as:

• FTC
• IRS 4557
• HIPAA
• ISO
• GDPR
• FINRA
• SEC
• GLBA
• CCPA

This added layer of security will not only help you remain compliant with federal and industry regulations, but it can also increase the level of comfort potential clients have in doing business with your firm.

Tech stack integration

Basic DMS solutions may offer a way to store your documents, but many leave you on the hook for transferring data from these files to other solutions in your tech stack. Advanced DMS solutions provide a way around this error-prone process by integrating with many commonly used solutions.

Advanced DMS software like SmartVault connects to your most-used tax software, including Intuit and Thomson Reuters, to automatically transfer documents from one solution to another. This helps you maintain the integrity of your data and phase out inefficient processes that are holding back your potential revenue per return.

Client collaboration solutions

If your clients are emailing or, even worse, bringing physical documents into your office, you need a better system. That’s why advanced DMS solutions offer client portal and document collection tools to streamline this process.

Document collection is simple with helpful features like Request Docs, which creates a custom list of source documents you need and sends it to your client either one at a time or in bulk. Once your client gets this email, they can upload documents remotely, and their submissions are auto-saved in the correct client folder.

SmartVault elevates your document management process

Basic DMS solutions lack the benefits that make investing in an advanced DMS solution a clear necessity for your business. Finding the right partner and integrating these solutions can safeguard against data breaches, reduce costs associated with your current process, and enhance the way you do business.

Partnering with an advanced DMS software solution like SmartVault supercharges your team and takes your firm’s capabilities to the next level. This addition to your tech stack can elevate how you do business — even if you already use a practice management solution. So don’t settle for basic; invest in your success by adding an advanced DMS solution to your tech stack today.