Last week, I looked at some of the benefits of document management (DM) software, a technology that tends to be heavily underused by corporate tax departments. I focused on these systems’ ability to improve access to materials that you might need to find in a hurry — for example, if the IRS comes calling.

Here are a few more reasons to take a good look at these tools:

Secure storage and retention. Document management systems can enhance data security and help companies to meet regulatory requirements by enabling users to track changes in important documents. And they can help you ensure that the important stuff doesn’t get tossed. “Whether it’s for sales tax, income tax, or property tax, you’re dealing with not only different periods of document retention, but also different types of documents that need to be retained,” says Scott Wrag, managing director with CBIZ Tofias in Boston and leader of the firm’s tax services group. “A document management system can enable you to define the protocols for each type of document and retain it for the appropriate amount of time.”

Better workflow management. A good DM system can help you move beyond relying on tickler files and staffers’ memory to meet myriad state and federal reporting dates. You can apply rules and roles so that you always know when a form needs to be filed and who’s responsible for filing it, notes Gregg Bieri, manager of new records business development with Oce Business Services. “You can create a rule that says, for example, that every month or every quarter everything related to the State of Colorado needs to be routed to this particular person or workflow function. The system can manage all of that content and workflow for you to really facilitate better reporting and better action on the part of the tax department.”

Enhanced business continuity planning. The habit of keeping tax records in boxes and file cabinets, as many companies still do, conjures up the nightmare disaster scenario of burning buildings and crucial papers flying through the air. Resuming normal business activity after a major interruption can be tough, especially in the deadline-heavy tax environment, Bieri points out. With DM software, you can keep multiple backup electronic copies in distributed locations. An added bonus: Authorized users can access documents off-site if necessary — for example, when they’re working from home.

Some corporate tax tech vendors offer document management modules for their suites (CorpTax is one example).

Stand-alone DM provider Agilysys provides an example of a tax-related implementation (in PDF form) here.

Etaxportal’s eTaxFileRoom is a Web-enabled document management system.

EdocSolutions offers a tool to manage sales tax resale and exemption certificates. ###