Deloitte in the News
Coronavirus entrapped business in quarantine
Electronic document management could be the workaround
As COVID-19 has forced the country to quarantine, business is experiencing difficulties with the signing of documents and suffering from delays in payments or breaches of contractual terms. Despite the officially declared coronavirus pandemic, employees have to come to the office under the necessity of printing out, signing, and delivering paper documents.
The quarantine has brought to the fore the issue of how to ensure effective exchange of information and official documents. However, these threats and restrictions may be regarded as new opportunities – the right time to increase the use of automation and transit to electronic document management (the EDM).
Once promptly and properly implemented, the EDM will free resources to be directed on giving more care to the employees and mitigate the risks of slowing the company's critical processes down.
The EDM system allows a prompt, efficient, and safe exchange of documents and saves the employees from unnecessary contacts, in addition to other significant benefits:
- Sustainability. This is one of the key components of corporate social responsibility adopted by many trend-setting companies.
- Digitalization of processes. This allows the company to manage its processes more efficiently, monitor all activities, and reduce the time spent by the employees on routine tasks.
- Speed and convenience. Using the system, employees may promptly receive, approve, and sign documents, without physically going to the office.
Over a year ago, Deloitte decided to implement the electronic document management to ensure the exchange of documents with counterparties and employees. Today, we use an EDM platform to share source documentation with suppliers; currently, we are making effort to make this functionality available to clients and employees.
To properly implement the EDM system, we, in the first place, focused on such aspects as data exchange security, documentation flow automation; prompt handling of documents; cost saving due to better-streamlined logistics, reduced use of paper and consumables for copy machines, and archiving of documents; business process optimization, and simplification of keeping archived documents. After that, the EDM system was integrated with accounting systems and ERP systems to ensure the internal document sharing.
No doubts arise as to the usefulness of EDM; however, there exist certain legislative collisions that restrict to some extent the full-fledged use of the system. The reality faced us with the following challenges:
- Maintaining electronic HR records
- Filing documents during audits by the state regulatory body
- The date of income / expenses recognition period and VAT input / tax liabilities recognition depending on the date on which the electronic signature was applied
- Documents that regulate the legal status of EDM in the company
- No roaming between different EDM platforms
- Documentation of the transit to EDM with counterparties
Our experience shows that companies providing EDM services and government agencies have to make a series of changes to ensure successful operation of EDM in Ukraine. Specifically, they should :
- Lay the groundwork for the prompt implementation of roaming between the EDM service providers' systems
- Legitimize EU, US, and other global electronic signature standards at the national level to facilitate the exchange of documents with international partners
- Introduce legislative changes regarding keeping HR e-records and income / expenses recognition period, based on source e-documents
- Amend the Tax Code of Ukraine as regards determining the date of accrual of tax liabilities at registration of the source e-document and the period of inclusion in VAT input
- Provide a clarification and instructions to tax experts on how to use electronic documents during their audits
- Simplify the online procedure for issuing EDS remotely 24/7 without the recipient being physically present
- Enhance the procedure for maintaining electronic archives, including the one for long-term storage documents
EDM is an effective tool designed to simplify the process of doing business remotely and to save your employees from traveling to the office during quarantine. Deloitte is looking forward to concrete steps by the state to promote this functionality.
The author would like to thank Valentina Berezkina, Viktoria Melnychuk, Olena Sribianyk, and Kyrylo Lobach for their contribution to the launch of the EDM system and assistance in writing this article.