Virtual Office Tools For A High-Margin Practice

Why do insurance consultants, financial advisors and other professionals need to stay abreast of new technology, keep an eye on practice management developments, and consider using virtual office tools and techniques?

Perhaps Craig Barrett, the CEO of Intel, answers this question when he says, “Never be content with the rules of the game as they are today. It is better if you change the game rather than having someone else change it for you.”

The financial services industry never has been as competitive as it is today; professionals need to do everything within their power to stay on top. It’s up to them whether they decide to make the rules or follow the rules their competitors make.

What is a virtual office? It is, among other things, a paperless office. When a single document among the thousands every firm maintains is needed, it can be found instantly through the indexing and search capabilities of a capable document management system.

Quick retrieval allows the advisor to remain on the call with his client and answer the client’s questions immediately. Hence, no follow-up calls or the phone tag that usually accompanies them is necessary. This is one source of greater efficiency.

Another example is the opening of a new client account. In a virtual firm, the advisor e-mails a request to his virtual assistant or virtual account administrator to open the new account.

The virtual work partner (VWP) completes the form for the client, either online if the form is made available there by the custodian, or using form-filling software that coordinates with the advisor’s client relationship management (CRM) software in such a way that form fields are completed automatically.

The VWP e-mails the form to the client who prints it out, signs it and returns it by U.S. mail to the VWP. She or he then e-mails to the advisor for his archive a copy of the signed document in the form of an Adobe Acrobat PDF (Portable Document Format) file, while mailing the original to the custodian.

Finally, consider the process of bill paying. The virtual professional scans and e-mails copies of his payables to his virtual bookkeeper who pays the bills using the online banking system of the professional’s banking institution, and then enters the transactions into the professional’s accounting software. She or he finally e-mails to the professional the updated accounting file, which he imports to his master copy of the accounting software so he has current information at his fingertips.

The virtual financial services firm thus relies heavily on virtual processes, i.e., paperless office systems, outsourcing, mobile technology and application service providers (ASPs), giving it a profit margin (before owner’s compensation and benefits) of 60% or higher.

What is the professional’s motivation to pursue virtual office tools and techniques besides greater profitability? The bottom line isn’t profits, per se, but the greater options that profits give the professional for creating the lifestyle he wants. Most professionals enjoy their work but don’t necessarily want to devote their lives to it to the exclusion of family, friends, community and other pursuits.

To embark on the transition to the virtual office, one must be aware of the technologies that facilitate this business model. As outlined in our definition, they are paperless office systems, outsourcing of administrative or professional tasks, and using ASPs. Let’s review each of these components.

The Paperless Office

Implementing a paperless office requires a selection of scanners, scanning software and indexing/filing systems. Going paperless means eliminating file cabinets and saving on rental costs associated with the storage of paper.

These obviously represent cost savings but aren’t, in and of themselves, the primary reason to effect a paperless office. That reason is to put information at one’s fingertips.

What, then, should one look for in the tools required to “go paperless?” Scanners are the first item. The small office needs, at a minimum, a scanner that will move paper rapidly through a straight paper path (minimizing paper jams); scan both sides of a document in one pass; allow for automatic document feeding of 25 or more pages at a time; and scan both color and black and white images at high resolution.

Scanning software reads and stores the image of a document fed into the scanner. Indexing refers to a software’s ability to convert scanned images automatically to text such that an index is created “behind the scenes” with which to search electronically for needed documents based upon words within an image. This is a highly desirable characteristic to look for in a scanning software package.

Outsourcing to VWPs

The advisor can maintain ongoing consistency and accuracy of accounting data and report information while also minimizing his costs by outsourcing. “Service bureaus” can run systems for the advisor.

These entities train their staffs to be expert in the operation of the accounting software. And they stand ready to replace their own departing staff with equally well-trained replacements when necessary. Furthermore, a service bureau usually can perform the advisor’s accounting function at 50% or less of the cost to the advisor of maintaining an employee relationship for this purpose.

By outsourcing tasks that no one in your employ either can do expertly or cares to do, you and your staff are left with the best work–the work that will feed your passion and help you get out of bed in the morning.