Paperwork is costing your business more than you think
An example of the cost of paperwork.
Read time: 3 minutes
How much does your business spend dealing with paperwork on an annual basis? How much could be saved if you were to digitize paper documents?
Let's go back to the paperwork scenario. To go about creating a cost estimate, you would likely start by tallying the obvious expenses. Postage and courier fees, paper and ink, etc. These common hard costs can certainly add up, but they also don't come close to telling the full story.
The true cost of paperwork
The high cost of paperwork stems from the inefficiency and inconsistency that it introduces into business processes. Dealing with paper is slow. Paperwork gets lost. Processing paper manually leaves a lot of room for human error. Paperwork is inefficient.
If the time spent dealing with paperwork could by replaced by document scanning, employees' productivity would improve greatly. there aren't many businesses that have a lot of idle hands sitting around, which leaves three possibilities:
Employees must work longer hours.
A new hire must be made to pick up the slack.
Something just doesn't get done.
This is not a trivial amount of time or money either. Chances are, the costs associated with wasted productivity far exceed whatever is being spent on the hard costs mentioned above. For many organizations, the amount of money unwittingly spent on wasteful processes would be truly shocking.
Labor costs jump significantly without document scanning
So what are the direct labor costs of all that transaction processing? Let's consider a hypothetical company to put it in context—a regional chain of bicycle shops in Seattle.
Our example business has four locations and about 40 full-time employees—two of whom are focused on finance. According to the Bureau of Labor Statistics, the mean hourly wage for a business and financial operations worker is $36.98. Assuming 40-hour-average workweeks for 50 weeks each year, the labor cost this company incurs paying its finance employees to process transactions would exceed $160,000 annually. This is an admittedly simplistic way of looking at the problem. Not everything that goes into processing transactions is inherently wasteful, and there's no way to completely eliminate the need for it. Even so, the opportunity costs are very real. Finance employees are high-skill, high-pay knowledge workers, so if they're spending hours filling out paperwork, the expense is felt in both dollars and mis-allocated brain power.
This estimate doesn't even consider the range of non-labor expenses that can arise from paper-based financial processes. In addition to hard costs associated with creating, sending and storing physical documents, having less reliable records increases the risk that businesses will have problems with compliance, information security, taxes or general liability.
Digitize paper documents
If we accept that paper consumption is a very expensive wrench in the productivity of most businesses, what can we do to reduce its impact or remove it altogether? Digitization can go a long way towards achieving that goal. Some tedious manual processes can be streamlined or eliminated completely with workflow automation. With the right technology and the right partner, reducing wasteful processes can have an immediate impact on the efficiency of your business as well as your bottom line.
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