According to PricewaterhouseCoopers, finding a lost document will cost a company $122 on average. It is also estimated that 7.5% of all company documents are lost completely. Let’s assume your company works with 10,000 documents – an extremely light figure. That would mean, about 750 of those documents are doomed to be lost, ultimately costing your company around $91,500. Plus, if you had to recreate any lost documents, the time and supplies involved would make that number jump well over the $100,000 mark.
Or what if a customer calls in with questions about a specific invoice? With a paper based filing system, the employee taking the call would have to hang up, walk to the storage area, search for that specific invoice, walk back to their desk and return the call. What if they need a copy? Then that employee must walk over to the fax machine, send a copy, return to the storage area and refile the document. This process can take up to 20 minutes for one simple question.
Luckily, there are ways to streamline this process while saving major operational costs. Document management solutions make electronic documents easily searchable and readily available at a moment’s notice without leaving your desk. Document management can eliminate the chance of losing or misplacing files, while providing the capability to easily share and recreate documents in order to save your company thousands annually.
One three drawer filing cabinet can cost around $300, hold 9,000 pages of documents and require about 20 sq. ft. of office space. As retention periods are becoming longer and paper documents continue to influx daily, many businesses will then have to acquire additional filing cabinets and eventually purchase an offsite storage area. A relatively small storage space will cost about $150 per month, not to mention the utilities involved (electricity and lighting, etc.). PricewaterhouseCoopers reports that on average, a company spends $25,000 to fill one file cabinet and an additional $2,100 a year to maintain that cabinet. The fees quickly add up, but with document management solutions businesses can reduce and eventually eliminate costly storage and warehousing fees.
The costs associated with finding and retrieving documents may seem invisible, but they exist and are costing your company every day. A key benefit of using electronic document management is the ability to find and retrieve documents instantly, without leaving your desk. It has been estimated that searching for documents takes about 20% of an employee’s time. Let’s say you have 20 employees, all with access to search and retrieve documents. At 20%, the accumulative time spent finding documents is equal to 4 full-time employees. Consider you pay $40K in annual salaries per employee, that’s $160,000 every year in productivity lost by using a paper based filing system. Creating an electronic document management strategy will immediately eliminate errors with paper based filing as well as the time-consuming search for accurate data.
Statistics show that 3% of an organization’s documents are misfiled. Not only does this cause confusion within the office, but it also leads to poor customer service and miscommunication internally. With paper documents, an employee will spend more than double the time looking for a document than they spend reading it once it's found. On average, PWC reports that an employee spends about 15 minutes filing a document properly. A document management system can replace the role of filing cabinets and improve search and retreival efficiency with modules like KeyFree Indexing and Capture Workflow. With a paper based system, when an employee making $20 per hour spends one hour each day on filing, they are wasting over 250 hours and $5,000 annually. By going digital, this time could be spent on more useful tasks to bring in more money, rather than wasting it.
Document management can also save you money when working with suppliers by organizing and consolidating payment procedures. By creating document workflows, you can ensure approvals are made on invoices and payments are sent out timely. This in return can help your company apply for sales discounts in exchange for early payments. On 1% or 2% 10/Net 30 terms, the buyer will reduce the price by 1% or 2% when payments are received within 10 days of the due date. These savings can add up over the cost of a year with help from electronic filing. A $10,000 invoice offering a 2% 10/Net 30 discount will save you $200 alone – and that’s just one invoice. A streamlined capture and document workflow can help your organization reap savings in efficiency while better managing your business.
The cost and time-saving benefits of a document management solution can be realized almost immediately. It not only reduces the obvious charges of storage, photocopying and paper consumption but also labor costs involved in filing and retrieving documents. It’s time to consider business automation in order to take your organization to the next level – check out Square 9’s success stories and see for yourself just how much companies are saving with electronic document management.