The Pros & Cons of a Paperless Business
Years ago, businesses were built on paper.
Paper, paper, paper. Whether you run a restaurant, own a hotel or manage an apartment, paper is probably a huge part of your life. It’s still a fundamental tool of business management today, but it’s increasingly becoming less and less necessary. If you’re thinking of switching to digital, the time is now.
Guess what—in today’s world, paper is becoming increasingly obsolete. From ordering, to planning, contracts to POS, digital options are everywhere. Here’s what you need to know to step into the future and start running a paperless business.
“We’ve gone digital, man, and the frontier lies before, not behind us.” Unless you’ve been living in a cave (and that cramped file room of floor-to-ceiling cabinets probably feels like one), you’re reading this and thinking it’s probably time to ditch the paper pile. But the question is always how do you become a paperless business? Taking the plunge seems risky for many business owners. After all, going paperless means embracing technology and yes, that’s a daunting prospect in any industry.
The truth is many management companies, especially apartment, hotel and hospitality management groups, still rely heavily on paper.
But we’re living in a time of major transition, one in which the old system of record keeping used for thousands of years (think clay tablets, papyrus, and bamboo), is finally giving way to more modern solutions.
Someday, your business will be forced to switch to paperless to keep up with vendors, clients, and customers. The question is of course, when and how? In this case, the future is now, so the sooner the better. In fact, it’s possible to go nearly 100% paperless across the board.
The more realistic answer is to adopt the change with a measured approach. Examine the way your business currently manages and stores paper records. How much of your business is already digital and what will the scope of the switch to paperless business look like?
To Switch or Not to Switch: How to Go Paperless
Fortunately, there’s flexibility in the timeline to go paperless. While you could switch today, there is still a lot of practicality to using paper. Receipts for credit card transactions and employee records are just a few areas where paper works fine. For now.
Of course, as new technologies become the norm, expectations shift as well. Many customers prefer digital receipts and the convenience of easy checkout. Vendors may push you toward online payments, EFT, and digital invoices. As time marches on, so will technology. It will become increasingly necessary to turn your business into a paperless company.
There are plenty of options available to those wanting to modernize. For larger management companies or those with a high volume of records (like assisted living facilities), consider hiring a firm to take on the record conversion for you. Depending upon your budget, data management companies will even help you organize and store data, providing maintenance services once the conversion has been successfully completed.
Smaller businesses, such as restaurants may want to take the process slow and save money by with a DIY approach. Simply establishing systems and using digital data management as you move forward will help. Scan in and convert records as you move along. Manually scanning documents is clunkier than hiring a data management service, but progress is still progress.
5 Benefits of Doing Paperless Business
Still not convinced paperless is the right step for your business? There are several areas to explore as you weigh the pros and cons of taking your business into the 21st Century (which is NOW).
1. Financial Benefits
Bank accounts are easy to set up for EFT (electronic fund transfers) and withdrawals. This simplifies the payment process for customers, tenants, and clients. There are no bounced checks or fees to contend with. Money goes into your account instantly and you receive payment confirmation.
Paperless billing also benefits you on the A/P side. You’ll avoid late-fees by setting up automatic withdrawals, recurring payments and opting for the convenience of digital statements. Payroll is easily set up as a paperless service as well. No more fussing with check stubs and paperwork. If you spend hours paying your business bills each month, you’ll be amazed at how easy automatic billing is. Better yet, come tax time, you’ll have a clear record of your A/P so there’s no searching for signatures and receipts.
2. Time & Space Savings
We all know time is money, yet many of us still wrestle with technology because we don’t want to sit down and learn. This is a pennywise and pound-foolish mentality. You may save time now but eventually, you’ll be left behind. If you don’t feel comfortable with going digital, it’s a worthy investment to take classes or hire a consultant to train you.
Going paperless will save you time in the long run by eliminating lost and misplaced documents. You’ll save on manpower too—employees won’t need to spend their time processing, filing and organizing paperwork. It’s estimated that businesses save 40 man-hours each week by switching to digital.
One of the best aspects of digital data is the searchability. Compiled data is easily searchable, and information is at your fingertips. All your documents can be digitized and with cloud storage, they’re easy to access wherever you are. Many database systems offer checks and balances as well. For example, you can’t file a document if a field is left blank. This eliminates mistakes, redundancies, and miscommunications. You’ll see where a file has been and where it’s headed.
Finally, look at your filing cabinet and the overflowing boxes in storage. Imagine storing all that information in a space the size of your fingernail. Paper takes up a lot of room and with digital and cloud storage, there’s no reason to waste the space.
3. Cost Effective
Take a look at your supply budget. How much do you spend on paper, ink, postage and yes, even paper? This adds up quickly. No matter what type of business you’re running, chances are you’re looking for easy ways to save.
Digital storage and converting files is an investment now, but in the long run, you’ll save money, as well as the aforementioned time and space. Cancel your storage unit rental. Stop paying for maintenance on your printer and copier. Many small businesses don’t need to spend much on a streamlined digital management system. You may see returns on your investment in as little as six months!
4. Never Lose Files
When it comes to going paperless, many businesses fear losing files. We’ve all faced the terror of tech problems at one point or another. Many business owners fear a digital meltdown, which is why paper feels so safe: it’s tangible. You can always refer to paper.
Yet, with cloud storage, you have easy recovery even if your systems all go down. Work anywhere and access any piece of data you need for your business. You can still create a digital trail too. Most entities, including the IRS, allow for digital filing and reporting. With digital files, it’s actually easier to create a “paper trail” or historic record.
5. Environmentally Friendly
Going paperless is also good for the planet. Paper accounts for 25 % of landfill waste. Cutting this waste by 10% would eliminate 1.6 million tons of greenhouse gas production—the equivalent of taking 280,000 cars off the road! Paper processing and even recycling requires energy and creates waste.
The move to becoming a paperless business has peripheral benefits too. Going paperless reduces the waste from ink cartridges, energy used by printers and other paper-involved machines. Think of shredding and document destruction. Imagine the energy required to overnight a single document across state lines for a signature! Going paperless cuts out all that extra waste.
5 Drawbacks to Going Paperless
Now, there also are a few drawbacks to taking your business paperless. These considerations are important, especially if you’re planning on making a quick switch to digital. Before you go completely paperless, here are a few items to examine.
1. Protection from System Failure
If you face a system failure and your documents aren’t backed up with an off-site, cloud backup, you could face a huge loss. For small businesses who go paperless without a strong plan, a system crash is a nightmare and failing to back up is a critical mistake.
Sensitive and personal information is vulnerable to hacking and theft, especially when the information is digital. If you house sensitive customer, client or proprietary information, protect your data with encryption and restricted access. 56% of organizations in the United States encrypt their data to protect their employees’ personal information.
3. Revamping Processes
Every business owner knows, change is tough to implement, especially among employees. Major changes to operating procedures are overwhelming. Getting your entire team on board is a big undertaking and you may meet with resistance. Provide plenty of training and time for your staff to learn the new ropes.
4. Upfront Costs
Going paperless may save you money in the long run, but in the short term, it’s expensive. Online invoicing and payment services often entail an extra expense. Robust computer equipment, scanners and subscriptions to cloud backup services will require an investment. Training staff to use the new systems is another expense to remember as well. It’s important to plan for extra costs, especially if you’re watching your bottom line.
5. Health Reasons
While technology eases our stress and strain in many ways, hours at a computer lead to health concerns. Carpal tunnel syndrome, as well as eye, back, and neck strain, are all unwanted effects of working behind a screen. Obviously, spending hours hunched over stacks of receipts and hauling file boxes causes strain as well. Look for ergonomic equipment to counteract the effects of too much screen time.
Ready to Become a Paperless Business?
As you see, there are a lot of benefits to going paperless and converting your company to a paperless system. Even with the drawbacks, time continues to march forward and our world is using less and less paper. When you switch, your business will save time and valuable office space. Going paperless is environmentally friendly and ultimately, ditching paper saves you money.
Of course, going completely paperless immediately isn’t right for all small businesses. Tackle the process in baby steps. Keep in mind the switch to more technology is inevitable, but it’s perfectly fine to go at your own pace. Slowly make gains as you become a paperless business and step into the future.