Putting A Price Tag On Your Paper
So you’re considering transitioning to a paperless office, but are a little wary about the huge investment it takes to start the process. The task may seem daunting, but do you know what the costs associated with paper in your office currently are? They add up quickly, sometimes without you even realizing it and can be mitigated or even eliminated by going paperless.
Have you ever wondered what the cost of the use of paper in a business setting is? After reading this, you will see why businesses are choosing to go paperless.
Here are some of the costs that accumulate due to paper:
Cost of Storage:
A typical four-drawer filing cabinet takes up about six square feet of office space. Additionally, it costs a company $25,000 to fill a filing cabinet, on average, and about $2,100 per year to maintain it. Odds are your company has more than one filing cabinet. According to an article by Que Publishing, 50-75 percent of office space is dedicated to filing and document storage, and 45 percent of the documents stored contain duplicate information, and 80 percent are never accessed after it is filed.
Cost of Office Supplies:
According to ConsumerReports.org, the cheapest ink is about $13 per ounce, and the most expensive at about $75 per ounce. Toner can cost anywhere between $75 and $200. Another hidden office product cost that you may not realize is postage stamps. The price of a stamp is up to 49 cents. Any piece of mail that weighs more than one ounce is charged 22 cents per additional ounce (USPS) on top of the price of the stamp. What about other office supplies, including staplers and staples, paper clips, tape, manila folders, rubber bands, binders, correction fluid and anything else you may find in your office drawers? The average cost of office supplies per employee per year, according to LAC Group, can range from $200 to more than $1000.
Cost of Labor:
According to research done by AccountingWEB, the average staff member or accountant makes 60 trips to a photocopier per week, and spends 15 hours per month printing documents. This adds up for companies, especially when you factor in that the average hourly rate of a working adult in the U.S. is around $25 per hour. Also bear in mind the fact that executives spend 150 hours per year looking for misplaced documents.
Cost of Increased Payment Times:
How long does it take your financial departments to process payments? According to research by the Aberdeen Group, companies without a document management solution averaged 14.4 days to process an invoice. Some companies took as long as 34.4 days. You may be paying excess fees due to late payments that continue to accrue interest. You may also be missing out on early payment discounts by not knowing the optimal time to pay.
Now that we've seen where your business may be losing money, it's time to consider how going paperless can save you money. One of the tools to get you on the right track toward a paperless office is a document management solution.
We've complied a list of questions to help you start identifying the costs associated with your current, paper-based processes in order for you to see the savings and return potential that document management can provide.
- How many hours does your organization currently spend filing documents?
- How many people are involved?
- Are these people centralized or dispersed throughout your organization?
- How much time is required to locate documents?
- What is the potential impact or cost of a lost document in terms of revenue, liability, or legal exposure?
- What is the annual cost of postage, paper, and labor for mailing documents?
- What is the annual cost of printer supplies, maintenance, paper, and labor to print your reports?
- What is the annual cost of printer supplies, maintenance, paper, and labor to make duplicate copies of your documents for your current processes?
- How do multiple copies impact the integrity of original documents?
- Is your organization missing payment discounts?
- How much time is spent taking data from one report and entering it into a spreadsheet for analysis or management reporting?
- What would happen if a fire or other disaster occurred?
- How much square footage is used to store infrequently accessed paper?
- Do you have off‐site backup of paper files? What does this cost?
- Does off‐site backup require you to have 2 copies of each piece of paper?
- What is the labor cost of locating missing documents?
- What is the potential exposure of missing documents from an audit?
The cost savings for your business is substantial, especially when factoring in the gains in efficiency, as well as the reallocation of time previously spent by employees doing tedious manual data entry, searching for lost documents and scanning or copying paperwork.
We encourage you to take the time to examine where your company could save money by answering the above questions and calculating your potential return associated with the implementation of a document management solution.
This article was taken from two blogs, Putting a price tag on your paper and Your System, Your Return:The ROI of Document Management, published by Metaviewer.