Why is paper the most expensive carrier? How can you avoid using it?
When digitizing company documentation, the most common motivation comes from saving costs, followed by process automation. Other reasons are usually not so significant. Client’s first idea for this kind of project is to start with scanning the existing archive of paper documents.
However, digitization can be the most valuable in situations when you can completely avoid paper documents. Paper and manipulation with it are usually the most expensive options of processing and storing data.
Digitize accounting processes from the start point
A great example of such process can be a manipulation with accounts payable. Usually, income invoices are scanned at the first place and then somehow processed. Only after doing this for some time, clients move to requiring electronic documents from their suppliers. But still, these e-docs tend to be unstructured documents. Certainly, even this approach of processing accounts payable can save significant time and money, because the most expensive tasks are hidden in detail.
Let’s look at the transparent comparison between different formats of data storage and processing. The chart shows simplified process of AP management split to all steps. You can clearly see in which steps a client can save money and time after they switch from a paper-based process to a PDF invoice received via email. If clients upgrade to receiving documents in a structured form like iDoc or EDI, they will get even further in process’ effectivity. See the chart for more details.
The chart compares different formats of invoices and their management
|Paper invoice||Electronic invoice
|Receiving paper invoice||Receiving electronic invoice||Receiving structured electronic invoice|
|Sorting, separating, preparing for scanning||NA||NA|
|Extracting data||Extracting data||NA|
|Processing invoice for accountancy||Processing invoice for accountancy||Processing invoice for accountancy|
|Packing document lists together again||NA||NA|
Invoice management is usually the first process where a company starts with digitization since it can be easily implemented. It’s also the first area that can be started at the “zero” point, which means agreeing with suppliers to send invoices electronically without involving paper at all.
Specific digitization of tax forms
We can find many more other company’s processes that can be fully digitized. A good example is an employment agenda, e.g. request for annual settlement of taxes.
In most cases, an employee fills in paper request form, HR manager makes a supervision, scans the paper, and rewrites relevant information to payroll software for processing. It seems clear only from this short description that this digitization will not provide expected results and the impact will be minimal. However, if you start with digitization at the beginning and replace paper form with e-form, you will block using paper from the scratch and the benefits of this process will significantly grow.
Benefits of digitizing forms for annual settlement of taxes:
- Increased comfort for all involved parties.
- Decreased human errors in the form since e-forms can be interactive with relevant checks and context help.
- No need to check possible mistakes since any errors are removed during the fill-in process.
- Increased effectivity of annual settlements of tax processing. Since the data are provided in a structured form, it can be automatically transferred to payroll software. There’s no need for manual rewrite.
- Saved direct costs of paper, paper forms distribution to employees followed by collecting forms.
Our second chart shows differences in processing paper and electronic forms of annual settlement of taxes.
The chart compares different formats of requests for processing annual settlement of taxes
Paper tax settlement processing
Electronic tax settlement processing
|Printing forms + distribution to colleagues||NA|
|Employee fills in paper forms||Employee fills in e-forms|
|HR assistance with filling forms, additional explanation of rows…||NA|
|Collecting filled forms||NA|
|Check of forms by payroll department||NA|
|Manual rewrite of data from forms to payroll software||NA|
|Processing annual settlement of taxes in payroll software||Processing annual settlement of taxes in payroll software|
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Case study of digitizing requests for processing annual settlements of taxes shows huge resource savings
This year’s pilot project of digitization of requests for annual settlements of taxes in our outsourcing partner for chosen clients shows that it can be a significantly valuable way of saving money and time for the partner and their clients.
In spring of 2021, they generated more than 21 000 annual settlements and attached documents in TULIP. The average number of pages is 5, so approximately, they saved more than 75 000 lists of paper. That’s 6 000 kilograms of paper. Only for this provider, it saves hundreds of euro for paper itself. Not mentioning hours of work for partner’s and client’s employees.
annual settlements and attached documents in TULIP
saved lists of paper
kilograms of paper
Digitizing this process is a great way of helping your HR department and saving their time, so they don’t have to look for employees at their offices to sign documents. In this pandemic time, it’s almost impossible.
You will stop losing paper documents and devalue them. You will save money, time and even natural resources.
The same advantages can be applied to invoice digitization and more common processes, if you stop using paper at all from the very beginning of a certain process. Don’t be afraid to do so. Case studies show that there’s nothing better you can do.