The possibility of an economic downturn during the upcoming year is unsettling, and its potential impact is difficult to predict. But reducing operating expenses (OPEX), which include everything your company spends to keep your business up and running, is sure to have a positive impact on your company’s financial health. Switching from paper-based processes and partial solutions like Google Drive or SharePoint to a digital document management system (DMS), reduces OPEX in every department where the solution is in place.
Table of Contents
1. The impact of going paperless on business expenses
2. How to contain business process costs through automation
2.1 Maximize the use of staff time
2.2 Monitor costs in your accounts payable department
2.3 Keep an eye on expenses
2.4 Gain productivity from investing in technology for your remote workforce
3. The long-term benefits of adopting a DMS
OPEX include payroll, rent, taxes, insurance, travel and utilities as well as sales commissions and asset depreciation. Cost of goods sold (COGS), the cash outlay for making, packaging and selling your product is an operating expense that is calculated separately. Generally, service businesses have little or no COGS. This blog post outlines the ways that digital document management and decreasing expenses go hand in hand.
The impact of going paperless on business expenses
With a paperless office solution, everything from correspondence and emails to invoices and contracts is stored in digital format. A current copy of these electronic documents is archived in the system’s centralized repository, where it’s available to all authorized users at any time.
A document management system eliminates the need to print and file paper documents. And in today’s remote working environment – digital files can be shared securely and instantly –- that’s what we all need –- not printed copies.
You’ll no longer pay to store and maintain hard copies of your business records on or off-site. In addition, employees spend less time filing, retrieving and sharing documents. Tasks that took minutes or hours with a manual, paper-based system take seconds with cost-effective document management. Your staff can also stop chasing down missing information or trying to read indecipherable handwriting by using web forms. On the flip side, employees, customers and vendors no longer waste time filling out paper forms.
How to contain business process costs through automation
When it comes to obtaining the benefits of the digital office, replacing a module from your ERP, accounting or HR software or file shares, like Google Drive, with a purpose-built DMS yields many of the same benefits as eliminating paper processes.
Document management modules from an ERP, accounting, HR or other specialized business software don’t meet the needs of every department in your company. They’re designed for one aspect of your business only. These options only provide one part of a document management solution, which is usually just storage and retrieval.
Numerous organizations use file-sharing software for document storage and collaboration since their employees work on projects that are too large to send via email and require revision from different team members. Google Drive, Dropbox and other similar services support teamwork and are free. However, having disorganized, siloed documents that aren’t searchable is still a major issue.
Document management software offers digital storage and file management and enables indexing of vital information, making it easy to find and access. It also incorporates digital workflow management which creates efficient, automated processes that enable managers to monitor business processes in real time for more informed decision making.
Maximize use of staff time and increase efficiency
Automated workflows streamline business processes in accounting, sales, customer services, HR and other departments. Utilizing an optimized workflow management solution leads to faster payment collection, lower purchasing costs, higher customer satisfaction and increased employee retention.
Any workflow consists of both user-triggered and automated tasks. For instance, in business process automation, a staff member can be prompted to determine the status of a specific document, like approving or rejecting an invoice. Afterward, the system performs unaccompanied activities, like sending the approved invoice for payment or declining the invoice and forwarding it to a designated person for further action.
Office automation saves time by eliminating manual work, reducing errors and taking over some routine functions so that human intervention is no longer necessary. So, the same number of employees can achieve more and use their time to increase business productivity.
Monitor costs in your accounts payable department
Digitalization speeds up payments by reducing the time between receiving, approving, and paying an invoice. With a document management system, payment deadlines are automatically tracked, and email reminders are sent. When an approver is absent the system reroutes invoices to a backup person.
Cost-savings include taking advantage of early payment discounts, avoiding late payment fees, enhancing vendor relationships to improve purchasing terms and conditions, and having an accurate overview of monthly spending and outstanding payables. With this overview, you can see if expenses are rising with a particular vendor and ask other vendors to provide competing quotes to see who can provide the goods or services at the lowest rate.
Keep an eye on travel expenses
The use of spreadsheets to manage expense reports and receipts can result in your accounting staff wasting significant time on data entry and scanning. Additionally, this can prevent your organization from tracking employee spending to identify potential opportunities for saving.
Without an overall picture of expenditures by category, costs in each department and person, you won't be able to control expenses. So, automating the expense reporting process is crucial to reducing expenses. This approach can save valuable time and money while providing vital insights to make informed budget estimates.
You can turn expense reporting data into searchable information to analyze and develop cost-saving standards. For example, keep track of spending by generating departmental reports every month, enabling managers or auditors to examine deviations from the company's guidelines. You can also respond effectively to the growing number of regulatory standards associated with expense reimbursements.
Managers can access a consolidated view of their department’s spending. With this information, it’s easier to take a closer look at a department’s travel budget and evaluate which meetings should take place in person and which of them can be done virtually. Virtual meeting rooms are especially beneficial for businesses that might not have the budget to host clients on-site. Developing real-time tracking mechanisms ensures compliance with company policies, and the system can decline non-conforming expense reports automatically.
Gain productivity from investing in technology for your remote workforce
According to a recent Pew Research Center survey, about a third (35%) of workers with jobs that can be done remotely are working from home (WFH) all of the time and 41% of them are working a hybrid schedule. Increased productivity is often achieved due to a reduction in distractions and more autonomy, but that’s only possible when employees have the right digital tools.
The prevalence of WFH has created new challenges when it comes to accessing documents. Document management better connects employees who work from home by offering a single, shared source of truth and an easy-to-use collaborative platform. Version control enables them to work on the same document while avoiding the confusion caused by the creation of multiple versions.
Enabling version control makes a document inaccessible for editing by other users when an authorized user checks it out. When the document is checked back in, it is automatically assigned a new version number. Users can be sure they are always working with the most current version. Document management can also enable a group of employees to work on Microsoft Word documents collectively online.
Automated workflow routes and shares documents across multiple departments and systems in seconds. And permissioned access and digital data security help to maintain compliance and reduce risk.
The long-term value of document management
Factoring in the reduction of OPEX is has an important role in determining your return on investment (ROI) for implementing a DMS. A company that relies on paper processes will immediately notice savings connected with printing, copying, scanning and archiving. Both these companies and those that use disconnected file shares can measure increases in efficiency by, for example, comparing the time it used to take to process an invoice, complete an employee’s performance review, or get a change order to the factory floor to the time saved by using a DMS.
Companies that have a DMS experience intangible benefits too. There is an increase in their ability to adjust to changes in economic conditions because automated processes can be updated easily to meet new demands. A DMS also provides user permissions, audit trails, and encryption to ensure that only authorized employees can access confidential information. This safeguards employee and customer data, and helps your company avoid regulatory fines and the potential cost of data breaches. Most document management customers experience ROI in 3 to 6 months. The facts are clear -- your company should be one of them.
Editor's note: This post has been updated for accuracy and new content has been added.