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Paperwork Is Costing Your Business a Lot of Money

WHERK blog: Paper-Based Model is Costing Your Business Money

Paperwork Is Costing Your Business a Lot of Money

Paperwork has long been a mainstay of the business world. Documents, reports, contracts, bills, invoices, protocols. It’s a never-ending list, and it all eventually turns into skyscraping stacks of files. Those files cost businesses a surprisingly steep amount of time and money to produce, store and keep track of. Businesses and their executives are becoming increasingly aware of these costs, and many are setting their sights on paperless operations. In fact, according to Device Magic, 80 percent of small-to-midsize businesses (SMBs) want to cut paper processes out of their workflows. Because they have fewer employees and less large bureaucratic structures in place, small businesses are in a unique position to embrace a paperless business model. Here are a few reasons why the paper-based processes are costing your business more than you know.

Billing and Invoicing 

In the traditional paper-based model, completed jobs are sent to the billing department. Then, office personnel produces invoices that are sent out to clients and customers. This may sound relatively harmless, but those two extra steps can take several weeks or longer. That means it takes your business several weeks longer than it should get paid for every single job. This can be especially frustrating for startup small businesses trying to establish steady cash flow to offset initial costs. Small business software is one of the single best solutions to manual billing and invoicing and the delayed payments it results in.

Storage

Most business owners and their employees think of onsite storage as essentially free. But that logic fails to account for the cost of maintaining the storage infrastructure. It also overlooks the hours your employees spend storing paperwork. According to PricewaterhouseCooper, companies spend an average of $25,000 a year filling a single file cabinet. In addition, they shell out an extra $2,100 maintaining it. That’s over $27,000 on each individual file cabinet, every single year. Just because those costs are largely invisible—hard-to-track labor hours, maintenance and repairs, etc.—doesn’t mean they aren’t negatively affecting your company’s profit margins. Small businesses that go digital through software solutions never have to worry about these slow-drip expenses again. 

Paper Work Orders

Here’s where the consequences of staying with paper-based processes become really severe. Paperwork orders go through a long and winding journey. They’re first produced and printed out in the office. The team members—plumbers, HVAC pros, technicians, etc.—must come to the office to pick up their work orders. Once the work order is complete, it’s finally returned to the office. This is an incredibly inefficient operational method for any company. Work orders are essentially a small business’s conveyor belt. All work must move along them, and productivity is completely controlled by how fast the conveyor belt moves. With paperwork orders, that conveyor belt is extremely sluggish. This means extra trips to the office, more driving, and of course, the ongoing chance that a work order is misplaced or damaged. 

Digital work orders, on the other hand, create operational seamlessness. These jobs will go from the office to a mobile app on your team members’ smartphones, and then back again when the work order is complete. Small businesses that embrace the paperless model cut down substantially on all the logistical hurdles that come with transporting paper from Point A to B to C every day. 

Want to learn the best way to schedule, route, and track employees? Read more here.

Accessibility Issues 

Executives spend on average six weeks per year looking for lost documents (executives!). Meanwhile, companies misfile up to 20 percent of their documents.

Paper-based companies spend a shocking amount of time looking for lost or misplaced documents. According to research firm Gartner, it can take up to 16 hours to retrieve a lost document and then even more time to recreate it. Resulting in a huge financial sinkhole. But the troubling statistics don’t stop there. A 2013 report by Esselte found that executives spend on average six weeks per year looking for lost documents (executives!). Meanwhile, companies misfile up to 20 percent of their documents.

That means one-fifth of every business document (paperwork) is susceptible to the costly and time-consuming needle-in-a-haystack search outlined above. The bottom line is that when companies primarily do business in paper, they’re going to misplace, misfile, and lose documents. And when companies lose track of their documents, it costs them money. 

Losing Younger Clientele

Younger generations are amassing more and more buying power. As of 2017, millennials had the strongest spending power of any age group. The oldest members of Generation Z, meanwhile, are just reaching adulthood. Soon they’ll control their own major share of domestic spending. Clearly, small businesses want to be catering to these two age demographics. One of the most effective ways to do that is by adopting the latest technology. Americans in their twenties and thirties don’t want to be bogged down by paperwork when working with local service businesses. Small business owners should be striving to impress them by providing a smooth digital experience that prioritizes fluidity and ease-of-use. 

The internal decisions you make as a small business owner have a major impact on the external appearance of your firm. They influence the way every potential customer sees you. As the marketplace increasingly skews to these two younger generations, digital fluency and a paperless experience are going to become more and more important aspects of a successful, attractive small business. 

Conclusion

Small business owners value their freedom and independence. In addition, because small businesses are, well, small—often just one- or two-dozen employees—they have a nimbleness that larger corporations lack. As a small business owner, you can make adjustments faster than lumbering corporations that employ thousands. This agility and adaptability are why small businesses are in a fantastic position to analyze and respond to important trends. The trend here, of course, is moving on from the unnecessary burdens of paper-based processes. 

Small service-oriented businesses should explore new service business software WHERK. This software platform was built exclusively for you, the small business owner and their team. WHERK features a powerful suite of functionalities that ramp up productivity and produce insights that help entrepreneurs make smarter, more financially sound business decisions. Features include personnel tracking, custom reporting with data visualizations, automatic invoicing, a built-in customer manager, and mobile compatibility for your on-the-go workforce. Visit the WHERK website to learn more.