Saving Your Bottom Line

The concept “paperless office” was coined as early as 1975 in a Business Week article that predicted the future office environment, taking into consideration the advances that were being made in computer technology. We have come a long way since that article was published, amazingly so, but a paperless office has still not been realized – not by a long shot! But what is a paperless office exactly, and why is the concept still considered an abstract reality?

TEXT VANESSA VROLIJK, OWNER CURAÇAO INFORMATION MANAGEMENT

Paperless office may have started out as a literal concept, no paper anywhere; however, it has come to mean different things. Nowadays, the term, “paperless office” refers mainly to making primary and secondary business processes leaner, as well as more efficient, by either eliminating or reducing paper. What this actually means is that by eliminating the medium (information carrier), which is paper, and replacing it with a digital one, such as a scan or electronic document or even data in a system, you can actually make your process more efficient or “leaner.” For example, the simple act of making copies of a document or file for everyone who needs it, or making sure that the original hardcopies don’t get lost or – even worse yet – lose their integrity during the process, costs an enormous amount of time and money on a yearly basis.

When considering going paperless, the questions is always: How much will it cost me and where/how do I start? It’s quite difficult to put a specific price tag on going paperless, however, projects such as these are always scalable. Just like any other project, it is extremely important to define exactly what issues you would like to tackle. In other words, you have complete control because you decide. When deciding how to start, the first place to look to is to your team. What do they think are the bottlenecks? Ask your Accounting department, Legal, Compliance, a Records and/or Document Manager or Archivist. They are usually your first stop for identifying key issues and describing them. The next step is to get professional advice from experts in this field. Experts in this niche specialty are usually able to help you define, prioritize and execute your projects.

Digitalization
There are certain processes that are universal to all organizations, big or small, that are inefficient, sometimes convoluted to the extreme, and are basically a general hassle to get a grip on. Accounts payable is one of these processes, where the characteristics are always the same. Generally, there is usually more than one invoice received over a period of time (excluding reminders etc.) and the process involves more than one person, depending on the size of the organization. This person(s) is responsible for recording the receipt, checking and double-checking and finally paying as well as entering the invoices in whatever system is used for balancing the books, be it an electronic financial system or a paper ledger. The process might involve multiple trips to the copy machine, invoices lingering on desks or shelves, repeating parts of the process due to the misplacements of said invoices, and last but not least, invoices that are paid either incorrectly or not at all.

Digitalizing the process eliminates many of these problems. The steps involve analyzing the process – defining the process in a way you think will be most efficient and deciding who is authorized to do what. The initial phase of digitization involves scanning and recording each individual invoice received as far back as required according to applicable administrative and tax laws. This can be done manually or automatically in a so-called “digital mailroom,” where advanced Optical Character Recognition technology (OCR) is used. After registration of an invoice, it should be captured in the automated process whereby the invoices are guided through your organization for approval and payment. Usually some form of workflow technology will be needed. In a couple of steps that need not be complicated, you have eliminated several major issues, some of which include: inefficiency of the process itself, saving costs on paper and labor, increase timeliness of payments, reducing overhead on incorrect payments and increased transparency of your process (auditing), which leads to significantly reducing related overhead costs.

Storage & Retention
Another one of the most often heard issues is lack of storage space. There is a general practice of storing files and documents indefinitely according to the “you never know when you might need it again” principle. Needless to say, such policies are guaranteed to overflow every space you may have (or not have) available for storing documents and files. Aside from retrieval issues, if storage is not set up properly there are other issues: the costs concerning keeping and expanding the necessary space, if said space is inadequate i.e. too dry or too humid, prone to infestation, not secured, close to fire hazards, etc. Perhaps surprisingly, the above applies to electronic storage as well. The first step for resolving this issue is to set up a Retention Policy. An RP (Retention Policy) states which files and documents need to be stored and for how long. It also delineates the processes and procedures of how to go about the destruction of files and documents in such a way that, should it be necessary, it would stand up in court and your organization could not be held liable. The RP also describes how documents will be stored, how long, as well as who has access and when. The RP is applicable to hardcopy documents and files, as well as digital documents and files.

Alongside the RP you are going to need to set up Storage & Retrieval policy. This policy delineates how you index your documents and files so that you can retrieve them as easily and quickly as possible. Basically you need to identify what exactly you will need to register all your documents and files in order to retrieve them later. This can be as simple as organizing by date, sender, subject, etc. If you add the retention period for each document and/or file into the system, for example three years, five years or 10 years, you are back in control of your overflowing desks, storage spaces, servers, disks, etc., which ultimately leads to significantly reduced costs.

Return on Investment
It is clear that, once you acquire control over your accounts receivable, you will not only have a measure of control over your processes and documents, but you will also see benefits in your bottom line. That being said, setting this up will require an investment. The investment consists not only of money, but also time and commitment from your organization. It will seem taxing at first, but the benefits outweigh the costs, and really, it’s an inevitable step that will have to be done in the near future as technology is progressing at an astounding rate. By taking control now, you will be able to take the time to decide what has priority, as well as ease your organization into the change as gently as possible, as opposed to a forced change by external forces out of your control. The return on investment for digitalization is usually long term, with an exponential return with time. There is no need to swallow the whole plate in one bite – just like a forest that can be saved one tree at a time, you can save your organization one digitalization project at a time. Before you know it, you will have, if not a paperless office, the next best thing – a much better-looking bottom line!

For information on setting up a paperless office in the Dutch Caribbean islands, go to www.curacaoinformationmanagement.com