Paperless Accounting: Benefits and Tips for Easy Transition

Implementing paperless accounting practices is usually part of the bigger project of going paperless. We haven’t seen a lot of examples of modern companies with agile processes where accounting was the only one done the old way.

Since it’s all or nothing, this article will discuss the process of going paperless for all business processes with a focus on accounting.

Benefits of going paperless

Storage

Storage of paper documents could take up to 25% of the office space in your company. This is a significant overhead that could prevent you from hiring more people. Eventually, you may even consider moving to a smaller, more cost-effective office as you won’t need all that storage.

Productivity

Finding the right document in a pile of thousands can be difficult. A digital document archive with a powerful search function will significantly improve staff productivity.

There is no waste

You may have multiple copies of the same paper document. Digitalization reduces duplication and waste, and it is also more environmentally friendly.

Going off the grid

The modern hybrid work environment with many employees choosing to work from home is hardly possible without going paperless.

Appearance

A messy office with piles of papers and files is not a professional environment. Visitors, including clients, won’t be impressed.

Focus

Employees can be hindered by a messy desk covered with paper from being able to think clearly and focus on their tasks.

No drawbacks

Electronic versions of documents are even recognized in the headquarters of bureaucracy—governments. There are no tangible reasons not to switch to paperless.

Printing costs

Last but not least is the cost associated with paper, ink, and printers. Even for small businesses, these can be very costly.

Benefits of paperless accounting

Stronger Security

Cloud storage is safer than using paper files for sensitive documents. Digital documents can be encrypted and protected with multiple layers of security. You can restrict access to data to trusted users, so there is less chance of it being stolen or lost.

Efficiency

Let’s review an example of a company using Fiskl. After visiting the client’s location, the sales field employee creates an invoice on his smartphone. It takes just a few minutes because they use a template. That day, the management decided to increase prices, and the employee didn’t even know that. Since they use the product catalog, the employee always has access to the latest prices and doesn’t need to double-check with his manager if the prices are correct. Finally, the invoice is sent instantly to the client using their preferred messaging app, e.g., email, Whatsapp, iMessage, or Telegram. If they don’t pay on time, the system will send automated reminders. When they pay, the system will receive the feed from the bank, match it with the invoice and associate the income with the correct account in accounting records.
Thus, possible human error was eliminated, and the process went much faster.

Real-time reporting

Using modern accounting software like Fiskl, all expenses and income are instantly reflected in the P&L and Balance Sheet. The management can use the available data at any time to make informed decisions. When you need to share your performance with stakeholders, you just open the report without your accountant spending a night reconciling all the transactions.

Less work for your accountant

You may grant your team (i.e., Sales and Marketing) access to the accounting system. They would effortlessly make inputs to the system on their expenses and income. These inputs would instantly be attributed to the relevant accounts and be visible in the reporting without any effort from your accountant.

Tips for going paperless

Going paperless is a significant business process improvement that will deliver money, time, and environmental savings for your business, no matter how big your company is. Here are just a few tips to get you started

Fix a date

Discuss the idea with your employees and partners, and agree on a date for the switch to paperless. It should be added to your calendar—make sure everyone is aware of it. This will help them get prepared and treat the project seriously.

Start small

You will feel more comfortable if you make the transition slowly.
To go paperless in accounting, it is smart to identify a paper-heavy process and then define the solutions or services required to make that process paperless. Then you can expand by focusing on one business process at a time.

Promote a paperless culture

Leaders of companies must set an example by encouraging a paperless culture at work. They can, for example, encourage electronic documents.
Some of your short-term and long-term processes might still need paper at one point. For those exceptions, you might ask your employees for ideas on reducing paper usage or remind your team about the importance of recycling.

Make use of the cloud

Your scanned documents should not be stored on a USB stick or hard drive. Online storage is a good option to keep them safe. You can store your data using services like Dropbox, Box, and SharePoint.

Establish a logical file system

Do not place every file in the same folder. It is more efficient to create folders for each client or year.

Take care of metadata

Metadata refers to the information or keywords you use to describe each scan. This may be done by a professional scanning company. If you are doing the scanning yourself, ensure that every document contains relevant metadata. This will make it easier for your employees to search the archive.

Redaction and OCR

OCR (Optical Character Recognition) and document redaction during scanning make digital files searchable and editable. OCR converts handwritten, typed, and printed text into a machine-encoded text file that can be used as any other word processing document. Redaction tools are available to digitally erase and conceal sensitive information after applying OCR.

Scan only what you need

You might find it tempting to scan everything. This might be a sensible thing to do in some cases. This may not work if your files go back to 20 years and you have many clients. You could instead start with the most important information and then add in what you need as you go. Start by scanning all documents for the current year. You could also scan any paper documents you have retrieved from storage.

Do not duplicate where possible

It can be difficult to determine if two documents are the same. If you are not certain that the documents are identical, scan both.

Expect a temporary dip in productivity

All these changes will have a long-term positive effect on productivity in your company. At the same time, you must acknowledge the process of change brings turbulence. It is best to make it easy for yourself and go paperless during quiet periods. It is best not to attempt it at the end of the year. To help manage the extra work, you can hire temporary staff.

First, get rid of these paper documents

Internal documents—you can share internal files without printing using cloud tools like Google Docs.
File transfer systems are useful for large files. Dropbox is a popular choice for sharing reports quickly and creating group folders. Microsoft Office 365 offers a range of reporting and editing features. There are varying levels of access to edit or view documents.

Invoicing—save paper, envelopes, postage, and man-hours by using automation software. Fiskl, for instance, automates extracting data from receipts. Just scan it with your mobile phone camera and instantly get it transcribed and ready to be added to business expenses.

Faxed and scanned documents—many companies still rely on scanning or faxing documents even though digital solutions now surround them. Instead of faxing or scanning documents, use an app to snap a picture and send it via email.

Correctly dispose of all paper documents

It is essential to properly dispose of paper documents after completing the conversion process. Many scanning companies either have an industrial shredder in their facility or partner with shredding providers who can shred documents on-site or at a separate facility.

After shredding files, you will be issued a formal certificate stating that destruction has occurred. This can be used to prove compliance in the event of legal disputes. It also includes details such as where and when shredding occurred.

Train your employees to use digital tools

Your employees will find it easier to use the most recent software if you teach them how to use it. The more they embrace change, the better. You will soon see amazing results if you help them to grasp the new workflows and systems.

Secure the new norms

It takes time to transition from a traditional office to a paperless one.

Your company should take the change process one step at a time and be prepared to overcome resistance. You should be prepared for someone within your company to say, “But this is how it’s always been done.”

These are some other ways to overcome resistance, besides making paper use difficult:

• Inform suppliers. Some people believe that suppliers cannot send digital documents. It’s likely that the documents they send to you were generated by a computer system. Ask them if they are able to send you a PDF or digital version.
• Clients and employees should listen more and communicate better. Many people find comfort in the things they know or are familiar with. If you want to be paperless, you must take the time to communicate with clients and employees. You cannot make this fundamental change in your business on your own. Your clients and staff must be involved. You can build their confidence by listening and giving them the opportunity to share their thoughts on the best way to go paperless.
• Reward employees. You can make going paperless more fun by rewarding those who jump on board quickly. Ask your employees to give up their traditional notebooks in favor of using phones and laptops. The options for team-building activities related to digitalization are endless.
• Designate someone to lead the change. Identify someone in your company who can see the changes through. This person will serve as your steward and help ensure that everyone within and outside of the company is on the same page about the transition to a paperless world.