As you think about next year, how many filing cabinets do you want taking up valuable office space? How much staff time do you want wasted searching for documents? How many documents do you want misfiled or lost?
If you’d like the answer to be “much less” or “none,” then you’ll want to consider having your documents scanned and implementing a document management system to make them instantly available. This guide will help you identify budgeting guidelines to go paperless in 2015 and when to expect a positive ROI.
How Much Should I Budget?
Costs vary and are usually priced based on how many documents you need scanned and stored, what type of documents, the condition of the documents and how quickly you need them scanned. To start with, you need to have an idea of how much paper you have. You can estimate your document volume by counting the following:
- Number of filing cabinets: a vertical 4 drawer file cabinet holds 20,000 pages on average
- Number of documents not filed: use the 80/20 rule if you don’t know (20% being not filed)
- Number of boxes in your office: a standard bankers box holds 2,000 to 2,500 pages on average (10”x 12”x 16” box dimension)
- Number of boxes in offsite storage that you retrieve on a regular basis
- Number of inbound documents per week, month or year that will need to be filed
Once you have these numbers, a document scanning provider will be able to estimate the cost to scan them. Tip: An experienced and high quality scanning company will want to see your documents before providing an estimate. They may also recommend not scanning all of your documents but only the most critical ones.
The good news: the cost of both document scanning and document management software has never been more affordable. This is especially true when you send out your documents to be scanned by an experienced document scanning company, and when you use cloud document management – both options become predictable and affordable monthly expenses.
The Cost of Doing Nothing
Everyone has different cost sensitivities. In our view, the amount to be budgeted should only be identified after you estimate what doing nothing is costing you. Specifically, you’ll want to estimate:
- Annual cost per square foot of floor space taken up by filing cabinets, bankers boxes and other containers holding paper. Tip: Each 4 drawer file cabinet takes up 15 square feet
- Annual cost of offsite storage for boxes
- Annual cost of retrieving documents from off-site storage and having them delivered to your office
- Financial exposure due to not meeting regulatory compliance guidelines
- Weekly clerical filing hours (file clerks, admins, temps) and hourly wages (including benefits)
- Average time it takes to locate and retrieve documents
- Average hours to retrieve files for annual audits (internal, IRS, others)
- Cost of misfiled or lost documents: On average, 7.5% of your documents are misfiled. Multiply that number by $125 (the average cost to reproduce a document)
- Annual cost of paper filing supplies
- Miscellaneous costs (FedEx, postage, copying, faxing, delivery, etc.)
Once you have even just a ballpark estimate of these costs, it will quickly become apparent what it’s costing you to do nothing.
What Is the ROI?
From our experience, the payback period is often less than a year, with a positive ROI often being realized in just a few months. And keep in mind this ROI is in addition to benefits from efficiency gains, quicker and easier audits, meeting regulatory requirements, achieving business continuity in the event of a disaster, ability for employees to work remotely, and mobile access to documents.