Document management can refer to a wide variety of tasks, but the umbrella term basically means storing documents in a digital, searchable format. Executives often hope their document management software will result in cost savings. If you’re using quality software effectively, you should be able to capture savings in various areas of your organization’s operations. Whether you’re new to electronic document management or want to prepare a more comprehensive report, this article will help you identify areas to evaluate as you assess your document management ROI.
Document Printing and Storage
Let’s begin with the most obvious change. Opting for electronic document storage when possible reduces the need for hard copy files. Paper, ink, printer, and similar document production costs may be among the first sources of savings. Review office supply costs throughout the organization to get a sense of the overall impact.
If you’re able to transition archived files, it may become possible to reduce or eliminate rented storage space costs. Reclaiming and repurposing onsite office space that used to be dedicated to filing can also contribute toward savings.
Adobe’s Resource Saver calculator estimates roughly $275 in savings per 10,000 pages printed. Average rental storage units run from around $45-$137 monthly, depending on the size of the unit and geographic location. Businesses that deal with high volumes of paperwork can easily save thousands on materials alone. If your business experiences both high volumes of paperwork and fairly modest office space availability, reducing or eliminating physical storage can have a major effect.
Faster Collaboration and File Access
Document management software is designed to improve file searching and sharing. Finding the right document faster is good for workplace efficiency and productivity (not to mention it makes for a more satisfying work experience to pull up the file you need with a few keystrokes). There are a few ways to assess how this benefit translates into cost savings.
Features like electronic signatures streamline finalizing contract agreements. Each electronic signature completed represents savings on paper, postal or specialty shipping costs, and most importantly, time. Depending on your organization, you may notice productivity improvements in certain departments or for certain employee roles. More effective document management may even contribute toward logging more billable hours, since legal counsel may spend less time tracking down materials they need.
Streamlined Employee Management
One of the common objections we hear about advances in technology and automation is that, “machines will take jobs from real people.” What fewer people realize is that a sophisticated software system can help employees work at their best potential.
Managing employees entails significant paperwork, including any or all of the following:
- Resume, cover letter, and other job application materials
- W-4, I-9, W-2, or 1099 form (for contract workers)
- Employee agreement
- NDA documents
- Insurance exchange notice, if applicable
- Enrollment forms for benefits like health insurance
- Any medical records needed to demonstrate an employee’s entitlement to workplace accommodations
- Direct deposit authorization and other payroll materials
- 401(k) or other retirement plan enrollment documents
- Annual reviews and other assessments
- Records of any disciplinary action needed
Organized employee records help small business owners assess performance, determine appropriate raises, and make informed decisions regarding benefits like 401(k) match.
Reduced Missed Deadlines and Penalties
At first glance, this seems like a difficult measure to track. One essential benefit of effective document management is optimizing the ability to stay on top of project milestones. Electronic systems often have more auto-alert features than paper filing, making it easier to set reminders. The end goal is to come as close as possible to eliminating missed deadlines altogether.
It’s impossible to say which unnecessary vendor contracts would have been accidentally auto-renewed or which projects would have fallen short of performance goals without timely review. Financial officers may, however, compare penalties incurred and percentage of successful projects year over year. General counsel may offer input into efficiency of preparation for new compliance regulations, and how well the organization fulfills required standards. The better organized the new document management system is over the old one, the higher the chance is that you’ll be able to point to clear improvements in compliance and contract management.
Increased Opportunities for Growth
Scaling document management is an important challenge for growing businesses. Higher volumes of work and additional clients add welcome revenue, but it can become difficult to know how to manage the increased administrative load and maintain the same quality of client work. Smaller businesses in particular may struggle with this issue, since they are more likely to have employees who fulfill the responsibilities of several office roles.
Reducing time spent manually inputting data and accessing information instantly to reduce callbacks for customer or auditor queries frees up hours of time for employees to tackle more business-critical tasks. You may find that your business or department is better equipped to process applications faster, letting you meet more deadlines for grants and other opportunities. Like the “penalties avoided” savings, estimating which opportunities you would have had to decline is an inexact science, but it’s fair to point to effective document management as a contributing factor toward increased ability to pursue growth opportunities.