Paperless bookkeeping means keeping all accounting records, reports, and transactions digitized. The objective is to reduce transaction errors and minimize—if not eliminate—document storage. It’s an approach adopted by many firms. Some corporations are already working on gradually becoming paperless by upgrading their existing systems.
Minimizing paper-based transactions and going digital will enhance company efficiency. Digital documents are simpler to keep, organize, search, and process. With a paperless system, your employees can spend more time working and less time shuffling paper. It’ll also maximize management time, especially for the company’s approving authorities. That’s because they can now approve and process transactions anytime and anywhere using an electronic signature.
Business owners today are always looking for innovations to reduce administrative time and boost production or company performance at the same time. Some firms even use online accounting software in combination with paperless bookkeeping for a truly digital experience and up to date experience.
Benefits of Paperless Bookkeeping
Easy Access to Data
It usually takes time to look for documents to process and approve. Bookkeepers typically have difficulty shuffling papers and financial records every time someone asks them for financial data.
But as the company goes paperless, stored automated financial data will give bookkeepers easy access to accurate information. After all, with a single click, essential data are instantly accessible from electronically stored files. Therefore, bookkeeping, invoicing software, and other accounting software make accounting personnel more effective at their jobs.
Reduce Document Handling Time
Each document that arrives in a paper-based accounting department requires manual processing. Consequently, your accounting team spends a significant amount of time compiling and arranging paper. On the other hand, an enterprise content management system saves a substantial amount of time by replacing each of these laborious procedures with a few keystrokes or the click of a mouse.
Reduces Document Storage and Supply Costs
The resources used in paper accounting, such as file cabinets, manila folders, paper, and printer ink, are all expensive. Businesses also have to consider the expense of storing space for all these documents. However, you get to replace all these materials and physical space with digital document storage at a fraction of the cost when you use paperless office software.
Easy Document Retrieval
With electronic file management, your accounting team may retrieve any information they need in seconds. A few clicks will replace the chore of getting up, going to a file cabinet, and searching through seemingly countless folders. You may also provide everyone in your company access to any documents as soon as they need them using enterprise content management.
Increased Response Time
Paperless bookkeeping enables your accounting department to respond to queries from suppliers and customers. When someone calls to inquire about a payment or a purchase order in a paper-based system, you must stop what you’re doing, look for the papers you need, and then call the other person back. Meanwhile, you can retrieve electronic documents in a matter of seconds. This enables you to reply swiftly to requests and cut down on laborious procedures.
Transitioning from Paper Based to Paperless Accounting
There are many benefits to paperless bookkeeping. One of the main ones is that it can increase you level of customer service through increased response time thanks to easy document retrieval. If you are ready to adopt paperless bookkeeping at your firm, here are some tips to ensure that your company’s transition will be smooth and successful.
Gather and Segregate Files
The preparation for scanning is the first step in the paperless conversion process. It’s a good idea to identify and segregate file boxes depending on their retention durations when arranging data before scanning. You should also remove any staples or paper clips to speed up the scanning process. As a result, you can reduce the cost of scanning documents.
Utilize OCR and Redaction Software
This tool makes new digital files searchable, editable, and secure, especially since OCR (optical character recognition) and document redaction are used during scanning. OCR converts typed, handwritten, and printed text into a machine-encoded text document that may be utilized the same way as any other word processor document. Redaction tools may digitally blackout and disguise sensitive information after OCR.
Choose and Implement Efficient Storage Solutions
A centralized document management system (DMS) or a cloud-based storage system must be built to distribute and store digital information. The following are the features and functions that should be considered:
- Automatic document routing after scanning
- Paperless bills, expenses, statements, and reports management
- Depositing checks into distant banks or credit unions is easier with these tools
- E-Signature feature
Shred Old Paper Documents
It’s essential to dispose of paper documents properly when the conversion process is over. Many scanning companies have an industrial shredder on-site or work with a shredding company that can destroy the copies on-site using a mobile shred truck or off-site at a separate shredding facility.
Obtain Certificate of Destruction
After you destroy your files, you’ll get a formal certificate of destruction. This will act as evidence of compliance in the event of a legal dispute. It also contains information such as where and when the document shredding occurred.
It’s Time to Adopt Paperless Bookkeeping
Soon enough, paperless bookkeeping will be the norm. However, if the transition isn’t smooth it may overwhelm management and accounting personnel. So, consider the information presented here. These tips will help guide you as you strive to implement a smooth and effective paperless accounting transition.