How much are paper invoices costing your company?
Most companies that still rely on paper invoices and records know digital accounting is faster, more efficient, and more accurate. So why are they still attached to paper? We'll discuss some of the obstacles preventing mid-sized companies from making the transition to digital accounting processes, such as accounts payable automation, and the costs of failing to do so.
Why are paper invoices so sticky?
While many businesses have managed to switch to largely paperless operations, there are some that still rely on paper-based processes, specifically for invoicing. This is largely because of consumer preferences. According to a 2018-19 survey from the Consumer Action organization (their most recent), areas in which consumers are most reluctant to part with paper bills include:
- Health care
- Phone service
- Internet service
- Credit cards
- Property taxes
- Vehicle renewals
There are a few reasons consumers in these industries would rather stick with paper invoicing, according to the survey. First, they worry they'll lose an invoice amid the shuffle of their email and incur fees because of a late or missed payment. Second, they'd simply rather have a paper trail. In addition to change-averse customers, other challenges on the path to digital transformation in accounting include:
Customers who are concerned over the security of entering their credit card or checking account numbers into a computer aren't tinfoil-hat-wearing conspiracy theorists. Data breaches happen every day. Reassure consumers by being transparent about the steps you're taking to keep their data safe.
Lack of tech-savvy
Technology can be daunting for someone who isn't used to using it on an everyday basis. Giving plenty of notice about the impending switch to digital accounting and offering technical assistance and support are ways to mitigate customers' fears.
Lack of infrastructure
Despite our society being increasingly reliant on internet-based technology, more than 40 million Americans still lack access to home broadband.
Switching to digital accounting is not a quick process. Already overburdened employees might be understandably reluctant to transfer all of their paper records into a digital system (or to work in both digital and paper-based formats until the transition is complete), especially with all the other repetitive tasks they have to handle.
The hidden cost of paper invoices and records
While some of the costs of paper invoices are obvious, there are other costs associated with paper-based processes. Here are just a few examples:
Poor customer experience
While the Consumer Action survey found many consumers don't like to receive online invoices, even among those, the majority of respondents would prefer to pay online. If you don't offer a customer payment portal, you could lose customers to other companies that offer this convenience.
Even if you recycle, a company that relies on paper risks losing goodwill in the area of ESG (environmental and social governance), an increasingly important consideration for both investors and consumers. Even though recycling paper is significantly better than dumping it in a landfill, it's still not as environmentally conscious as reducing your consumption.
It’s also expensive for businesses to dispose of paper when they're done using it. One well-known collection company charges about $80 per month for its smallest recycling dumpster and once-per-week pickup. More frequent pickup can cost upward of $200 per month.
Storing paper invoices and records
Before it's time to dispose of all the paper, you'll have to find someplace to store it, paying for extra square footage and/or taking up real estate that could be used for inventory or office space. Digital accounting means you can house thousands of pages' worth of data without taking up a single square inch. And you'll never have to spend hours sifting through the recycling to find that purchase order a team member accidentally threw away.
Printing and IT costs
A ream of paper (500 sheets) costs about $7-$8 and a pack of toner cartridges for a laser printer costs anywhere from $25-$200, along with the costs of mailing these invoices. When you rely on paper and printers for your operations, you'll also need to pay for IT help when the printers inevitably become jammed or stuck on a job.
Employees lose productivity when they need to search stacks of paper records to find the ones they need. That goes double when the papers are on someone else's desk, and triple for a multi-entity company where that someone else's desk might be hundreds of miles away. Digital accounting puts all of your company's records in one accessible location, and with an accounting solution like Gravity Software, team members at multi-entity companies won't even need to log into and out of multiple databases to access information.
Alleviate customers' concerns and save employees' sanity with digital
Switching to digital accounting is an important step in future-proofing your company. But given some of the challenges illustrated here, it may still seem like too daunting a proposition.
That's where Gravity Software comes in. With Gravity you can:
Reassure clients you're taking precautions with their data
Gravity Software, built on the Microsoft Power Platform, leverages Microsoft's robust security practices to ensure the most up-to-date protocols are in place. We also use role-based user access to ensure employees don't have access to any more data than they need to perform their jobs.
Provide customers with an easy way to receive and pay invoices online
Your team can create and email an invoice directly from a quote or sales order, and Gravity offers ACH and credit card processing right within the software. This means there's no transmitting data to an outside processor with potentially lax security practices. You can set up automatic billing reminders to accommodate those customers who are worried about skimming over an invoice amid their seemingly endless list of emails, and you can even use Microsoft Power Automate to set up workflows for contacting customers via other methods, such as SMS text.
Offer anytime, anywhere access
Because Gravity is a true cloud software, your team can use it from any device with an internet connection. B2B clients for your distribution company can pay invoices through a customer portal while taking care of inventory in their warehouse. Clients of your e-commerce business can pay from their mobile devices if they lack internet at home. Employees can enjoy the flexibility of Gravity's cloud configuration.
Ease the burden on your team
Before you fully commit to digital accounting, your employees will want to know it will impact their workloads. Here are just a few ways Gravity saves your team time so they can focus more on decision-making, forecasting and other analytical, value-add tasks.
With access to Power Automate and Power Virtual Agents, Gravity users can automate repetitive workflows and answer frequently asked customer questions.
Gravity's multi-entity accounting allows team members to handle duties like intercompany transactions and compiling consolidated financial reports, complete with data visualizations courtesy of Microsoft Power BI, in a fraction of the time it would take with legacy accounting software.
Gravity offers accounts payable automation, including AI-assisted vendor invoice data entry.
Ready to usher your company into digital accounting, or just ready to save time and aggravation in your accounting processes? Explore our newest features.
Better. Smarter. Accounting.