Benefits of Paperless Accounting
Accounting is paper-heavy, so it is no wonder that more firms are debating whether to go paperless. Typically, accounting firms generate all kinds of documents. However, more businesses are moving towards digital operations, which makes paperless accounting one of the best moves for your firm.
Of course, going paperless is not easy, and there is always the issue of older clients who prefer to file their taxes traditionally. This should not be a challenge, as anyone can become comfortable using technology with the right support.
There are numerous benefits of paperless accounting. In the last few years, there has been an increase in remote operations, including accounting processes such as paying bills online. This is not only convenient but also ideal for security.
Advantages of Paperless Accounting
Below are some of the main advantages of paperless accounting:
1. Saves Space
Choosing paperless accounting helps save space because if there is no paper, there is no need for storage. Typically, accounting firms use up to a quarter of their office space to store paper documents.
Paperless accounting helps reduce storage overheads, leaves your office looking clean, and improves productivity by reducing paper clutter. Additionally, your office will look much more aesthetically appealing without piles of paper everywhere.
2. Document Organization
If you are still using paper, you will likely spend a lot of time sorting through piles to find a single document.
Making the switch to paperless in accounting makes tracking down a single document among thousands easier. Simply use the keyword search function and find your document within seconds.
In addition, you can scan hard copies into a streamlined paperless filing system. This gives you access to all your business documents quickly from any location. Clients no longer have to wait while you find their invoices and track down their statements.
Using paperless accounting also makes it easier to track retention periods, which legally protects your firm.
3. Instant Document Retrieval
As discussed earlier, paperless systems allow you to access your files from any location. Electronic file management allows you to retrieve your documents in an instant.
It is also possible for everyone in your organization to access the required documents to move accounting processes forward much faster.
4. Security
One major weakness of using paper is it can be easily destroyed by fire or flood. However, paperless accounting gives you security. Layers of security on cloud-based platforms protect your digital accounting systems.
Accounting documents stored digitally are also less likely to be misplaced or stolen. Even if you accidentally delete a file, you can easily retrieve it from the Cloud.
Electronic document management systems are also protected using passwords, data encryption, and other security systems that keep your documents secure.
Most cloud-based accounting systems have upgraded their security to bank-level status to protect customers’ financial information.
5. Eco-Friendly
The State of the Paper Industry Report by the Environmental Paper Network reports that paper usage has decreased in North America, with more paper recovered for recycling purposes. More businesses are becoming environmentally conscious and striving to reduce their carbon footprint.
This involves using less paper and more companies are committed to recycling. However, office paper still accounts for up to 20% of the total paper usage in the country. Of course, going green is more than reducing paper production and usage.
Going paperless in accounting also means there are fewer energy emissions and less consumption in paper production, faxing, printing, and copying.
6. Financial Benefits
Going paperless means you not only save on paper but also save on associated costs such as ink cartridges. You also do not need to make expensive purchases and upgrades for printers, fax machines, and copiers.
7. Improved Customer Experience
Paperless accounting is also responsive and efficient, which improves the customer experience. Having quick and easy access to documents allows you to respond quickly to your customers with the correct information.
In addition, paperless accounting systems also reduce the risk of human error as most systems are designed to alert you of any mistakes. These systems also increase processing time, which leaves your customers more satisfied.
Operating a paperless firm also tells your prospective customers that you are a modern organization. Most customers are more comfortable working with businesses that keep up with modern business practices.
8. Improves Collaboration
Switching to digital filing tools improves collaboration in the workplace. If an employee of a client needs access to a specific document, they can easily search and access it from their office. It is also possible to collaborate on the same document simultaneously, improving productivity.
Another benefit of digital accounting tools is that you always have access to the most recently updated version of the document.
In more modern times, digital filing systems also index your documents and offer editable fields. This makes it easier to collect signatures from relevant clients and employees on the same document.
Disadvantages of Paperless Accounting
While paperless accounting offers numerous benefits, there are a few downsides, such as:
1. Consumer Habits
Most businesses offer a quick and efficient point-of-sale system. Unfortunately, while this benefits the company's paperless efforts, some customers may feel apprehensive about leaving their receipts behind as they prefer a physical receipt to review later.
This can easily be remedied by offering digital receipts or making provisions such as discounts for customers who choose paperless receipts.
2. Potential Hackers
While most digital filing systems are heavily guarded, there is always the threat of hackers accessing clients’ financial data.
However, this is easily solved by regularly updating virus protection software and staying updated on your cloud-based accounting terms and conditions.
3. Hardware and Software Problems
Potential issues such as power outages, system crashes, and other interruptions can lead to losing vital information.
We recommend having contingency plans if you cannot access your digital filing platform. Regularly backing up your information also makes it easier to recover your information.
Implementing Paperless Accounting Solutions
While going paperless may seem like a huge undertaking, it is more reliable and efficient compared to traditional accounting. You can use paperless accounting to elevate your firm to the next level.
Paperless accounting has numerous benefits, such as increased productivity and streamlining the daily operations in your office. It also makes managing all documents necessary for your bookkeeping functions easier.
We recommend going paperless as we strive for a greener environment.
