Running a Green and Streamlined Business: Establishing a Paperless System

Posting by Joel Susco, CPA

Business inefficiencies are often linked to slow, inaccurate, and poorly defined paper-based workflows. Going paperless isn’t just about going“green” – it can also help you save significant time and money. By transitioning to paperless systems in a variety of areas, you can make your business more efficient and also potentially increase profitability. You may be surprised at the far-reaching impacts that simple changes in this area will have for your business.

Streamlining Your Business with Paperless Systems

Going paperless involves more than just scanning relevant documents. To establish an electronic workflow for any process, you must first analyze your current process. In order to look at how to successfully transition to a paperless environment, we are going to use accounts payable as an example. Your company’s accounts payable process probably looks a bit like this:

  • A stack of bills arrive through the mail. A staff person opens them, possibly reviews them and they are routed around the office for review.
  • Once approved for payment, documentation is attached, copies are made, and they are then forwarded to the accounting department for payment.
  • The accounting department manually enters the information into your accounting system.
  • Checks are issued, signatures are obtained, and envelopes are stuffed and mailed.
  • Finally, a staff member spends time filing all the necessary paperwork.

As you can see, an invoice may be touched five or six times, creating significant inefficiencies and wasting staff time.

How to Go Paperless

Errors occur most when duplicate invoices are processed for the same product or service. Significant time is wasted when there are no controls to monitor duplicate processing of invoices and revenue can also be lost when vendor discounts are missed or poorly tracked. A paperless system will help you more effectively track work orders, invoices and your issued payments.

To begin the transition, first, check with your vendors to see if they accept electronic payments. Imagine this: vendor invoices are electronically sent directly to the company contact, the invoice is reviewed and backup documentation is attached and forwarded to the accounting department for payment. Checks are then prepared or an electronic wire authorization is formulated and forwarded electronically for signature or authorization. Digital copies of the vendor invoices, backup documentation, and a copy of the check or wire authorization are kept electronically in a vendor folder.

If you are unable to obtain electronic invoices, a mostly paperless system is still possible. I suggest scanning paper invoices with backup documentation and then shredding the paper information. Key information is then captured and the electronic workflow starts with the initial approval process.

Going Paperless with Employee Expenses

Paperless expense management processes often work well with employee expenses. Talk with any employee and they will tell you how much they hate the thought of submitting their expenses after a recent trip – filing out the paper expense report, finding and attaching all those paper receipts – the time wasted is enormous. Consider software or applications to help manage expense reporting, such as Expensify, Certify or Insperity. The time savings often far outweigh any costs.

Don’t Forget Internal Controls

Regardless of whether or not you go paperless, ensure that you have instituted proper controls. Establishing a proper segregation of duties, ensuring that an approval system has been put in place, and performing regular reconciliations is key.

This Spring, resolve to increase your business efficiency by considering a paperless system. This step will go a long way for the environment – and your business’s bottom line.


Photo Credit: Dimi15 via Compfight cc

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