What paper is costing your bottom line

For some years now the use of paper at various stages of business has been called into question. Society as a whole no longer accepts companies using paper without restraint, since it is well known that this has significant effects on the deterioration of the environment.

Not only are various regulations beginning to curb its indiscriminate use, but consumers, through their purchasing decisions, are also turning toward organizations that are responsible in how they use paper.

While that subject is very serious, interesting and necessary, in this article we will focus on another side of the same problem.

How does paper affect my business's profitability from the standpoint of management and resource efficiency?

Paper plays a decisive part in making a business profitable.

Above all in businesses that, for various reasons, have complex internal processes. A clear example is companies with field staff spread across different points on the map, which face a complicated situation when it comes to recording, moving, processing and systematizing information on paper.

In processes like these, using paper has two major areas of influence that bear directly on a business's profitability.

First of all, recording data on paper prevents the generation of real-time information. Paper has to be transported and processed, which creates a gap in time between the record and the turning of data into intelligence through reports, dashboards, papers and so on.

The potential profitability growth from applying business intelligence is hard to estimate, but 8 out of 10 operations managers in the region believe that business intelligence applied to operations can increase profitability by figures that never fall below 30%.

The other major area where paper affects a business's profitability is in generating revenue and actually collecting it.

What do we mean by that?

If work is recorded on paper, those records have to travel from where the service was delivered to the processing center. That means paper goes missing and/or gets damaged. An estimated 1% of processes recorded on paper are lost before they are processed. A job that is not recorded is a job that is not invoiced, and therefore a direct loss to the profitability of the business, since the costs of unbilled services are paid all the same.

On top of that, having to transport paper records creates a very long delay between when services are performed and when they can be invoiced. Moving from paper to a digital management tool like GoDoWorks saves around 3 weeks on average in invoicing time for the companies that make the switch.

Being able to invoice sooner makes a big difference to a company's cash flow and allows the operation to be far more profitable, since it becomes possible to take on less debt and burn through fewer reserves covering very long payment cycles.

Finally, processing data from paper records is left to the subjectivity of whoever reads and handles that information, which produces discrepancies between the services delivered and what is billed — ending in re-invoicing that only drags the cycle out, or simply reducing total billing in cases where the error goes unnoticed.

With these factors in mind, it is clear that paper will play an ever smaller part in the business world. Beyond helping the environment by removing paper from the process, we will also be generating positive profitability for our organization, securing billing and reducing delays and errors. 

The smaller the part paper plays in your business, the more profitable you will be.