It's a new year and many entrepreneurs find it's the perfect time to implement improvements to their business. Have you thought about going paperless? The idea has been kicked around since 1975, but it's still not a widely utilized practice in small business today. Going paperless at work (and at home too) has many benefits.
Although recycling does help, it's better to avoid it on the front end. It's like bringing your own fabric bags to the grocery store to haul your food versus using plastic bags provided by the store. Reducing the amount of paper you receive in the first place is a great start. Ask vendors if they have paperless billing options. If you make business purchases at brick-and-mortar stores, many can can e-mail receipts instead of printing them out. And for paper you can't help but receive, more and more municipalities are accepting shredded paper in their recycle bin. Scan and save documents you receive, shred, bag, and recycle.
Businesses can outgrow the space they're in simply because of the increasing number of filing cabinets and archive boxes they need to store documents. Moving to a bigger space to accommodate that equals higher costs. The alternative, renting an offsite storage space, also means an additional expense. For entrepreneurs with a home office, the space dedicated to their venture becomes smaller and more cramped over time. Unless you're in an industry that says otherwise, very few documents have to be retained in original form. You can realistically store all important, original paperwork in a manila folder or, at the most, a small two-drawer file cabinet.
One of the most common concerns with going paperless is how to deal with an audit from the IRS or some other taxing authority. Luckily, the IRS has been accepting scanned documents in lieu of originals as evidence since 1997 and many other agencies have followed suit. Unless you live in a jurisdiction that hasn't adopted this practice, retaining originals isn't necessary anymore.
This sounds a bit motherly, but what if there was a fire and all you have are paper documents? What if they're damaged beyond repair? How would you recover that information? With the proper backup measures in place, you will never lose your data in a paperless environment. Data storage options abound ranging from Cloud-based solutions to storing a physical backup drive offsite. No matter your preference, there's a solution out there that's right for you.
Using a virtual filing system will increase efficiency with many tasks. Every document is easily found and readily accessible. Receive an email request from the bank asking for numerous pieces of documentation? No problem! Simply reply and attach what they need. No more physically searching through file cabinets, pulling out paperwork, scanning, sending, and then filing back. Did I mention your accountant will love you during tax time if you do this?
If you choose a Cloud-based storage solution and accounting program, your office is essentially everywhere you go. If you have employees, it gives them more work-from-home options. You're no longer tied to one location. Because of this portability, a paperless office improves turnaround time and reduces reaction time.
Are You Ready?
Going paperless is easier than you think. For the average small business, it costs almost nothing to get started. The biggest challenge is initially setting up your "virtual file cabinet". It should be easy to navigate and intuitive so documents can be quickly located with minimal effort. If you don't know where to start and need help getting it set up properly, talk to a colleague, accountant, or business consultant who has experience with paperless offices.
I am 100% paperless with both my business and personal finances. My business has been paperless since inception and I started with my personal finances in 2014. I don't receive one bill in the mail. I don't own one file cabinet. There are no stacks or piles of papers on my desk…just a notebook to jot things down while I'm on the phone. My office is open and airy; I don't feel bogged down or encroached upon. It's a wonderful and freeing feeling. I wholeheartedly believe in everyone going paperless and hope that you will consider making the change. You won't regret it.