Any time you make an investment that allows you to reduce daily expenses, the benefits accrue day after day, whether you’re putting new insulation in your home to lower utility costs or implementing new technology to increase your company’s efficiency.
Document management software offers time and cost savings in a variety of daily applications. But where should you focus first to achieve the best return on investment (ROI)? Here are five specific areas where document management allows you to capture significant ROI:
- Document processing and approvals: Many collaborative tasks require document handling, and improving the efficiency with document management has a significant impact on your company’s bottom line. You could calculate the amount you’d save on your own, or you could use DocuWare’s document management ROI calculator.
Let’s say your accounting department processes 100 invoices per day and spends an average of three minutes storing each one in a paper-based system. In addition, the department needs to retrieve 10 older invoices for reference, at an average of five minutes each (the amount of time depends greatly on the age and location of these files).
100 invoices x 3 minutes to store = 300 minutes
10 invoices x 5 minutes to retrieve = 50 minutes
= 5.8 hours/day
An effective document management system could reduce the time you spend on storing or retrieving a document to 30 seconds, on average. In the example above, you would save 98 hours and 20 minutes of employee time per month. When you consider the average compensation for employees in your accounting department, you soon realize there’s an opportunity for significant ROI.
- Responding to customer and vendor inquiries: Of the invoices you process, some require special treatment — perhaps about 5 or 10 percent. Maybe a vendor calls to say that you’ve paid the wrong amount, or a customer wants to know why a discount wasn’t applied to their invoice. When this happens in a paper-based process, an employee needs to locate and review the invoice. Even if they’re just walking into the next room to retrieve a binder, it’s time-consuming. Then, the employee must call the vendor or customer back to resolve the issue, and eventually re-file the invoice.
In a paper-based system, it’s easy to spend 15 or 20 minutes responding to a single inquiry. Replacing it with an electronic document management system cuts the retrieval time down to seconds, and allows employees to resolve issues without getting off the phone, helping your organization to quickly achieve a strong ROI.
- Preparing sales offers: When salespeople prepare offers for a prospect or customer, they often go through several versions before closing the deal. If your sales team is using Microsoft Word, for example, they have to first search for the last version of the offer. Then, they would edit the document, save it with a new file name and send the new document to the customer. This process is time-consuming and takes away from the time salespeople have for their main focus.
If your sales team needs to create three to five versions of an offer to close the deal, and each revision takes an average of 15 minutes, that time adds up quickly. With a document management solution, it’s faster and easier to search for the most recent offer, open it and save your changes. The system automatically creates a new version of the document, so salespeople don’t have to worry about renaming the file or saving it in the right place.
- Handling delivery notes: When your company delivers a product to a customer, your driver has the customer sign to confirm receipt. While this process is often managed electronically with a tablet, more traditional industries still use paper delivery notes. A driver may deliver 10 or 20 orders in a day and turn in those delivery notes at the end of the day or week. At that point, employees in the main office look through these notes and begin creating and sending out invoices.
In a paper-based process, it takes a long time to check the delivery note, search for the right contract or purchase order, create the invoice and finally put all of the documents together in a file for storage. An electronic document management system dramatically simplifies this process, saving a lot of time and money. In addition, using a mobile device allows the driver to scan or capture delivery notes and send them to the main office after each delivery, allowing you to invoice the customer much earlier.
- Entering indexing data: If your company receives invoices on paper, processing and indexing them electronically is a great way to save time and money. Even if you already scan in paper documents, you still need to capture several pieces of data, such as the supplier name, amount, invoice number and date. Since invoices vary from company to company, you can’t just set up a simple recognition workflow to look for certain information in specific areas of the document. Most document management solutions require employees to key in this data manually, which might take an average of 1.5 minutes per invoice.
In a document management system that uses intelligent indexing, you “train” the system to analyze each invoice and automatically capture the correct data. If you need to scan in 100 invoices per day, this type of system should be able to correctly index and store 85 of them just by clicking “save.” It’s a significant increase in efficiency: Instead of spending 2.5 hours each day keying in the data, your employee could cut that down to only 22.5 minutes.
Companies invest in document management software for a variety of reasons: Some need to manage a growing workload, while others seek to reduce tedious, frustrating tasks. If you want to capture significant ROI with your solution, start by calculating your savings for these five areas, and choose the best opportunities for your business.
Learn more about what processes to digitize and how to turn your business into a paperless office.