Paper-Based Accounting is Draining Time and Money

Despite the advancing digital world, 56% of businesses rely on paper for their accounts payable operations and 40% of all business-to-business payments are made manually. Some accountants simply don't trust digital accounting software, while others prefer their 'tried and true' methods. The problem is—it's costing you! Read on to find out how paper-based accounting uses up your resources (and exactly how much time and money it costs!)

1. Time

It's no secret that doing things manually requires more time and effort. But, did you know that, per Ardent Partners (2023), manual invoice processing takes an average of 10.1 days compared to only 3.9 days for automated or digital systems? That's more than twice as long! This especially matters to vendors, who frequently cite slow invoice processing as a reason they're dissatisfied with their business transactions.

Further, human error accounts for 41% of all accounting errors. This means that there is a high likelihood of mistakes occurring due to simple errors made during data entry or other manual processes. As a result, businesses may need to allocate additional resources to rectify these mistakes, which can be time-consuming and costly. It's crucial for businesses to be aware of this issue and take steps to mitigate the risk of human error in their accounting processes.

2. Money

Paper-based accounting can cost you more than simply your time. Indeed, multiple groups have studied the cost-effectiveness of paper processing and found that, while the processing of an automated invoice costs between $2.36 and $3.06, manually processing that same invoice costs a staggering $12.44-$15 (per Aberdeen Group; IOFM). If we use the lower of both figures and take an example business that processes 1,000 invoices a year, it would cost the firm over $10,000 more to use paper processing. 

The Solution

If you're using paper-based accounting, it may be time to re-evaluate whether it is best serving your needs. Indeed, you may want to consider implementing digital accounting practices to reduce paper reliance and minimize manual tasks—just like 38% of businesses are planning to implement before the end of 2023 (Ardent Partners, 2023).