Accounting Software
Published February 02nd, 2017 by

How Paper-Based Systems Compare with Digital

Everyone knows how a traditional office looks and feels. There are manila folders stacked on desks, filing cabinets lining the walls, and a row of printers humming next to the cabinets. Problem is that paper is getting more expensive to buy and store. There are also hidden costs within a paper based system, based on management of a paper files, customer receipts, and purchase orders. Surprisingly, there isn’t much information describing the costs of a paper-based system. Some people feel it’s not worth noting or explaining, because the reasons for going digital are obvious. I have read several independent reports that give estimates at 40% of all small businesses in the United States use paper-based systems. Others are less (depending upon sample sizes, geography, etc.), but the fact remains, a large percentage of businesses are using an antiquated system.

The Paper Pushers

Unfortunately, going green has negative connotations for some business owners. Yet, they are losing a lot of money and in some cases losing customers with a paper-based system. Why do they cling to paper? Because paper is a tangible asset, held by hands and not on a hard drive. There is trust in the physical presence of paper. Another reason is the upfront costs of paper appear to be cheaper, when in fact, over time, the costs compound like interest in a bank. More paper means more space is needed, and more wear-and-tear on printers and people to manage it.

Troubles with vertical filing.

There is a false sense of security and reliance upon a paper trail. Paper-based records are subject to damage through overuse, poor handling or fire. To avoid loss or damage, a business would need to create multiple copies of one document and store it in multiple locations, which is far more expensive than a digital copy stored in the cloud. And, paper is not nearly as secure as digital, especially when digital files are stored in the cloud.

Time for a Change

Many of these paper-based businesses are falsely led by the belief that if their system isn’t broken, then it doesn’t need to change. For them, changes will create challenges for their employees and result in poor customer service. Integration and training are common complaints for changes in any system. However, most employees are familiar with how to use computers, tablets, and mobile. In 2014, only two years ago, 75% of Americans owned a tablet or e-reader and 64% of American adults owned a smartphone. The number of tablets and smartphones has grown in the past two years, not slowed or stopped. Employees have embraced technology to make their personal lives easier and training them on a computer or mobile device should be simple.

Ever imagine what it would be like if your grocery store used a paper-based point of sale? There would be no one in line and no one at that store. We need to consider time at the counter. Checkout time dramatically impacts customer perceptions of service and influences customer buying decisions. Studies have shown that 88% of consumers want a quicker checkout experience. For example, if the checkout process is too long, customers will leave the store before selecting items from the shelves. The retail industry calls this “shopping cart abandonment.” Or, a potential customer may walk past the store, see that the lines are too long, and keep walking—called a “drive-by.”

A customer’s experience depends upon how quickly they can step through a transaction. Availability of products and speed of service are essential to this premise. Consumers often feel that clerks and employees are too busy when handling paper transactions to answer questions or help with purchasing decisions. And, customer frustration increases when the only person at the register has to go into the back room to see if an item is in stock. These minor frustrations will build up and affect return business, as well as the best marketing tool a small business has—word of mouth. In today’s global marketplace, businesses can’t afford to fall behind the competition, especially with customers who are their next-door neighbors.

What About Bad Penmanship?

Finally, updating paper records and sending them is expensive. Employee productivity associated with file retrieval and manual data entry is a major problem. Some paper records can’t be edited and require new records. Misplaced files add to the time and energy an employee spends on what could possibly be a simple task. In order to send files to vendors or customers, they need to be mailed, faxed or scanned and emailed. The cost of postage and shipping is only getting more expensive, as well as the time it took to send it.

Employee Engagement Is Important

A paper-based system can lead to employee frustrations and disengagement. Businesses with a higher level of employee engagement have higher rates of productivity and overall success. Employee engagement has a positive influence on an employee’s behavior and performance with tasks. It’s a level of emotional connection an employee has with their company. Employee turnover and reported sick days are less likely within engaged workplaces. Positive behaviors lead higher levels of customer service, safer places to work, and higher quality of goods produced.

The Digital Office

There are many advantages of digital based systems and storing data in the cloud. The primary reason is accessibility. Why be limited to a single storefront? Digital offices can easily compete in the online world, and in many cases, they have no other choice. Websites, online shopping tools, electronic data interchange (EDI) make it possible to complete orders and payments in seconds. Paper based systems can take days or weeks to process transactions or manage inventory. A robust EDI improves delivery time and leads to higher customer satisfaction.

Inventory management software is a must for retailers, especially gift stores, who have SKUs numbering in the hundreds, even thousands, and active accounts exceeding those numbers. An inventory system can give alerts on particular SKUs, regarding their shelf-life, and provide reports for products that are selling and the ones that are not. Understanding stock levels and rotating products (that do or don’t sell) improves product freshness. Time is against retail stores,

because the longer an item sits on the shelves, the less profit is made. There’s also the dreaded dead stock report. These are the items that will not sell and are collecting dust. A major benefit with inventory management is organization and workflow that leads to a better understanding of the market and what they are buying.

Information is always within reach.

Because inventory software has combined with point of sale systems, there is so much more a digital based system can do. They become employees performing the work of several people at the same time. This allows a store to become highly productive and customer-centric. Not only is it important to have a digital-based system, but I would argue that it should be as close to an all-in-one system as possible.

Finding an All-In-One System

Using a single system for inventory management, sales reporting, and accounting reduces mistakes made during data capture. Loss of important information may occur during the transfer of data between one system and another, which causes significant problems that impact inventory and sales. Small businesses can expand beyond simply going digital and have their point of sale software handle inventory and accounting. They can create important sales reports and inventory alerts before getting the paperwork back from the accountant. Best of all, it keeps everything under one system, allowing for fewer mistakes and quicker operations.

Any business that wants to expand, either through inventory or opening a new store front, needs to have a digital system in place. A new store means double the amount of paper work. The examples of limitations for paper-based systems is clear on this point—digital systems are more flexible—especially when hosted in the cloud. A major function of a cloud-based system is to provide an easy and secure way to back-up information on multiple servers, called redundancy. Also, the cloud is always available when away from the office or on the road at a tradeshow or sales call. Managed service providers with cloud-based technology have the best security in place. Any breach in their data and they could lose a lot of customers. Everything is accessible through a tablet or phone. It’s a system that grows with you.

Saving the Best for Last

Customers. Who are they? What did they buy and when? Will they be back? These are all best answered through a digital system. Imagine the amount of time to assemble these answers from paper. It might take a day for one customer. Some digital systems can answer these questions within minutes for every customer in their system.

Smartphones, tablets, and laptops – everything at your fingertips.

Customer management systems are invaluable tools for marketing and sales. Connected with a point of sales system, the whole system works together, efficiently and effectively, leaving owners and employees with more time to spend with their customers. Employees will have the ability to answer questions and be more proactive than reactive. Time spent providing a more positive customer experience equals greater sales.

Digital Is the Traditional Office

We live in a fast-paced world that expects immediate results. No one wants to stand in a long line, especially when they can shop from home. Reduced times during checkout equates to increased sales and greater customer satisfaction. Use of digital and cloud based systems increase customer and employee satisfaction, and can be a tool for global communication. Merchants using paper based transactions will be left behind, while their competitors will gain market share through a greater capacity to do more with less.

Michael Premo
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Michael Premo

Writer at Smartwerks
Michael collaborates with internal and external clients to design targeted brand messaging and content management strategies for small and medium-sized companies. His marketing experience has deep roots in the tech sector, working with both sides of the channel and managed service providers. Smartwerks has been witness to more than 30 years of experience in the point of sale market, software development, and managed services. Over that time, the software and retail industry have experienced some dramatic changes, and Smartwerks continues it’s unwavering goal of providing software solutions for a range of small and medium-sized businesses.
Michael Premo
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