ResponsibleBusiness
How do you go paperless?
What processes must a business go through in order to successfully go paperless? Richard Crump reports
For many organisations, the sheer volume of daily paperwork makes transitioning to a paperless system a daunting prospect. But firms need not be confined to ledgers and filing cabinets as the shift towards digitisation is ushering in an era where algorithms replace calculators, and servers supplant shelves of paperwork.
The shift to remote work, accelerated by the Covid-19 pandemic, and the switch to a digital tax system through HMRC’s Making Tax Digital, has further emphasised the need for businesses to digitise processes and reduce dependence on physical paperwork.
A McKinsey study in 2020 found that 55% of respondents embraced partial or complete digitisation as opposed to only 29% before the pandemic. Respondents were most likely to report a significant increase in remote working, and customer preferences for remote interactions that they expected to remain after the crisis.
“If there is one thing that lockdown taught accountants, it is that they can survive without paper files,” says Shaun Mary, a partner at Lovewell Blake, a firm with eight offices across East Anglia. Lovewell Blake started going paperless in 2008. Mary recalls a colleague who described the route to paperless as ‘less paper’ 15 years ago. That is even more true today as lockdown accelerated the digitisation of the remainder of the firm.
“We can’t change the outside world or HMRC sending us paper, but accountancy practices can digitise their own processes and grasp the benefits that creates,” Mary said.
Where to start?
The average office processes 10,000 sheets of paper a year, with more than 75% – the equivalent of small tree – ending up in the bin, according to one estimate.
This comes with practical issues, such as ensuring there is enough storage space, which can impact daily operations. At the same time, the digitising process inevitably creates a workload of its own.
For some firms, this might involve transitioning to cloud solutions. In the case of Della Hudson, a chartered accountant and consultant, her firm’s software has been in the cloud from the start.
Hudson says after deciding she wanted to take advantage of her children leaving home to become a “digital nomad” to run her business from anywhere in the world, her focus was on finding a solution to “deal with the paperwork”.
She started “by considering all the times we used paper in the business. This involved her team using a “virtual address” where they scan incoming mail – mainly from HMRC – and email a link to clients.
For Becky Glover FMAAT, finance director at Yutree Insurance, the biggest challenge is encouraging external parties to adopt a paperless approach themselves.
Three reasons to go paperless
1
87% of people say they are more likely to purchase from companies who support issues they believe in Source: Cone Communications
2
Productivity can improve up to 30% Source: AIIM market survey
3
UK businesses could save £1.3bn a year by going paperless Source: EY
“We get bank statements, insurance statements and invoices still coming through in the post. Of course, a lot of the work is around changing the mindset of those you work with – more so it’s changing the attitude of external parties and letting them know you don’t want to receive paper in the first place. That can be a challenge with larger organisations like big banks. That’s a drum you have beat to encourage change.”
Choosing the right tools is paramount. Taking post as an example, Mary says “good quality, fast, reliable scanners are going to be key to digitising paper on the way through the door.”
Get buy-in and roll out
However, the journey to a paperless office is not without its challenges. When going paperless, accountants may face resistance from employees who are used to entrenched working practices. Getting employee buy-in is always critical when it comes to any change, and digital transformation is no different.
In a previous role in the finance team of a small wholesale business, Andy Murray MAAT AATQB played a major role in implementing paperless operations.
“We were in the process of moving systems and I was implementing a cloud accounting system, so it was the perfect time to go digital and do them both parallel,” Murray explains.
The company was 15 years old at the time, so there was some nervousness around the size of the task and the adaptation process for some colleagues, he adds.
“We didn’t go back digitise the whole of the historic documents,” he adds, noting that quotes to do so ran into the tens of thousands. “At the new financial year, we drew a line and said anything prior to that point would be paper-bound and archived for audit purposes.”
Six steps to a paperless office
1
Assess current processes
Begin by evaluating existing workflows and identifying paper-intensive tasks. Determine which processes can be digitised and prioritise them based on their impact on efficiency and cost reduction.
2
Invest in document management software
Choose a system that allows for easy storage, retrieval and collaboration on digital documents and complies with industry standards for security and data protection.
3
Employee training
Provide comprehensive training on document management systems, cyber-security best practices, and any other relevant software tools.
4
Establish digital workflow
Transitioning to cloud solutions offers accessibility, scalability and collaboration capabilities.
5
Make a decision
Design processes that minimise paper usage, encourage electronic communication, and leverage digital signatures to eliminate the need for physical documents.
6
Security measures
Prioritise data security by implementing multi-factor authentication, regular security audits, and encryption protocols.
Make it worth it
The main challenge for going paperless, like any business change, is the collective adoption by the whole team.
Mary cautions: “if a business isn’t careful, it could find pockets of replicating the paper files that existed before.”
Indeed, a survey by document management business M-Files found that 83% of workers say they have recreated documents which already existed because they were unable to find them on their corporate network.
Resistance to change often comes from fear of changing a well-known, reliable process. Mary suggests that firms should pick a “tech-positive group” to adopt new technologies, lead the way and refine the process.
“In my experience it’s better to have a pull factor for teams to adopt a new process,” Mary said, adding that key representatives should be involved in the evaluation of software and documenting of systems.”
“Adoption is everything in business process change, and the more that the transition is a team effort, the better the take up,” he says.
Marginal gains from going paperless
James Lizars set up Thrive Accountants in 2012 and the business was paperless from the start, which Lizars says is “central to our value proposition”.
“It wasn’t about paper firstly; it was about the tools and technology that was available. There were clear ways to create efficiencies and processes in tune with the finance function. It was just obvious to me that was the way to do this,” Lizars says.
“If you have a VAT inspection, you don’t want to be pulling a lever arch file out of the loft. The efficiency gain was vast,” he adds.
Electronic document sharing, e-signatures, and secure communication platforms enhance client interactions and eliminate the delays associated with physical document exchange. This not only improves overall client satisfaction but also positions the firm as technologically adept.
“We work with early-stage tech businesses. They would not be that impressed if I asked them for printouts of their bank statements to put into Excel,” Lizars says. “Mastering technology is where the level of service is differentiated.”
Lovewell Blake’s Shaun Mary urges firms to consider the client experience as consumers.
“If you can find a way to do that and help make the communication with their accountants more frictionless, then that’s a real win for retention, profitability, and efficiency,” Mary says. “If they don’t want to deal with paper, then best not to send it out to clients.”
