Many of our clients at Modern Image are scanning their documents so they don’t have to rent space to store paper onsite. Storage can be expensive, especially when you are renting space in our service areas of Washington DC, Northern Virginia, suburban Maryland, or Atlanta. The higher your rent, the larger your return on investment in scanning.
While it’s hard for people to visualize how they can do their job without their precious paper file in the filing cabinet down the hall, once we take a close look at how paper is used, we can often find a way to operate with a digital copy of the paper instead. These are simple tips for evaluating ROI.
1) Complete an inventory of documents across all departments. Meet with department heads to learn how paper documents are used. Since your clerks are the ones who work with the documents all day, it’s a great idea to meet with them to see if they have ideas about creating a more efficient process.
2) Identify documents that can be immediately purged via shredding. These documents are typically files that have outlived their usefulness, and have exceeded the legal time limit that government regulations require you to keep them. For example, certain financial records only need to be kept for 7 years. These files should be shredded instead of scanned.
3) Identify important documents that occupy a large amount of storage that could be scanned. Typically, these include personnel files for active employees and retirees, and accounting records (AP, AR, vendor files, checks, ledgers, and expense reports).
4) Identify other categories of documents that can be scanned. These include legal records, contracts, project documents, marketing files, trade show materials, journals, board meeting minutes, and executive records.
5) Determine the total amount of storage, in square feet, of the paper files identified above. Measure the file cabinets and the space required around the cabinets to open the drawers. Measure your current file room. Once you have the number of square feet, multiply that by the rent in your new office. Generally, it will take 1-3 years to receive your complete return on investment for scanning, simply from rent savings. Sometimes the ROI can be achieved in less than 1 year.
The soft cost savings can also be significant. I’ll write in a future blog on how to calculate soft dollar savings; however the list below gives you an idea of where those savings are found.
1) Eliminate the walk to the file cabinet to file documents, pull documents, and re-file documents.
2) Eliminate lost or misfiled documents. In a medical practice, a lost medical record can trigger a large fine. A misfiled financial record can trigger a multi-day effort by an entire department to find the important file.
3) Reduce or reassign employees who spend their day filing documents.
Further, once your documents have been scanned, they can be stored in a document management system which can add further efficiency to your business processes.
If you need help with this analysis, complete the contact form on the right and we will help you understand what your return on investment can be.