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Unit 2, 10 Kam Close
Morisset Industrial Park NSW 2264,
Australia

49705842

All-weather labels, tags and signage. 
Water-proof. Long-lasting.

The Paperless Office… start with the financials!

Green Geek

Dr Joseph Sweeney has a long history in horticultural labelling, barcode and supply chain management.  He has worked extensively with both public and private sector organisations on a broad range of technology initiatives, including electronic document interchange (EDI), the Greater China region’s adoption of EAN barcodes and product identification numbers, e-commerce, software design and project management.

Since working on the development of TyTags’ initial labelling solutions more than 30 years ago, Joseph has been actively involved in supply chain management issues throughout the Asia Pacific and Australasian region.  Most recently, he spearheaded the development of Australia’s first just-in-time colour digital labelling solution for horticulture and environmental uses.

Better known in horticultural circles as the Green Geek, Joseph writes a monthly article published in Hort Journal Australia  identifying and demystifying  IT from the perspective of growers and nursery managers.

In addition to his role within the family business, Joseph is also an advisor with Intelligent Business Research Services, the largest independent Australian technology advisory and research firm. At IBRS, he guides clients in the planning, selection and deployment of new technologies.

 

The Paperless Office… start with the financials!

Kascha Sweeney

For years, we’ve been told that the ‘paperless office’ is just around the corner. Just like the flying car and my personal favorite, the hoverboard. The reality is that Australian small businesses are still tied up in paperwork: invoices, receipts, bills, bank statements correspondence, payslips, drawings, plans, manuals, reports… not to mention a constant stream of government forms!  At time it feels like a non-stop avalanche of paper!

While it may look cheap, all this paper hides very significant costs. The production and processing of paper documents averaged out to about 27 to 50cents per sheet.  That includes labor and materials, but not filing and storage.  The cost of finding and retrieving a piece of paper from filing averages around $5! When examined closely, the use of paper demands a lot of labor around organising and retrieving documents, and re-entry of information. It is the hidden costs associated with that labor that makes paper so expense.

When you view the cost of paper from the above perspective - as a labor issue - then you begin to quickly see that a paperless office could be attractive. It’s not about less clutter. It’s about getting people to focus on work outcomes, and getting them the information they need right away… not paper pushing.

The above insight may seem a little theoretical, but it is important for a small business owner because it focuses attention on identifying the right activities and technology investments. One of the of the first areas you should look at is… receipt, storage and retrieval of financial records.

This is a big issue for all small businesses. For taxation purposes, we need to keep receipts, banks statements, invoices, and other transactional documents for an extended period to comply with taxation regulations.   Sure our accounting systems are up-to-date (right?) but we still need to be able to produce the paperwork for our accountants and the ATO.

In Australia, you only need to keep digital copies of your financial records: not the paper itself. By creating a policy where all financial records are stored electronically, you gain several benefits: no physical space taken up in the office; you can share copies of the records with your accountants or the ATO with a simple mouse-click, you can find information quickly from your keyboard or even phone, rather than rattling around in filing cabinets.

These days, a lot of suppliers and financial institutions will give you the option of receiving bills, statements and receipts electronically. Contact your suppliers and banks (when you next deal with them) and request digital, not paper correspondence. Most of these organisations will email you the financial records from that point on.

In addition, Australia Post has an excellent ‘digital postbox’ service which can help streamline the move to digital records. Talk to the staff at your local post office or visit https://digitalmailbox.auspost.com.au/ for more information.

Unfortunately, not businesses are capable or willing to send you digital paperwork. So for the rest of the paper that comes in, consider using a scanner to make digital copies, then dispose of the original paper.  Scanners are relatively inexpensive these days. I’d recommend getting one with both a ‘flatbed’ scanner and a ‘sheet feeder’ (which is great for scanning in multiple pages of a statement, warranties or similar documents).  Personally, I use a “Multi-Function Centre” which combines a fax, phone and printer, with a scanner and sheet feeder. It acts as a photocopier too (which I never use.)  

You'll also want special software to scan and organise your documents. The longtime champion in this space is PaperPort, by Nuance.  PaperPort lets you  quickly convert your paper documentation digital PDF files and stores them into folders on your computer.A very good feature in the latest addition of PaperPort is that it can recognise the text from the documents being scanned, and add this to the PDF. This means that your files will be easy to find in the future using a simple text search. It is available for both Mac and PC, so it should fit right into any business. PaperPort looks to be about $400, but nuance often sells the software “on special” for about $99, including a PDF creator and reader and a powerful scan-to-text tool called OmniPage.

While PaperPort is great for scanning in documents you get in the office, there are also plenty of scraps of paper you collect on the road: namely expense receipts. In fact, handling expenses is one of the biggest bugbears for small businesses owners. It is vital that we keep accurate records, yet we often lose those pieces of paper while simply getting on with the job. The saviour here is to use your mobile phone to take a snapshot of your receipts. Some online accounting programs (such as NetSuite) allow you to take a snapshot of your receipt using your phone’s camera and will place the receipt directly into your accounting program! However, if you’re still using an offline accounting solutions (such as MYOB), you can take a snapshot of your receipt and store it to Google or dropbox on your phone. When get back to the office the image will automatically be synchronised for your office systems. There are even services now that automate the entire process of expense tracking with a mobile phone: one popular service is the aptly named Shoebox.

As you can see, it is very easy to do away with paper for almost all financial records. However, you still need to organise all of these digital files.  this is unbelievably easy with modern computers. You simply create a folder of your financial records, and then within that folder creates subfolders that match your existing paper-based filing system. In my case I have folders for my game publishing business, a folder for my IBRS consulting, and a folder for my property investments. Within each of these folders I create subfolders by financial reporting quarter: for example January–February 2016. and within that folder I then create an income and outgoings folder, and another for all the miscellaneous documentation, including bank and credit card statements. This means I can clearly identify the invoices I’ve sent, versus the bills and receipts. See figure 1

Figure 1: Sample Structure for Digital Financial Records

Financial Records

  • IBRS Consulting
  • 2016 Jan-Feb
  • Incoming
  • Outgoing
  • Statements Misc

This filing system matches how I work: I access my financial records quarterly, when I am doing my BAS statements.  PaperPort also does a good job of showing this type of structure graphically, so I can scan documents directly into the correct folder. In addition, any invoice or bill that I get via email is saved into the correct folder in my filing system. This is so that all of my records are located in one place, making searching for them very quick. Remember, the reason why we’re going paperless is to reduce the cost of labour associated with finding and working with paper.

Of course, every business is different. I encourage you to develop your own filing system that best suits the way that you work.

One of the problems with paper is that it is the only copy you have of the transaction. If you lose your paper records, you can get in big trouble with the ATO. Having digital records has a similar problem: if you only have one copy of the records and there is a technical failure, you can lose a lot of vital information!

It is therefore imperative that you consider how to backup your financial records. This is something that you cannot do with paper!

The ATO has great advice:

Documents that you are required to keep can be in written or electronic form. If you make paper or electronic copies they must be a true and clear reproduction of the original. We recommend that if you store your records electronically you make a backup copy to ensure the evidence is easily accessible if the original becomes inaccessible or unreadable – for example, where a hard drive is corrupted.

I’ve written several articles about how to backup, and all of that advice is applicable to your paperless office files. And with a little bit of foresight you can also turn the backup of your digital financial records to a benefit for your bookkeeping and accounting processes. A simple way to do this is to place your financial records folder into Dropbox or Google. Whenever you add a new document into the appropriate folder, it will automatically be synchronised to the cloud. You can then give your bookkeeper and accountant view-only access to these folders via their own Google or Dropbox accounts. This is just a point-and-click operation. From that point on your bookkeeper and accountant will have your most up-to-date financial information at all times. In addition, should you be audited by the ATO, you can simply share your financial folders to the auditor and your job is done. How easy is that?! No more stuffing shoeboxes with paper and hoping everything is available.

If your bookkeeper comes into the office periodically, the above approach, combined with an online accounting solution, means that they can work from home at a time that suits them. It also means you can shop around for a bookkeeper more easily. Furthermore, your documents are very easy to search, so the time needed for your accountant or bookkeeper to work on the accounts is greatly reduced. That can save you a lot of dollars in service fees.

Unfortunately, if your location has a poor network connection, file synchronisation tools like dropbox and Google can be problematic. We have this problem at TyTags, while we wait for the NBN to arrive.  In this situation, I recommend using an application such as CrashPlan, which can schedule backups overnight.

In conclusion, moving towards the paperless office has many benefits. While it still may be a long time before we genuinely get rid of all paper, we can certainly get rid of the paper that requires the most labour – and that’s financial records! So this year, make it a goal to go digital and see how much paper you can get rid of… while improving the bottom line of your business!