The following situation might sound familiar to you: you or one of your employees hurry into the office in the morning, turn on the computer, create one invoice after another, print them, put them in envelopes, and even take them to the post office in the evening.
This is still standard procedure at many companies, even in the digital era. But the coronavirus has turned paper-based processes upside down. While employees work from home, important paper documents and other things they need for their jobs are left behind at their offices. And this is just one of many challenges on the way to a paperless office. Read this blog article to learn about a few creative ideas that turned out not to be so brilliant after all and the options that exist especially for small companies to end their paper-heavy processes.
What challenges has the COVID-19 pandemic caused in terms of work processes, e.g., in accounting?
For many office workers, the biggest challenge was definitely the abrupt change. Personally, I have seen friends and family try new approaches to handle this situation. One example was this: while all employees of a company worked from home, one of them went to the office, opened all the mail, scanned invoices, and then e-mailed them to co-workers in the accounting department. It turned out that without pre-allocation to an account, this process wasn’t nearly as useful as planned and it was dismissed quickly. A bigger hiccup happened at another company I know. An employee had asked all suppliers to send their invoices to his home address. Before long, almost tons of food items were delivered to his doorstep because these business partners thought that not only the billing address had changed, but the delivery address as well. Had these companies used Electronic Data Interchange (EDI), this would never have happened.
What business documents can already be exchanged digitally?
Invoices (INVOIC) are just some of many documents that can be digitized. Many EDI users have decided to automate their entire so-called purchase-to-pay process, starting from orders all the way to remittance advices. Among others, this includes order responses (ORDRSP) and despatch advices (DESADV). Generally speaking, all business documents, i.e., including master data (PRICAT – Price Catalogue), can be digitized.
How much money can we save with a paperless office?
The saving potential will depend on the amount of documents, the company size, the internal cost structure, and many other factors. Calculations done for studies, e.g., the one by Billentis, show that compared to paper invoices, invoice issuers will save a total of EUR 6.60 or roughly 60 percent of expenses if they use e-invoices. Similar savings are possible for invoice recipients. And, more importantly, the savings potential goes beyond invoices because all other process steps can be improved as well.
How does this process work in practice if a company does not yet exchange any data electronically?
Ultimately, this is all about connecting one company to others so that they can communicate with each other in a digital format. The first step will be a commercial agreement between companies. Here is a real-life example: let’s assume that a manufacturing company supplies a certain amount of goods to a retailer. These companies will first exchange master data and update them periodically. This is all about product-related information, e.g., article numbers (GTIN/EAN), weights, labeling, nutritional information, and much more. Whenever a retailer places an order, movement data will also be included. Companies could still choose to exchange this information on paper like they did 40 years ago. However, it does not have to be that way because there is the option of creating interfaces between companies’ ERP systems. This electronic process is available for large and small businesses alike.
How many invoices do I need to issue for this to pay off?
Fully automated Electronic Data Interchange usually makes sense if you do business on a regular basis and if there is a substantial document volume. If you only issue five invoices per month, it does not pay off to spend money on interfaces. The benefit-cost ratio should be taken into account. Here is the good news: there are great solutions that allow companies of almost any size to benefit from digitization. A key element will be the willingness to introduce change at the executive level. After all, in this day and age, you just cannot work like you did back in the old days.
