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Going Paperless in Finance

Posted on August 8, 2012 by

Clayton & Mckervey

Clayton & McKervey

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Whether the initiative is founded on improving efficiencies, cost savings, or going green, transforming to a paperless finance department is a significant undertaking. At the June 7 CFO/Controller Roundtable, many considerations, including planning for the transition, realistic expectations for ROI, and best practices were discussed in detail.

A quick show of hands revealed that most participants are in various stages of going paperless, but only two or three individuals characterized themselves as being far along in the transition.


Software selection is based on any number of considerations. Where do you begin? Step back and get a 30,000 foot view of the data to be stored. Attendees suggested asking the following questions:

  • Do you want the stored data to be accessible by more than one person at a time?
  • Can you sort through the documents and categorize with a system that best serves the company’s needs?
  • What internal processes can you put in place for the filing system and naming conventions? Is there an indexed filing method that can apply? What software brings an indexing system?
  • Can you sort data into buckets such as medical data, financial data, HR information, client or customer files, tax information, engineering documentation, or purchase orders?
  • Once the data is in buckets, what software can read the data fields that apply such as phone, invoice, or customer number?

There are any number of software packages to consider. Word Dox is being used by one attendee. This software is helpful to them because it allows them to index by client or key search terms. Special hardware was not required and the cost per license is $500.

Data Input

Once these and other factors are considered, scanning can be done internally with administrative staff, interns, or by a third party provider. The challenge is where to begin – with prospective data, historic data, or some combination of both.

Purge Cycle

What should the storage life of specific data be? Does the seven year retention rule apply across the board for purging files, or would certain data be considered permanent files while others can be purged on a scheduled basis? Storage of electronic files is inexpensive, but the time required to back up data can be longer if this decision is not made up front. While there are government and internal standards to adhere to, the best policy is to check with your attorney to get the legal perspective. Also think about it from a business perspective. Is there legacy information, such as incorporation papers, that should be segregated out and not part of the back-up system? In this situation, retention would be limitless.


Backing up data on a regular basis is the most commonly accepted form of insurance used. However, it is worth considering insurance against lost data. What if the organization storing the data goes out of business or is acquired. What are the legal ramifications of stored data being part of a company merger, acquisition, or sale?


Hardware selection depends on how you want to use the data. Do you want to store the data or access the data?
Do you want to change the access? How often do you want access, and how many people will need to have access simultaneously? Options may include removable and/or portable disc drives to back up servers, setting up a private cloud environment, or using a special server for permanent documents.

Resistance to Change

How do you manage resistance to change for those that prefer paper? In specific fields, regulatory compliance may make going paperless mandatory. In an unregulated environment, one suggestion was to set a deadline where forms and options to keep paper would no longer be available. Another attendee noted that once their colleagues changed over to paperless, they will never go back. It is critical that the change is for all and must be accepted from the top down; one exception will sabotage the success.

Tips to Ease the Transition

One attendee found that providing multiple monitors helped to ease the process internally. Another noted they added a notice to all customer faxed order confirmations that future orders should be placed electronically. Other suggestions included talking to your customers, vendors, trade groups, payroll service providers, and other service providers to get suggestions on ways they have implemented paperless procedures, as well as ways they can help with software or other recommendations. Image Soft was a program suggested that may be helpful.

Return on Investment

While there may be some fallacies in how the return on investment of going paperless is calculated, there are many hard and soft benefits. Those brought up by attendees included:

  • Buying less paper, banker boxes, and storage equipment
  • Better use of physical space previously used for paper storage (i.e. less square footage needed for storage)
  • Reducing costs of carrier services such as FedEx, UPS, or Priority Mail
  • Productivity is improved when files can be used by more than one person at a time and are not as easily misplaced
  • Back up and security of data seems to be more assured when traditional or cloud back up is used
  • Peace of mind

Converting to paperless is a huge, time consuming transition. Before and during the conversion, having a plan to handle future documentation that will be added is important. The closing thought on how to handle future paper documentation was to do everything you can to stop paper from coming in.

Sharing Paperless Data 

Once the conversion to paperless is underway, information will be more readily shared. There are many options for sharing including these being used by attendees:

An attendee has had success using Drop Box and described his use as an “electronic briefcase.” Client data can leave the office temporarily, be stored in DropBox, and then removed later. Security is a benefit to this attendee as a link to a document in Drop Box allows for data access in secure off-site storage.

Alternates to DropBox brought up by attendees are, which is being used by huge corporations, Google Drive, and IDrive. The advantage to some of these are free trials for 5G of storage per email address, while others may allow more sharing options or provide indexing tools and real time usage.

Microsoft Office 365, hosted in the cloud, is being used extensively by another attendee who describes it as seamless. This software brings together online office collaboration for email, sharing files and documents, web conferencing, and other uses.

Sharepoint, a Microsoft web-based collaboration software, is also being used by an attendee for content management, search, and sharing for intranet and internet sites.

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