B2B Payments

Why The Paper Deluge Doesn't End With Digitization

With digitization initiatives now fully underway at many organizations, the name of the game, for many firms, is to nix paper.

Physical documents introduce a trove of friction points for the enterprise. Whether that's a lack of security if a piece of paper falls into the wrong hands, or simply the pain of having to manually store a document or capture its data, paper is far from the most efficient way to do business.

That's particularly true for finance teams like accounts payable, accounting or payroll. Yet even with the pandemic highlighting the importance of digitization, paper still sticks around, according to Jesse Wood, CEO of eFileCabinet.

"We're just used to paper reports in our hands," Wood told PYMNTS in an interview.

That being said, even when organizations do make the electronic data shift, these friction points don't magically disappear. According to Woods, organizations and their finance teams must be strategic about how they reduce their reliance on physical paper and invest in the technologies that can optimize document management without adding any extra pain.

A (Digital) Document Deluge

Organizations have long struggled with a "paper deluge." For finance professionals, this could be anything from the time-consuming workflow of printing and cutting paper checks to keeping piles of financial reports on the desk.

But when a business decides to digitize, it's not enough to turn a physical document into a digital one.

"A desktop full of PDFs can be just as frustrating as piles of paper on your actual desk," said Wood. "Bad habits of saving important documents any old place, and assuming you and coworkers can easily find them later, rarely flies in industries where compliance is key."

What's more, PDF documents cannot always support the level of automation organizations pursue as part of their digitization efforts.

Take the electronic invoice, for example. Just because a supplier emails a PDF invoice, rather than mails a physical one, doesn't mean that the buyer can automatically ingest that document.

It's all about metadata, said Wood.

"I would say this metadata inside the document is all you need," but getting access to that information requires manual input," he explained. "So, extracting the metadata so it can be used to move the workflow forward is the biggest challenge."

Technology Plays Catch-Up

Luckily, technology today has grown sophisticated enough to be able to capture digital documents' metadata. For eFileCabinet, that information is used to automatically sort and store electronic documents and prevent the overwhelmingly messy desktop that many professionals have come to endure.

It's vital for the enterprise to embrace technologies that can not only support digitization of paper, but be able to access and make use of those documents' metadata. Still, noted Wood, there is a "hesitation" to shift from paper-based processes because many organizations don't fully understand what their new workflows will look like in a digital world.

"There's a myth that a paperless office means a complete ban on paper," he said. "Rather, it means embracing the idea that a digital environment gives us an opportunity to reinvent the processes we've grown used to."

Integrating financial systems and workflows with document management technology can support automated organization as well as data capture. It's imperative, said Wood, that finance teams embrace automation because without it, the manual processes related to physical paper will stick around even when paper is digitized.

It's also important for organizations within particular industries to understand their unique needs for data digitization and document storage. In addition to certain markets with more strenuous compliance and data storage requirements, Wood pointed to industries like the insurance or accounting spaces that have their own needs.

"Insurance will focus their system on retention and policy governance to meet the strict compliance standards of their industry, while accounting may be focused on organization and file exchange for business and tax preparation records for an efficient tax season," he noted.

Even so, organizations of all types must embrace a strategic document storage strategy as part of their overall digitization efforts.

"Organization is organization," said Wood. "Although someone's organization structure will differ from someone else's, the principles are the same... The goal of increasing operational efficiency is universal."

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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