3 Signs Your Business Has Outgrown Its Current Document Storage Setup
Paper-based document storage has a ceiling. Lots of organizations start enjoying the benefits of electronic document storage long before they completely lose patience with paper. But for some, the breaking point isn’t obvious. Here are 3 signs that you’ve probably hit it.
Sign 1: Your team spends too much time just finding things
This is the most common friction point, and also the easiest to dismiss. An employee spends three minutes hunting for a contract. Another ten looking for an invoice from two quarters ago. It feels minor in isolation. Multiply it across your entire team, across every working day, and it stops being minor fast.
Organizations lose an average of 1 in 20 paper documents, and spend approximately $120 in labor searching for every misfiled document (PricewaterhouseCoopers). That’s not a rounding error. That’s a real drain on payroll, and it only gets worse as document volume grows.
The problem isn’t that your staff is disorganized. Physical filing cabinets have real structural limits. There’s no search bar on a drawer. You can’t cross-reference a client name with a date range and pull a result in seconds. When a business grows, the filing system that worked fine at 20 employees starts buckling at 60. The time your team loses to document retrieval is time that isn’t going toward actual work.
A proper document management system – one built around digitized files with metadata tagging – means a searchable archive where any document can be pulled up in seconds. That only works if your files are digital to begin with.
Sign 2: You’re paying for space that documents are occupying
Office square footage costs money. And depending on your location, it might cost a whole lot of money. If a meaningful portion of that space is taken up by multiple filing cabinets, storage rooms full of banker boxes, or an off-site facility you’re paying monthly fees to maintain, that’s an operational cost hiding in plain sight.
An off-site climate-controlled storage facility sounds like a good idea until you do the math on the annual spend. Factor in the time and labor costs associated with retrieving documents on a regular basis – especially when the original documents need to be returned for further use – and most organizations simply can’t afford not to outsource their scanning projects.
And reclaiming that space isn’t the only benefit. Most businesses are shocked to learn that the longtime unseen expenses associated with paper (printing, copying, shipping, filing, storage) come close to or might even exceed the cost of working with document scanning companies near me to get everything converted.
Sign 3: Paper files are a compliance and security liability
This aspect is often underestimated until something actually goes wrong. A physical paper in a filing cabinet can be accessed by anyone. There is no way to know who has seen it, no protection mechanism such as encryption, and if necessary, you cannot revoke access remotely if an employee is no longer with the company. If a whole folder with paper documents is lost, or becomes a victim of a fire, flood, or burglary, the information in it is gone.
Companies in regulated industries, especially the healthcare sector, are particularly vulnerable here. Paper documentation significantly and unnecessarily complicates the ability to prove that you are compliant with regulations associated with protecting the privacy and security of patient information. At the same time, regulators expect an audit trail of who has accessed which records – physically impossible if you store everything in a filing cabinet. But this is not strictly associated with healthcare. Every single company that has formalized, financial, and customer contracts is obliged to have a document-retention strategy, and having a physical archive instead makes it harder to adhere to the obligations, but easier to break them.
Digital files properly managed can have controlled access, tracked version history, and serve as an audit log showing you who used the document and when. If you have an offsite backup, a flooded file room will not become a total information loss.
What digitizing documents actually involves
This is important to share because many businesses go through the cycle of attempting a conversion in-house, hitting the same roadblocks, and then abandoning the effort until later when the problem is even bigger. We’re talking about backlogs of tens of thousands of documents, which isn’t unusual. Whether the archives are stored on-site, at a records center, or in a self-storage unit, the rule is these archives double every two to four years.
At that accumulation rate, which holds pretty steady across industries, the box you pull today to find an invoice, contract, or personnel file will contain two to three times as many documents as the box you pulled in 2015. The next box you pull will contain twice as many documents as this year’s box – and so on. That’s a compounding growth rate.
The good news, which isn’t intuitive until you think it through, is that converting physical archives gets more expensive and difficult if you put it off. Each year represents a bigger volume, more cost and risk in storing the documents, and higher cost in retrieving documents when needed.
When the friction becomes the signal
These signs don’t hit you all at once. Retrieval slowdowns seep in slowly. Storage costs increase a line item at a time. Compliance risk piles up unnoticed. By the time the pain is acute, the business has typically been suffering the cost for far longer than it’s known. That’s the real case for addressing it sooner rather than later.
