Lost in Space—Keeping a Lid on Filing Costs
Ever wonder what storing paper documents actually costs? Chances are you haven’t given it much thought. We didn’t much either (until we found out that one four-drawer file cabinet costs about $1,500-$2,100 a year to maintain*).
Turns out maintaining paper files is one of the most expensive (and often overlooked) office costs for manufacturing and distribution companies.
The good news? Paper files are a cost point easily and quickly rectified by a simple electronic archiving system in a good document management software system.
Who knew? (Ahem, ahem!)
Fill ’Er Up (At $25,000 a File)
According to PricewaterhouseCoopers*, there are over 4 trillion paper documents in the U.S. alone, growing at a rate of 22% per year. Where do most of these documents go? That’s right: the ubiquitous file cabinet.
The same report cites that companies spend $25,000 on average to fill up one file cabinet, and an additional $2,100 a year to maintain it, factoring in staff time, materials and office space.
Do the math for your company: how many file cabinets do you maintain? How many dollars are you spending on keeping up with paper?
The 80% Dead-File Factor
Office efficiency expert K.J. McCorry estimates that 50%–70% of most office space is still dedicated to filing and storing documents. Up to 85% of a typical business’s documents are still on paper. Yet 80% of the information is never accessed again—the old 80/20 rule at work.
Excess paper retention is particularly pronounced for manufacturing and distribution companies, who save truckloads in case of legal liability, compliance and to support quality and safety audits.
Studies also show that over 45% of the stored docs are duplicated information. And 45% of office papers could be discarded on the day they were printed.
Bottom line: you’d actually incur less cost storing air.
The Rising Cost of Space
The escalating cost of office space adds insult to injury. Depending on location, office space costs are rising at about 2% annually. Using the average 2% increase, a small business owner leasing 1,500 sq. ft. of office space at $23 a month, will see an increase of $720 for space annually.
Remember, many companies are using half that space for storing paper. A four-drawer filing cabinet takes up about 9 square feet of office space, with an average 15”w x 25”d footprint. If you are in Milwaukee, you’ll pay an average of $15 per square foot, $35 in Chicago and $75 in New York.
We’ve witnessed more than a few companies are actually renting storage units to keep up with the exploding paper storage challenge. We hope you’re not one of them!
Auto-Archiving to the Rescue
This brings us to one of the best reasons to consider document management software: auto-archiving.
Electronic document archiving is a feature of most document management software like our Dash DDX™ system. It automatically pulls your most common documents and files together in one organized central place, and stores them independently from your ERP system.
Documents are instantly captured and categorized; encrypted for security and compressed. You can house up to 1,000,000 documents in as little as 70GB of space—and store them (with backups ) on your own server.
Does document management software make a difference? A lot of our customers think so.
We bumped into a CFO from one of our manufacturing customers at a recent conference. He’s a numbers guy who pays close attention to ROI. The CFO told us his company has been able to do away with all but one of their file cabinets, all because of Dash DDX™ software. He’s not sure what they are going to do with the extra space, but thought it would make a nice area for tables to use during company lunches. (Glad to help!)
The real kicker? His company has cut paper usage and filing by 75% in less than a year using document management software. Interesting how that bottom-line impact aligns with the research.
The moral of the story?
If you’re looking for a simple, effective way to reduce storage space and costs, think outside the box – or better yet, outside the File Cabinet ;)! We can help you paint a clear picture of all of those missed opportunities to save space and money. Call or write us for a free evaluation.
*Stats from the Paperless Project and http://www.informit.com/articles/article.aspx?p=1393497