How to create a paperless accountancy firm: the four steps to becoming truly paperless

The most dangerous and expensive phrase in business is “this is how we've always done it.” As you can imagine, with CV-19 forcing many small accounting firms to move towards virtual working, this phrase has been used a lot in recent weeks. While some firms have figured out how to thrive in this pandemic, many are struggling to transition to a paperless accounting office. There are many who are stubbornly sticking to their old ways. You can probably guess which, out of the three, are being hit the hardest. Regardless of how advanced a firm is, how to go paperless in accounting is a hot topic at the moment!

There has never been such a need to remove the paper from operations before now, so it begs the question: how do you go paperless in accounting? Here is why you should make the change and how to do it in just four steps.

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How do you go paperless in accounting?

Going paperless will benefit your firm now AND way into the post-lockdown future

Before I go into how to create a paperless accounting office, let's look at why you should make the transition. These benefits are essential to know, especially for the doubters and the accountants who are nostalgic about their traditional methods.

So what are the benefits of going paperless?

1. Less waste

The average UK office worker uses approximately 10,000 sheets of paper per year! What’s even more shocking is that 75% of this ends up in landfill (that’s equivalent to a small tree per person!). When more than half of the paper used is eventually thrown away anyway, it makes sense to digitally store and delete these files instead. Not only does this lessen the impact on the environment, but ‘going green’ is one of the sustainable business trends that are shaping the next decade.

2. Increased efficiency and productivity

Lack of organisation makes finding specific documents a long-winded task that accountants just don’t have time for. As well as time, searching for the right piece of paper (just like a needle in a haystack) can also significantly affect focus too. When you have a digital document archive with a powerful search function, you can store, access, send, receive, and find all the documents that you need easily and quickly. To put it simply, paperless work saves a lot of time and greatly improves staff productivity as it eliminates a lot of time-wasting steps (e.g. printing, filing, manually searching and retrieving etc).

3. Saves money

The cost of paper, ink, printers, even storage, can be significant, even for a small firm. In fact, reduce.org reports that the cost of using paper in your office can range from 13-31 times the cost of the paper itself! When you think about storage alone, you can see why this is the case. For example, a standard four-drawer cabinet can hold up to 20,000 sheets of paper. On average, that amount of paper would cost roughly £19,000 to buy and the cabinet would cost approximately £1,500 to maintain yearly. The cost doesn’t end here either. Typically, up to 25% of a firm’s office space is used to store paper documents. That’s a massive overhead and one that is preventing firms from using the valuable square feet that they are paying for to take on more staff.

4. Ensures that you remain competitive

Going paperless will ensure that you remain competitive and up-to-date. For example, imagine you're have a meeting and you’re referencing a file that you don’t have with you.  You can just log in to the cloud and instantly pull up the file that you need. Not only will this make the meeting run more smoothly, but it will boost your firm’s professional image too. Younger generations are tech-savvy so by not making the switch to paperless, you risk looking out of touch to a whole generation of clients.

5. Increased security

Many accountancy firms refuse to make the switch. They are worried that going paperless may open the gate for cyber hackers. While having these doubts is completely reasonable, remember that storing documents electronically also opens the door to electronic backup, encryption and offsite replication.  This type of data resilience that simply isn’t possible with paper files. Did you know that 20% of print jobs are never retrieved from office printers? Many of these same offices don’t have paper shredders or a secure document disposal process in place! Many firms already have security issues with storing their sensitive data in paper files (without realising). With cloud storage, documents can be encrypted and protected by numerous layers of security and restrict access where needed. You just need to remember to employ best practice such as regular password changes and two-factor authentication.

To get through lockdown and the transition to whatever lies ahead, accounting firms will need to become paperless; the benefits of which will allow them to save money, work more securely and efficiently, and adapt to the market and remain competitive. While all of these will benefit your firm in the short term, they are also essential to grow sustainably in the future (which is the ultimate goal!).

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Four steps to creating a paperless accounting office

How do you go paperless in accounting? Now you know the main benefits of going paperless, here’s how to create a paperless accounting office in 4 steps:

Step 1: Start small, know and explain your why

Right now, going paperless seems like an obvious step to take. However, if you are successfully going to move to be a paperless office, you need to first know your why. Why are you taking this step? What purpose does it fulfil and how will it help you, your firm and your clients? Without having done this thinking you risk the project not quite getting there and compromises being made along the way. Marion Thomson, who heads up XU Academy and runs her own small accountancy firm, realised in 2012 that if she could eliminate paper, she wouldn’t need an office. This was her ‘why' alongside being very stubborn and wanting to prove that it could be done.

Don’t just announce that the firm is going paperless, clearly explain your reasoning. If your employees know why the change is being made, they are much more likely to be fully on board with the project.

Start your transition to a paperless office with small changes or one process at a time. Look at all your paper-based processes and pinpoint one that you can most easily digitise. Perhaps office receipts and bills; not too daunting but would make a massive impact. Alex Kipp, Head of Cloud at Galloways Accounting, suggests looking at the gateways first, i.e. what paperwork is going in and out of the building?

Once you know where you’re going to eliminate paper, next is to think about what software you’re going to use to help. Remember, “people must come first in the strategy and thinking,” says Finance Director, Andrew Coulson. “It has to make their job easier, not just going paperless for the sake of being “hip to be digital.” Think people first, process second, technology third.”

You also need to engage with your clients and suppliers. As Chris Gregg, founder and CEO of Lightyear said: “97% of Lightyear docs come directly from a supplier. It’s amazing how many people go searching for a paperless office to manage their scanned documents."

As well as talking to your suppliers about how you want them to work with you, it’s time to challenge them on how they do things. Can they really not send digital documents? After all, how did they actually print them out in the first place?

You also need to look out for clients, team members, or suppliers who may have conflicts of interest. Gareth Burton, founder of Progress UK, found his IT provider was initially against going paperless (they had a server room to justify in their fees). Perhaps a team member is worried that if the firm no longer sends out physical letters to clients, they may not have a job.

Step 2: Select the right software

While there are many free apps and tools to help digitise paper-based processes, it’s important to think beyond just making a job easier. What we mean by this is, what software will not only help your office go paperless but will scale with your firm too? When choosing your software, ask yourself these following questions:

• Does it replace or improve an existing process?
• How will it integrate with our accounting system?
• What do existing users say about it?
• Does it have excellent technical support?
• How will it scale with my business needs (e.g. as I become completely paperless, will it support thousands of documents every month)?
• What’s the cost of the software?

If you answer all of the above before choosing your software/hardware, you can be a lot more confident that the changes you are making are for the better and for the long term.

As Steph Merrill, owner of SAS Accounting Solutions found, software subscriptions need to be offset against the saving in paper and equipment costs.

Read: Best software for going paperless: creating your home-based cloud-accounting firm