Paperless payroll fuels more efficient AP processes

April 19th, 2013 | Posted by Kevin Corley in Business Process Automation | Document Management

Payroll processes have been traditionally paper-heavy and labor-intensive, hindering a business' productivity and driving unnecessary costs. Further, a paper-based payroll system often results in errors, which can cause additional damage to both capital management and the firm's reputation. However, organizations can deploy electronic document management systems to facilitate business process automation and allow for more accurate, timely payments.

Environmental Leader reported that for a company with weekly payroll and only 10 employees, printing checks and reports and delivering them via envelope requires more than 58 pounds of paper every year, according to Payroll On A Budget research. Additionally, the research firm found that the environmental cost to produce, process and dispose of this paper amounts to 48 pounds of carbon gas and more than 2,080 gallons of water. The costs of paper, checks, toner, postage and other necessary supplies amounts to an average of $500. And that's not considering travel expenses – the company found that driving just five miles to the bank every week to cash and deposit checks can add up to 2,600 miles per year, more than 1.3 metric tons of carbon dioxide emissions and $500 in gasoline, according to Environmental Leader.

Still, the news provider reported that U.S. Department of Labor figures show paper use has increased more than six-fold over the last 50 years, contributing to the aforementioned consequences of harmful gas production and unnecessary costs. Additionally, Charles Read, president of Payroll On A Budget, told the source that a digital system is not only more environmentally-friendly, but more secure because the technology can aid in detecting and preventing fraud.

Minimizing time and mistakes
One organization that has opted for a paperless payroll system is the University of Houston, The Daily Cougar reported. The news source revealed that The Lean Six Sigma project team aided in the rollout of a new electronic system later this year to reduce errors and improve time reporting for biweekly employees. Joan Nelson, executive director of HR for the school, told The Daily Cougar that the transition was part of an overall effort to improve efficiency and minimize variability in business processes.

With the new system, payroll processing errors have decreased from 10.35 percent to 6.77 percent, and payroll cycles were cut in half, according to The Daily Cougar.

A digital document management solution has the power to transform any business' payroll system by automating, error-checking, routing and securing every step of the process, all while reducing the firm's spending and dependency on resources.

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