Managing mountains of paperwork manually might seem harmless, but it’s a money drain in more ways than one. The costs— in money, time, and effort—are too high, and the inefficiencies can hurt a company’s bottom line. Thankfully, AI and document digitization offer a smarter, cost-effective solution. In this blog, we’ll break down how digitizing your documents with AI can save you serious cost and boost efficiency.
The Hidden Cost of Manual Document Handling
While the piles of paper aren’t that expensive, the hidden costs of managing them could be as much as 31 times the cost of paper! Think about it: storage space, filing cabinets, endless hours spent searching for the right document, and the inevitable human errors—these all add up leading to a significant financial burden on any organisation. In a manual paper-based system of document management, statistics show that it costs $20 to file a document, $220 to recreate a document and $120 to retrieve one on average. A study by Connected Technology revealed that the cost of searching for a misfiled document is about $120 while the cost of recreating lost documents is $250. According to a Xerox report, 46% of workers at small to midsize businesses waste time on inefficient paper processes every day.
Picture a scenario where you need to relocate your business and shift heaps of paper documents filed over the years. Can you imagine the amount of misplaced documents that would be?
Based on a research, around 7.5% of paper documents are estimated to go missing with, 83% of employees having to recreate missing documents resulting in wasted time and effort. It has been found that employees can lose up to 25% of their productivity due to document problems.
On top of that, maintaining physical records costs money in terms of storage, security, and even compliance. Losing a file can lead to major security threats as well as the potential for legal actions (read GDPR fines). It’s no surprise that companies are turning to digital solutions to streamline this process.
Cutting Down Operational Costs with AI: A Game-Changer for Document Management
From the above statistics, you can clearly see the many hidden operational costs of handling endless stacks of paper documents manually.
Luckily, automation reduces the amount of manual data entry work by 80%. With AI-powered document intelligence, manual processes like data extraction, categorization, and even validation are automated. Plus, AI doesn’t just automate; it optimizes. Paperless record management system have been shown to cut down the time of file processing by roughly 4 days. This is a tremendous step forward when it comes to saving time.
Did you know that for every $1 spent on printing paper documents, another $6 is spent on distribution? Additionally, around $480 billion was invested in paper records manager salaries in recent years. These costs add up throughout the year with the estimated annual cost for handling paper documents without a file. Looking at these astonishing numbers, the potential money savings of going paperless is huge! This money can be used for more productive purposes as well as reinvesting into the company or employees.
Through machine learning (ML) algorithms, these AI systems learn from past actions to make even smarter decisions over time, continuously improving efficiency.
Manual vs. Digital: Uncovering the ROI of Document Management
When comparing digital document processes to manual handling, the return on investment (ROI) becomes clear almost immediately.
Document digitization technology enables cost and time savings while boosting data capture accuracy for organizations. Thanks to faster processing times, lower storage expenses, and improved data accuracy, an organization can save around 50-80% in costs and 60-90% in processing time per document! A study by Forrester also estimates that AI can reduce the cost of document digitization by 50%. Moreover, the speed of digital workflows accelerates decision-making and productivity, enhancing both financial performance and long-term savings.
Building a Framework for Success
To ensure the transition from manual to AI-enabled digitization is seamless, here’s a simple framework to follow. This framework ensures a structured approach to digitization, allowing businesses to maximize the benefits of AI-driven document management.
- Assess Current Costs: Understand the costs of your current manual processes—labor, storage, error correction, etc.
- Identify Key Documents: Focus on the documents that consume the most time and resources (invoices, contracts, legal forms).
- Select the Right AI Tools: Look for AI-powered document intelligence solutions that fit your industry and document types.
- Pilot the Transition: Start small i.e. pilot your AI solution with a single department before scaling up.
- Monitor and Optimize: Regularly review the efficiency of the system and allow the AI to learn and improve.
Felix Solutions takes a proactive approach to reducing operational costs by providing AI-powered document intelligence solutions that streamline and automate workflows. By leveraging advanced technologies like AI, ML, and NLP, Felix extracts data from unstructured documents with 99% accuracy, eliminating manual processing and reducing errors. Our patented solutions are designed to optimize key processes like invoicing, contract management, and healthcare claims processing, allowing businesses to improve efficiency and enhance overall customer experience while strengthening the bottom line.
Conclusion
As this blog details, a robust AI-powered document digitization system will increase your bottom line by cutting down operational costs significantly. At the end of the day, that’s where the real growth happens.
Are you ready to update your document management software?
Talk to us today.