How much does it cost your company to find a lost document? According to a study done by PriceWaterhouseCoopers, it costs an average of $122 to locate a misplaced document.
That doesn’t sound to bad, until you learn that the same study estimates that 7.5% of all a company’s documents are lost forever (not to mention those that are lost, searched for, then found). A three-drawer filing cabinet (about the smallest available) holds approximately 9,000 documents. Even small companies have at least one three-drawer filing cabinet. Many businesses have many more. But if 7.5% of the documents in that small cabinet were lost, it would cost the company $82,350 dollars.
While it sounds incredible, few businesses, if any, fully appreciate the cost of storing and managing paper documents on-site.
3 Cost Impacts of Storing & Managing Document In-house:
1. Facility Costs
Let’s get back to that small 3-drawer cabinet. Including the space it takes to open the drawers and access the files, the cabinet occupies about 20 sq. ft. of floor space. If you have a few of these, in a relatively small storage space, including the costs to heat and light the area, the PWC study estimates a total cost to fill one cabinet of $25,000 and $2,100 a year to maintain it.
2. Labour Costs
It’s been estimated that an office employee spends 20% of his or her time searching for and refiling paper documents. Again, forgetting the costs of finding lost or misfiled documents, and using an average cost of $40,000 a year in salary, benefits and other employee costs, a business of 20 employees would lose $160,000 in productivity every year.
3. Materials Costs
Of course paper costs money, so does shredding and recycling it. But to drive home the extent of the cost, PWC estimated that the average document is copied 19 times throughout its life-cycle. That means 711,000 copies from the 9,000 documents in the 3-drawer file cabinet. And don’t forget toner and maintenance cost on your copy machines – and the salary costs of having an employee take the document to the photocopier, wait for it to be copied and return to what he or she was doing.
Whether or not the PWC study is accurate, it serves to underline that paper document management costs your company far more than you think. Here’s one last image to help get the point across. Imagine how many digital documents you can store of a computer hard drive the size of a 3-drawer file cabinet!! And you’d never lose a sheet.