We’ve all seen the effect of paper-based processes before: mounds of receipts scattered around the office, loitering on desks until someone remembers they need to be stashed in an already full filing cabinet. Going paperless sounded like an unachievable concept just a few years ago, but it’s now becoming the standard for most organisations that want to avoid the hassle of handling paper. And thanks to the latest technology advancements, it’s only getting easier to conquer.
As more countries adopt specific requirements and regulations that allow companies to switch to fully digital systems, more organisations are transitioning from paper-based systems and going paperless. And while adopting a fully digitised system can bring multiple benefits to most teams within a company, it becomes especially important for Finance, which manages the employees’ expenses daily.
Finance teams navigate a treacherous landscape, with regulatory scrutiny intensifying as new and ever-evolving compliance requirements emerge. Compliance has become a hot topic, alongside finance fraud and audits, creating a dual challenge: ensuring adherence to these regulations while maintaining efficient financial operations. While going paperless isn’t a magical solution, it offers significant advantages that empower finance teams to stay ahead of compliance demands and maintain operational efficiency.
What does going paperless mean?
The concept of going paperless was recently introduced in the corporate world, but organisations quickly became acquainted with it.
Simply put, going paperless means significantly reducing — or completely eliminating — the use of physical copies of documents in a business context, exchanging printed pages for digital documents, especially in internal processes. For Finance teams, this translates into switching from saving endless mounds of paper invoices, receipts, tax returns and other documents to fully digitised copies.
Why are companies going paperless?
It has taken organisations a while to truly see the benefits of going paperless. Historically, finance has always been a paper-based team, and with various countries around the world imposing regulations that require organisations to keep a physical copy of documents in case of audit, the transition became a challenge.
But as the world evolved and digitisation happened in different areas of the corporate world, the time came for finance teams to modernise their systems. Soon after, governments worldwide started to adjust their regulations so businesses could transition to a modernised and digitised world.
While most traditional organisations believed paper expenses to be the most trustworthy solution, the reality often led to risks such as loss and misplaced or damaged receipts, which could impose a real problem in case of an audit. Keeping digital copies, however, provides a seamless, quick and efficient way for employees to submit their expenses as soon as they get their invoices while reducing the risk of errors and improving transparency.
This approach is also an environmentally conscious decision, as secure and centralised cloud storage solutions replace physical copies. As statistics indicate , an average office worker uses around 10 000 sheets of paper a year, with over 68 million trees being cut down to produce paper-based products, so choosing a more sustainable approach to paper is crucial. By reducing the reliance on paper, companies can significantly lessen their environmental footprint, contributing to conserving valuable resources and achieving a more sustainable future.
As the world evolved and digitisation happened in different areas of the corporate world, the time came for finance teams to modernise their systems.
Does this mean all paper has been fully eliminated from expense management processes? Not quite, as some countries like Sweden still require paper copies to be stored for four years. But legislation keeps changing, and more countries have introduced certifications that grant companies the possibility of having full paperless expense management. In the United Kingdom, for instance, records of employee spending need to be kept for three years, but organisations are allowed to store digital copies within their expense management software as long as they provide all the details required by law.
Achieving the perfect balance: a fully compliant paperless process
Transitioning to a paperless environment brings multiple advantages, but Finance teams still need to navigate the ever-present need for compliance. Regulations keep changing, and a simple misstep can pose great risks for organisations, leading to greater costs that can impact the overall health of a business and even tarnish its reputation.
As regulations keep changing, it’s crucial for businesses to keep track of all the latest updates on record retention and electronic storage. By understanding these regulations, organisations can determine the appropriate formats and storage solutions for their documents, ensuring they’re valid and acceptable in case of an audit or other legal proceedings.
Choosing the right tools is key to achieving a seamless and efficient paperless system. When choosing an expense management software, it’s crucial to ensure it keeps the full lifecycle of the document, from its creation and modifications to approval and archiving. This detailed record-keeping allows for efficient information retrieval during audits or investigations, demonstrating adherence to regulatory requirements.
As regulations keep changing, it’s crucial for businesses to keep track of all the latest updates on record retention and electronic storage.
It’s also important to choose software that prioritises compliance updates and keeps its systems current on the latest regulations for the countries in which the organisation operates. Rydoo’s team often works on acquiring government certifications that allow users to go fully paperless.
One of the latest certifications acquired was for the German GObd (Grundsätze zur ordnungsmäßigen Führung und Aufbewahrung von Büchern, Aufzeichnungen und Unterlagen in elektronischer Form sowie zum Datenzugriff), an interpretation of the law by the German tax authorities. Being compliant with its requirements allows companies to go fully paperless. For that to happen, companies must follow a set of principles such as accuracy and completeness. Before going paperless, they must also complete some sample procedural documentation that illustrates how data is processed and records are kept. You can learn more about this in Rydoo’s Compliance Centre.
Opting for systems powered with the latest technology is also a step toward achieving a fully compliant paperless process. Software like Rydoo can leverage Artificial Intelligence to automatically analyse employees’ expenses as soon as they’re submitted. The system’s receipt scanner and Optical Character Recognition (OCR) can accurately read receipt data and flag all non-compliant and suspicious activity through AI Keyword Detection. This enables finance teams to reinforce spending control while reducing the need for manual checks.
The days of overflowing filing cabinets and misplaced receipts are fading fast. Going paperless, once a futuristic dream, is now a practical reality for organisations that strive to become efficient, cost-conscious and sustainable. Technology has streamlined the transition, and with more countries adopting regulations that allow digital document storage, the paperless revolution is underway.
As finance leaders embrace the power of technology, going paperless and staying compliant becomes a reality. A strategic approach must be applied to achieve a perfectly balanced flow, and companies need to leap into the future and embrace digital solutions to avoid the often-hidden risks of fraud.
Going paperless isn’t just about convenience; it’s about embracing a future-proof, streamlined approach. For finance leaders, it’s the key to navigating the complexities of compliance while maintaining operational efficiency. The journey to going paperless starts there, and the benefits are undeniable. All they need to do is take that first step.
