Electronic Document Management System or Paper-based – Which is Better?

Have you found yourself surrounded by a countless number of documents when it’s time to file your income tax returns? Probably most of us have. Take that situation to your small office and it doesn’t look very different. If anything, the amount of paperwork you handle could be far more than while simply filing your personal income tax return!
What you need is a document management system that helps you manage vast amounts of paperwork so that you meet your business goals as smoothly as possible. You have two options here: a paper-based system and an electronic document management system. 
Paper-based system 
For ages, businesses have been following a paper-based document management model. Decades ago, the documents may not have been as detailed and the document management systems not as elaborate as now; but they still were ‘systems’. 
Advantages of a paper-based system 
A paper-based document management system does have its positives, such as…
  • Easy handling: As paper is physical by nature and therefore tangible and visible, a person who need not have any knowledge of computers to handle and work with paper-based documents. Such documents can be stored systematically in files, folders, cabinets etc.
  • Reproduction: You can copy a document by using a photocopier machine.
  • Recognized and required by law: Paper-based document originals are recognized by law as being ‘official’ and can be produced as evidence in court. In fact, the law may even require you to have certain documents only in paper format for them to be considered valid.
Disadvantages of having a paper-based system 
A paper-based document management system has several shortcomings, or else electronic document management might not have seen the light of day. 
  • Storage space: As paper is by nature physical, it takes up a lot of storage space. With its limited resources, a small business may not be able to afford to rent or purchase storage space onsite or offsite.
  • Recurring cost of supplies: If you store most of your documents in paper form, you need to keep purchasing several packs of blank paper every month for varying needs: photocopying, printing, fax paper, writing pads, invoice books, accounting books etc. Add to it the cost of other stationery items and you begin to wonder if there is a better alternative to the paper-based system of managing documents.
  • Limited mobility: No doubt you can courier or fax a paper-based document, but how can it match up to email or sending it as an attachment to an instant message?
  • Editing messy: Editing a typed or handwritten document will leave marks on paper. Also, the only way to preserve the pre-edited copy is to make a photocopy before editing it. This process has to be repeated every time you edit or revise the document. All it does is add more copies to your paper archive and leave the original document in bad shape.
  • Collaboration difficult: If your firm’s departmental heads in different corners of the office want to collaborate on a paper document, an assistant will first have to make copies of the document and distribute them. Then each head will have to make notes. To be able to see each other’s notes, they will need to gather anyway for a meeting before they finalize the action plan. Compare this with an electronic document management system where you can simply share the document (grant access to it) with your departmental heads; each of them can add their notes and save the document. The document can then be seen by all with everyone’s notes on it. A face-to-face meeting is not required, thereby saving the time of your busy senior executives.
  • Vulnerable to damage: As paper is exposed to wear and tear through frequent handling, exposure to adverse weather conditions etc., a document management system that is purely paper-based is not a stable one. In the event of a disaster, you could lose your documents as they may not be backed up. Documents that are not in digital form cannot be backed up online.
 Electronic Document Management System (EDMS) 
While a small business may not be in a position to introduce advanced electronic document management early on in its existence, it definitely helps to switch to one in a phased manner sooner than later.
An electronic document management system overcomes all the limitations of paper-based systems discussed above and also offers several other advantages. Sohodox is one such document management system for small businesses that helps you cut costs, save on storage space, make documents shareable and manage them with ease and efficiency.