Going Green: Another Reason To Go Paperless With Your Payables

Green initiatives are emerging all over eco-minded organizations. Human resources departments are outfitting their corporate offices with furniture made from sustainable materials and plugging into more energy efficient machines. Facility managers are using environmentally friendly supplies like recycled paper towels and low-chemical cleaners. Finance and accounting professionals are doing their part by automating many of their resource-draining business practices.

Moving away from paper-based A/P and A/R processes and embracing digital communications and financial transactions has proven to reduce operating costs and enhance customer and supplier relationships. Automation quickens turnaround times, results in less errors, and even helps increase spending transparency. With so many administrative advantages to boast about, it’s easy to leave out another important benefit of a more paper-less process: a reduced carbon footprint.

Paper Use (And Environmental Abuse) In The Payables Department

According to the EPA, the average American worker uses about 10,000 pieces of paper each year. And the 2014 Billentis report estimates the global volume of bills and invoices totals a minimum of $500 billion annually, with $170 billion of these sent to business and governments. The 2014 AP Automation Study sponsored by the Institute of Financial Operations and ReadSoft revealed that half of the invoices for 70% of their survey respondents are still paper, and checks remain the most common B2B payment method, accounting for 50% of payments.

B2B procurement is harsh on the environment for a number of reasons:

• A/P and A/R transactions usually come with multiple supporting documents
• Maintaining a paper trail depletes natural resources including trees, water, and gasoline—and emits greenhouse gases
• Paper-based administration involves the use of energy through office machines like printers and copiers, and results in solid waste
• Resources used to send and receive paper—from postal truck emissions to jet fuel—can bring pollution to streets and skies

These environmental concerns can be added to the administrative inefficiencies created by paper-based process including manual data entry and transaction reconciliation, the filing and storing of paper, and the loss of documents due to misfiling or theft. All things considered, it’s easy to see why more accounting professionals are taking a more serious look at a paperless office.

Go Green with e-Payables

E-invoicing and e-payments can work together to create a seamless, paperless process for every party involved in the transaction. As reported on pymnts.com, Basware’s recommends businesses reduce their environmental impact by sending and receiving invoices electronically, tossing the paper catalog, and cutting out the paper in payments.

It should be noted, however, that the transition from paper-based to a more automated system isn’t as easy as flipping a switch. It also takes more than an organizational commitment to serving the environment. Going green involves an understanding of existing systems and processes, and how they impact the bottom-line—and how making eco-inspired changes can make a difference in the short- and long-term.

Taking even small steps to digitize information, processes, and communications can go far in helping companies achieve a smaller carbon footprint. Here are some tips to help your organization move into greener pastures:

• Set reasonable goals for your green initiatives
• Educate staff and shareholders on the importance of adopting green business practices
• Communicate the benefits of digital payments to customers and suppliers
• Embrace the environmental impacts of a paperless office: less clutter, easy-to-access digital files, higher quality data, time-savings, etc.
• Consult with your IT department about existing system capabilities for e-billing/e-payments
• Perform a cost/benefit analysis of existing paper-based, manual system vs. automated processes
• Explore resources like PayItGreen’s B2B PayItGreen Invoice to Pay Calculator to learn more about your organization’s unique opportunities to boost your business performance while helping the environment.