5 Hidden Costs of Manual Processes Where Businesses Lose Time and Money

If the phrase “but we’ve always done it this way” is often heard in your workplace, read on. While familiarity and comfort can help employees feel confident about their work, there comes a point when it adds risk. One of those workplace comforts is manual processes, which can be technology, culture, and employee-driven. However, investing in automation and technology to reduce manual work can reveal opportunities and cost savings in nearly every industry. Learn about the hidden costs that manual processes may be costing your business and how you can reclaim valuable opportunities.

1. Inconsistencies in Documentation

The way one colleague does a transaction may not be the same as another's. Each team member brings with them previous experience and preferences, which may not align with your standards. However, without standardization, there’s little recourse in holding team members accountable. 

For example, invoicing can become varied when data points are not required. Use invoicing software to add categories and standardized drop-downs for key elements like work type, billing codes, and cost centers. This will help organize each invoice and make for easy reporting at month-end. Additionally, leadership can review how teams are tracking with sales and customer service teams gain autonomy when researching customer inquiries.

2. Human Errors and Omissions

We’ve all misspelled an email or two, but in official business documentation, human errors are a bigger issue. Mistakes in data entry, calculations, and processes can result in expensive issues that your company has to mitigate. A miscalculation in an Excel spreadsheet can run through an entire ledger. If a job is misquoted, you may need to eat the loss for the sake of customer satisfaction and reputation. 

Manual work also puts more risk on the employees' shoulders. This may make manual work take even longer due to anxiety-driven reviews, looking for potential errors. Reduce human error by implementing automated data validation and standardized templates. While this will require work upfront, it will help make daily operations and long-term costs, and time savings a reality.

3. Duplication of Effort

When your team isn’t working from the same playbook, it’s hard to manage workloads. Plus, a manually produced report requires one or more reviews by a more experienced colleague or supervisor. This means more employees are needed to conduct the same work, adding to labor costs and draining resources. 

Software additions like customer relationship management platforms can centralize data and prioritize customer acquisition. Marketing teams can pull customer information into targeted campaigns, improving the quality of sales team leads. Upon login, your teams can see what customers are at the right moment in the funnel for their type of work. Many of these tools offer native reporting mechanisms that export and present data in compelling charts and graphs that help improve decision-making and long-term strategies.

4. Data Management Gaps

Mismanaged data is one of the biggest risks for companies today. As new technology is onboarded, transposing all data into new systems is a challenge. With the addition of cloud-based tools, teams may not have essential files consistently managed. One sales representative may retain everything in their OneDrive, and another may use their desktop. When it’s time to issue invoices or import customer lists, accounting and marketing teams have no data to work with. 

Manual data entry and how it’s stored increases the risk of loss, duplication, and, as noted, inaccessibility. Your processes and procedures can help drive compliance with your chosen methodology, but you have to establish the location. Centralized digital systems to manage data securely and establish requirements for valuable information. In situations where certain information is not available or refused, use your process to solve or override this issue. This way, you maintain the ability to input data even if a client does not provide a mobile number.

5. Lags in Reporting and Insights

The data may exist in your shared drive, but if you can’t make sense of it, it lacks value. Human analysis remains essential, especially when gauging external conditions and reputation. However, when it comes to developing reports and trends for key business data, technology tools are ideal. When you use collaborative cloud-based software to manage accounting, you can automate reports. If done manually, these reports require the availability of your team and their capacity to conduct this detailed deliverable. 

When your reporting period ends on a weekend, data analysis can run days behind. By the time work is complete, it may be weeks or even months past its closure. Late arrival of data analysis means you’re well behind the eight ball in making informed decisions that guide your business. Especially in seasonally dependent companies, automated reporting delivered to key stakeholders is essential for managing your business and capitalizing on opportunities.

Tighten Your Processes and Unlock Valuable Opportunities

When your processes are simple, repeatable, and automated, you establish a rhythm that you can rely on. While human intelligence and monitoring are still critical, your team can enhance their capabilities with the partnership of technology. Some processes may simply be a documented way of conducting work. Others may be automated reports within your accounting software that reduce touchpoints for your team. 

Collaborate with your teams within core areas to identify which processes can be improved upon and standardized. Get their insights and buy-in as well as participation in tightening your operations. When you do, you’ll have a more comprehensive view of needed improvements and a greater likelihood of maintaining them. Once implemented, monitor performance for improvements and compliance to maintain momentum and unlock your potential.