Home > Paperless Return on Investment > Paperless ROI and The Real Cost of Paper

Paperless ROI and The Real Cost of Paper

RCC Consulting put out a very interesting research on the cost of paper back in 2001. As we develop our own ROI on cost of a paperless solution vs. cost of paper (and managing paper, printers, storage, wasted travel) it is obvious that the besides cost savings the most important idea to grasp is efficiency. The ROI for paperless is justified even more so for a real estate professional when considering desk fees and split negotiation. If you can lower the cost of expenses associated to conducting business for the broker shouldn’t you be in a better position to negotiate better splits?  And if you are closing more business because you are working smarter?  This is where the ROI becomes a personal victory!

Another point worth discussing involves paperless solutions available on the market other than Real Estate Dashboard. Can you put together a paperless solution blending together several elements?  Buy a tablet, get an e-fax number, get some adobe acrobat and windows software, and get wireless broadband service. But who supports this type of solution? And how can you be assured that your documents are backed-up and secure.  And more so how are you capturing signatures that are enforceable in a court of law. Duct taping together a solution is costly (close to $60/month) and you are jumping around from platform to platform trying to manage the solution. Real Estate Dashboard makes it easy by integrating all of the features into one platform and it is the only software available on the market that allows you to capture electronic biometric signatures that are enforceable in a court of law. And all for $34.95/month!

But let’s look at the REAL COST OF PAPER (written by RCC Consulting) written back in 2001.  I think this is a very imformative look at what paper costs to an office of 100 people.

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“The price of paper is cheap. Right. Wrong. When you consider the real cost, paper is extremely expensive. A number of factors must be taken into account to measure the cost of paper and the savings that can be achieved by instituting a paper reduction program. These factors include copying, faxing and storage costs. Let’s look at a typical office with 100 employees to calculate the total cost of paper.

Let’s assume that this office purchases approximately 10 million sheets of paper or about 50 tons. This seems like a lot but if you look at your own purchases you will find that 10,000 sheets of paper per person is a reasonable number and could even be conservative for most offices.

The cost of this paper is relatively minor at .003 cents per sheet for a total cost of approximately $30,000.00. Now let’s look at how that paper is used. Generally this paper is used for photocopying (45%); printing (35%); faxing (5%) and mailing (5%) with 10% being wasted. Approximately 30% of this paper ends up in filing cabinets. 95% of this paper will have to be disposed at some point.

Now let’s look at the costs associated with each of these activities:

– Photocopying and printing generally costs about 3 cents per page. This price includes the capital cost of the equipment, toner, and maintenance but not necessarily the time spent waiting at the copier for your turn.

– Fax costs can vary depending on the distance the faxes are sent but in most organization fax costs can be about 40% of the monthly telephone cost. In our office let’s assume the annual telephone cost is $50,000. If fax costs are 40% this would be about $20,000 per year. Since 5% of the paper or 500,000 sheets are faxed annually this equates to 4 cents per copy for telephone costs.

– 5% of the paper or 0.5 million pages are mailed or couriered. If we assume that 10 pages are included in each envelope this would be 50,000 envelopes sent out each year. Assuming that 90% are mailed and 10% sent by courier this means 45,000 are mailed with an average postage cost of 60 cents and 5,000 sent by courier at an average cost of $10.00 per delivery. In addition the cost of each envelope is 5 cents.

– Then there’s storage costs. Let’s assume that each drawer of a filing cabinet holds 7,500 sheets of paper. One years worth of paper could be stored in 100 filing cabinets. This is calculated by taking the total paper times 30% divided by each 4 drawer cabinet which would hold 30,000 pieces of paper. Each filing cabinet takes up 3 square feet and let’s assume that office space leases for about $60.00 per square foot. This comes to a total cost of $18,000.00. Adding the cost of filing folders and tabs etc. our cost might be $20,000.00 or approximately .0067 per sheet. This assumes that the filing cabinets are cleaned out each year and replaced with new files. In most offices files generally have to be kept for seven years, however some files can be moved to archives. Since this cost is relatively small let’s assume the long-term cost of storage is $10,000.00 per year, for an average of 5 years for a total life cycle cost of $50,000.00. This gives an average cost of .0167 for the 3 million sheets in long term storage. Assume disposal costs of .001 per sheet for the total 10 million sheets.

Activity Cost per sheet No. of sheets Total Cost

Paper purchases                  10,000,000                   $30,000
Photocopying                       4,500,000                      $135,000
Printing                                    3,500,000                      $105,000
Faxing                                       500,000                         $20,000
Mailing                                     450,000                          $27,000
Courier                                    50,000                             $50,000
Short term storage              7 3,000,000                  $20,000
Long term storage              3,000,000                      $50,000
Disposal Costs                      10,000,000                    $10,000

Totals                                                                                    $447,000

©2001 RCC Consulting

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  1. June 11, 2009 at 5:23 pm

    I cannot thank you enough for posting this data. I am in the process of pitching the paperless idea to my boss, the VP of Operations, and having resources like this to guide me through how to quanify the cash value of paper is priceless!

  2. October 8, 2009 at 4:27 am

    You made some good points there. I did a search on the topic and found most people will agree with your blog.

  1. June 11, 2009 at 5:46 pm

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