Taming the Paper Mountain

If you need a little (or a lot of) extra space in your filing cabinet, or want to get rid of the cabinet altogether, you can take all of that paper and scan it into your computer. This can make it easier to find what you need to when it comes time to do your taxes, review your pay history, compare your old insurance policies, etc.

There are five things to consider when you decide to start eliminating paper:

  • A scanner that will work for your situation
  • Software to organize what you’ve scanned
  • Hard drive space requirements
  • A workflow for getting everything scanned
  • Backup of your documents

Scanners

There are almost too many options when it comes to scanners. There are flatbed, document-feeder, or single-sheet-feed scanners; standalone devices or all-in-one printer/scanner/copier/fax machines; connection via USB, wired network, or wireless networking…. the variables go on and on.

I find that having an all-in-one (AIO) device with a good document feeder is a great way to save space, instead of having a separate printer and scanner. Of all the various manufacturers, I’m partial to Brother, because I find they give you a good balance between cost and funcionality. The other most prominent AIO vendors are HP, Epson, and Canon. You’ll pay anywhere from $150 to $400 for an all-in-one unit — cheaper ones are, well, cheap, and might not last very well.

There are also small, portable scanners, which feed single sheets through, and connect via USB. These are good if you need to take a scanner with you to scan receipts or short documents, but if you have a lot of pages to scan, they’re not ideal.

If you only have one computer, a USB-only device is fine. Networked AIO devices are great for sharing between multiple computers, and wireless networking is a great option if you have a wireless network and don’t want to deal with the wiring issues. HP and Brother do a great job with Wi-Fi equipped AIO devices.

You may have seen TV commercials for the NeatDesk system. This is a cool device that will scan full pages, business cards, receipts, and other sizes. The software built into the scanner then read the pages to determine the kind of information that is on them, and then passes that info into the NeatWorks or NeatDesk software on your computer, where it is categorized and tagged with according to the contents.

Since Neat arrived on the scene a few years ago, other vendors have made similar scanners. You can find Epson’s Workforce Pro GT-S50 at most office supply stores. Fujitsu also makes the ScanSnap S1500. Both of these scanners are priced similarly to the NeatDesk, at about $400.

Document Management Software

To capture and deal with all of these scanned files, you’ll need some kind of software to manage it, organize it, label it, and view it. Ideally, you’ll also want to add identifying information, or tags, to each document, so you can use a search function to find whatever you’re looking for. You can also use Optical Character Recognition (OCR) to read all the text, and automatically generate a searchable database of your files.

Neat has their NeatDesk software on Windows, and NeatWorks on the Mac. This takes advantage of the advanced output from the scanner, as mentioned above. It really makes for a much easier way of organizing things.

Paperport, by Nuance Software, is a great solution for Windows users, with support for just about any scanner you may have. On the Mac, Mariner Software makes Paperless, which dips into the data to give you all kinds of reports, charts, and graphs about the contents of your files. (Paperless is also available for Windows.)

Hard Drive Space

You’re probably wondering how much space those documents will take up on your computer’s hard drive. Won’t scanning all of these things overwhelm your computer?

Not really. Unless you scan everything at full-color, high-resolution, most documents will be less than one megabyte per page. My own document library contains hundreds of documents, with over 15 years of utility bills, bank statements, insurance policies, and other important documents, and takes up just about 2.5 GB of space. That will grow, of course, but with hard drive sizes of 1 TB (1,000 GB) becoming the de facto minimum on most new computers, document management for a small business or home office will be just a fraction of the space available to you.

Back It Up!

Once you start collecting all of these documents, it is vital that you have a way of keeping them safe. If you don’t have a backup strategy now, GET ONE! I’ll have another article about backup options on my site shortly, but for now consider these options:

  • Manually copy all of your document library to a second hard drive on your system
  • Use backup software to backup to a second hard drive (software such as Acronis True Image or Norton 360 for Windows, and Time Machine or Retrospect for Mac)
  • Use a service which backs up your files to a server on the Internet, such as Carbonite, CrashPlan, or Mozy

Workflow

Depending on how much paper you’re scanning, this process can take a long time. And more paper is coming in all the time, so you’ll want to stay on top of that, as well. Here are my suggestions:

Start with the most important documents first: vital records, legal documents, real estate paperwork, current insurance documents, and the things you’ll be keeping in a fire safe or safe deposit box. These are documents you won’t be shredding once they’re scanned, because you’re likely to need them at some point.

Next, start working your way through your tax records from the current and most recent years: receipts, bills, statements, W-2 summaries, etc. Again, you’ll probably keep the physical copies of these for up  to seven years for individuals, and maybe forever for a business.

Then go through your archived bills, bank statements, pay stubs, and all the other recurring documents you’ve been saving. Work your way through by year, by category, by account, or by shoebox, according to how you have them stored.

Then, if there’s no legal need to keep the physical copies, destroy them with a good shredder. I guarantee you that unless there are blood stains on them, you’ll never need the gas bills or credit card statements from 1996 again!

Then come up with a way of keeping up with the new paper that comes in. Scan it as soon as you get it, or as soon as you pay it, or save it up to scan everything weekly or monthly. Make a system that works for you and stick to it as best you can.

Legal Issues

The IRS has ruled in Rev. Proc. 97-22 that accurate scans of paper documents, or completely digital documents, can be submitted with your tax returns. That means you don’t really have to keep as much paper as you’re used to.

As for bank statements, credit card statements, and general bills, more and more companies offer paperless delivery as an option. If you download the documents from their websites, store them along with your scanned documents, and never print them out at all! As long as they’re digitally produced, or are accurate digital copies of paper documents, they are legal, according to nearly all financial authorities. Check with your local authorities to be sure if you have any questions about this.

Conclusion

While we’re not in a completely paperless society, as so many have promised over the years, you can definitely reduce the amount of paper you have around, and hopefully keep things more organized, using scanning technology and good strategies for management and backup of your data. If you have specific questions, use the contact form to send them my way.