Unlocking Savings and Efficiency: The True Cost of Manual Data Entry
Every day, companies worldwide grapple with the daunting task of processing and digitizing a staggering amount of documents.
Invoices, bills of lading, customer orders, and other documents flood in from various sources at a staggering pace.
In order to be able to use and track the data contained in these documents, companies are often required to employ teams of data entry clerks to manually process these documents.
Manual data entry is inefficient and error-prone, and it drains time, resources, and finances.
In this blog post, we will delve deeper into the real costs associated with manual data entry, and shed light on the transformative benefits of automating data entry processes through the use of software powered by artificial intelligence (AI).
Understanding the Costs of Manual Data Entry
Manual data entry in logistics involves the laborious process of manually inputting information into a shipping software or other logistics management system. Although it may appear to be a cost-effective solution for small businesses, manual data entry is time-consuming and prone to errors. Each day, employees spend hours entering data, and with each entry, the risk of mistakes grows.
The cost of manual data entry can be divided into two main categories: direct and indirect costs.
Let's focus on the direct costs first to better understand the disadvantages of manual data entry.
Direct Costs of Manual Data Entry
Direct costs of manual data entry are relatively straightforward. These costs are easy to quantify and measure, and have a clear dollar amount attached to them.
The direct costs of manual data entry include:
Employee salaries
Employee benefits (employer deductions, paid vacation, insurance etc.)
Management / supervisor salaries + benefits
Equipment (computers, work stations)
Office Space
And more
Let's consider an example where data entry clerks earn an hourly salary of $15 and spend 15 minutes on average to manually enter a single document. During that short period of time, the employee needs to review the document, understand the data within, and then enter it into your internal system.
In the absence of errors, the direct labour cost for entering a single document amounts to $3.75 in employee wages.
However, it is important to acknowledge that data entry clerks often make mistakes, particularly when under time pressure. Research suggests that the probability of errors in manual data entry ranges from 18% to 40%. To err on the side of caution, let's assume a conservative 20% error rate, equating to one error for every five documents entered.
If you add in the employee labour cost of rectifying these errors, the true cost of manually entered documents increases to $4.50 per document.
If a company has to process 100 documents daily, the direct labour costs alone amount to $450 per day.
This does not include employee benefits, supervisor/manager salary and benefits, equipment or office space.
As you are surely aware the direct costs of document processing add up quickly.
Our software greatly lowers the cost of processing documents, while greatly improving accuracy.
In addition to these direct costs, the there are many indirect costs that can also be avoided by having a more automated process for document processing.
The Hidden, Indirect Costs of Manual Data Entry
While the direct costs of manual data entry are easy to quantify, there are also hidden costs that can have a profound impact on your company’s bottom line.
These indirect costs may not possess a direct monetary value, but their consequences can be significant.
The indirect costs of manual document processing include:
missed deadlines due to slow or inaccurate data entry
delays in order processing
ineffective decision-making due to incorrect or delayed data
inaccurate inventory levels
dissatisfied customers
reputational damage
regulatory issues due to errors or inaccuracies
All of these factors can have a detrimental long term effect on a business’ operational health and profitability.
Indirect costs can be difficult to accurately quantify, yet any competent manager can easily see that the issues listed above will negatively affect their company’s bottom line in the long term.
All of the above issues will also incur additional costs to rectify.
When presented with the full cost of manual data entry, most companies are floored by just how much minor, yet repeated errors cost them at the end of each year.
Although the integration of an automatic document processing system may seem costly and complex at first, it quickly becomes clear that the benefits greatly outweigh the costs.
Automating Data Entry: The Solution for Efficiency and Cost Savings
Despite the high costs and challenges associated with manual data entry, many companies are still fully reliant on it for processing the ever increasing amount of documents that are generated daily.
A recent survey found that up to 46% of supply chain professionals still rely on Excel spreadsheets for their operations.
In 2023, there is clearly a better way.
To alleviate the many costs and challenges associated with manual data entry, industry leading organizations are increasingly turning to AI-powered software solutions such as ours.
Automating data entry and processing can significantly reduce costs, errors, and operational disruptions.
By leveraging the power of artificial intelligence and automation, businesses can streamline their operations, improve data accuracy, and benefit from significant cost savings.
Mely.ai’s intelligent document processing software provides clients with many benefits including:
1. Substantial Cost Savings
After implementing our AI powered intelligent document processing software, our clients in multiple industries have reported average cost savings of over $100,000 annually.
2. Increased Accuracy
Not only does our document processing software save your organization large amounts of money, it does so while also improving the accuracy and consistency of the data entry process when compared to a human data entry clerk.
3. Enhanced Efficiency and Productivity
By automating the data entry process, our intelligent document processing solution frees up valuable time and resources previously allocated to data entry related tasks. These resources can then be redirected towards higher-value activities that drive innovation, improve customer service, and contribute to business growth.
4. Improved Decision Making
With access to more accurate data, quickly, executives, managers and other decision makers can make better descisions, faster, further driving improvements in a company’s efficiency and performance.
Conclusion
Manual data entry comes with significant costs, both tangible and intangible.
The direct costs along with the indirect costs can have a detrimental impact on a business's bottom line.
By embracing automation, businesses can benefit from huge cost savings while at the same time enhancing operational efficiency.
With Mely.ai, companies can eliminate the time-consuming and error-prone process of manual data entry, empowering their teams to focus on strategic tasks and propel their operations forward.
By making the shift to automated data entry, businesses can future-proof their operations and continue to thrive in highly competitive industries.
Are you ready to improve accuracy in your data entry processes while lowering costs?