Paper Documents vs Digital Documents: Pros and Cons

The debate over paper documents versus digital or electronic documents continues to be discussed and deliberated. This may seem somewhat surprising, given how much of the business world has become fully digitised. This is true even of small businesses, as increasing numbers of business owners invest in digital data management systems. The consensus seems obvious: electronic data platforms are here and their domination of the world of data realm will only continue to grow.

The debate over paper documents versus digital or electronic documents continues to be discussed and deliberated. This may seem somewhat surprising, given how much of the business world has become fully digitised. This is true even of small businesses, as increasing numbers of business owners invest in digital data management systems. The consensus seems obvious: electronic data platforms are here and their domination of the world of data realm will only continue to grow.

Yet the issue of whether (or, at least, when and where) to use paper documents or digital documents (or the like-meaning electronic documents) is an interesting one that any business should consider. This article will delve into what should be an informative comparative assessment of the relative pros and cons of both paper documents and digital/electronic documents.

 

The Pros of Digital Documents

It has to be said outright: for the most part, electronic forms of documentation undoubtedly prevail in most companies today, especially those in which secure data retention and analytics is critical to their business function. For many companies, this usually occurs in a process of digital transformation. With that in mind, here are the principal benefits of having data in digital format:

 

  • Ease of access: To compare accessing a digital file to looking for a paper document in a filing cabinet is like comparing a walk in the park to a hike up a mountain – in sandals! The former is simply so much easier and (usually) intuitive. The ‘paper trail’ of a physical document system can be hellish at times. Even ‘hidden’ electronic documents are usually less difficult to locate.

 

  • Speed of access: Another analogy: to compare the time it takes to find a digital document versus a paper one is like comparing a Ferrari Testarossa to a Ford Model T! Invariably, it is quicker to find an electronic document.

 

  • Space usage: There was a time (still not that long ago for many companies) in which entire storerooms or off-site document storage were essential for the safekeeping of paper documents. Electronic document management solutions, whether in the cloud or on an institutional server, take up far less physical space.

 

  • Access control: Many business documents are confidential, even critically so. Keeping paper documents secured with ‘lock and key’ can often leave said documents vulnerable to theft, misplacement or ‘pilfering’ by unwarranted personnel or other parties. Restricted access control to digital documents is far easier to do and control. It also facilitates an ‘electronic trail’ of every person who may have accessed a given document.

 

  • Flexibility: This is term often associated with electronic documents and why they tend to be the preferred option for most modern business processes. A good example of the organisational flexibility provided by using digital documents is the ability of client or organisational records, such as customer records, to be shared among colleagues who may be geographically diverse or work in a hybrid workplace.

 

The Cons of Digital Documents

As seen above, digital solutions offer many benefits to a company’s data management systems. Nevertheless, there are some very important caveats (read: drawbacks) regarding the usage of digital documents, which need to be highlighted:

 

  • Security breaches: Any digital data, however ‘secure’ and encrypted it may be, is at risk of being hacked. Corporate cybercrime, for example in the form of ransomware, is a huge, growing issue worldwide, according to Forbes, and it’s not only large multinationals or government entities that are at risk of being hacked. Furthermore, that risk is 24/7.

 

  • Customer resistance: Many people continue to be sceptical about the authenticity and validity of digital documents, as many in the customer service field will know. Service industry experts attest to the lasting fact that many customers still prefer a physical receipt or invoice to a digital one, for example. This may have to do with the fact that paper is something tangible, i.e. that you can feel and hold, whereas anything digital feels ephemeral and ‘easily lost’.

 

  • The ‘Bitcoin Energy Dilemma’: Although usually perceived as being more ‘environmentally friendly’ than paper-based systems, certain computer systems can be savagely energy-hungry. An excellent example of this is the world’s leading cryptocurrency, Bitcoin. The larger Bitcoin grows, the more people it needs to be ‘miners’ plugged into the system, resulting in a collective energy consumption exceeding that of many countries. The extent of the ‘Bitcoin dilemma’ is clear in the graph below:
Paper documents vs digital documents
Paper documents vs digital documents

 

The Pros of Paper Documents

There remain compelling reasons why paper documentation may be preferable in certain instances, and they can include:

 

  • Legal documentation: There are many forms of legal or financial documents that are still best-suited to physical copies. Many of them may have the need for physical signatures or a notary public’s seal mandated by law. Any real estate agent or mortgage lender will insist that you get a physical copy of a deed of sale or lease. Even today, not to do so seems crazy! Law documents and financial statements in paper format continue to proliferate and their use seems secure into the medium-term future, at least.

 

  • Trustworthiness: As noted above regarding paper invoices or receipts, there continues to be trust by many in society with certain types of physical documents. Not to be overlooked either is the fact that digital data, especially private data, continues to have an existential, even Orwellian ‘Big Brother’ connotation to it. Some people simply don’t fully trust electronic documents.

 

  • Readability: It may seem a minor quibble, but certain digital documents can be very difficult to read compared to paper ones. The physical act of having to scroll or flick through a digital document can also be more distracting or difficult compared to holding a paper document in the hand. This is especially true of dense, technical content.

 

  • Life’s Reality: Sometimes having a hard copy of a document just makes sense, for example when wanting to take quick notes or if only as a secondary back-up to an electronic copy. It can also be a smart back-up, such as when visiting a remote location that may not have a viable internet connection.

 

Cons of Paper Documents

As with digital documents, there are serious (and mostly obvious) drawbacks with using paper documents. These may include:

 

  • Storage space: More often than not, paper files can occupy a

significant amount of space in the form of physical documents, filing cabinets and even filing rooms or document storerooms. Many smaller businesses can struggle to find the space for this type of document storage.

 

  • Physical damage: Paper documents can easily wear or fade with time and they can also suffer from physical damage, such as that caused by humidity, paper-ingesting microbes and insects, accidental spillages and flooding, to name a few. ‘Wear and tear over time’ is synonymous with paper documents.

 

  • Loss: Most egregiously, fire has destroyed countless paper document archives throughout human history. Paper documents are also easily misplaced or somehow ‘lost in transit’ between two points or between people.

 

Pixels versus paper, that is the question. Except that question is too binary. As shown in this article, both hard and electronic copies have their place. Although most business processes today are best-suited to digital solutions, there is a place too for the continued used of paper-based documents. As with so much in business, it is not a black-and-white issue or a zero sum game.

 

The bottom line: know your data needs, place them in their correct business and legal context and the most appropriate paper or digital solution will follow.

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