Instructions for “Imaging Justification Tool”

Introduction:

Not all of the costs shown on the “Imaging Justification Tool” may apply. If this is the case, enter zeros for items that do not apply. Default amounts are shown on the “Imaging Justification Worksheet” as a guide. New values should be entered as applicable. Lease rates may vary from company to company and as interest rates change.

Non-labor costs:

1. Monthly rental of storage space that can be eliminated - If you rent space for document storage, enter amount of monthly rent for storage space as well as access fees that can be eliminated by storage of documents on computer storage media.
2. Cost to build new storage space: 
   Cost of building - If you plan to build a new storage facility, enter the amount required to build a new building for storage of records.
   Years depreciated - Enter the number of years over which the new building will be depreciated.
3. Number of feet saved - If you are using company storage space, enter the number of feet saved by storage of documents.
   Cost/Sq feet/year - Enter the cost per square foot per year.
4. Folders/Month - Enter the number of folders used per month to store documents.
   Cost/Folder - Enter the cost per folder.
   % Eliminated - Enter the percentage of folders to be eliminated by scanning.
5. Pages of docs copied - Enter the number of pages of documents copied.
   Cost to copy a page - Enter the cost to make a copy including paper.
6. Rental, lease, and maintenance of copier eliminated - Enter the total costs associated with the copier to be eliminated by scanning.
7. Postage/Overnight/Mo Eliminated - Enter the monthly costs for shipping and return of documents for approval, etc.
8. Cost for Microfilm/Fiche per month - Enter the monthly costs for microfilming or preparation of microfiche.
9. Hours faxing documents - Enter the number of hours spent faxing documents that will now be available on-line.
   Phone cost/hour - Enter the hourly costs for phone calls.
10. Total AR dollars now - Enter your total average accounts receivable value.
    Days Receivable now - Enter the average number of days for outstanding accounts receivable.
    Days Rec. reduced - Enter the reduction in days receivable with better information.
11.  Cost of money - Enter the cost of money (interest rate) for your company.
12. Increased A/P Discounts : 
    Dollars improved - Enter the dollar value for increased accounts payable discounts resulting from faster approval of accounts payable invoices.
    Average disc, % - Enter the average accounts payable terms discount.
13. Increased sales by better customer service:
    % Improved - Enter the estimated amount of increased sales due to being able to provide better customer service. One person within seconds can pull all documents relating to a customer without saying, I’ll call you back. Customers like to be able to get an answer on the first call.
    Gross Profit % - Enter the gross profit % to figure gross profit on savings.
14. Reduced amt. of errors, non-compliance, etc. - Enter the annual dollar improvement due to reduction in errors, non-compliance, etc.
15. Additional amt collected in claims- Enter the annual additional amount that could be collected in claims with better and complete documentation.
16. Reduced amount of audit fees with better access - Enter the annual amount resulting from reduction in audit fees associated with better availability of documents.
17. Reduction in litigation costs with better information - Enter the annual amount resulting in reduction of litigation costs associated with better availability of documentation.
18. Additional business as marketing advantage:
    Additional sales - Enter the additional annual sales resulting from better marketing, e.g., providing CD’s with supporting documents to customers for cost-plus billings.
    Average gross margin - Enter the average gross margin percent.\
19. Reduced mistakes by better information - Enter the annual amount associated with finding billing mistakes by vendors, etc. due to having better information available.
20. Savings in equip. costing with info.:
    Total equip. cost - Enter the annual equipment costs .
    % saved - Enter the percentage of savings resulting from having better access to documents pertaining to equipment such as original invoices, work orders, warranty information, etc. 

Labor Costs:

1. Copying documents by administrative personnel - Enter monthly labor hours associated with making copies of documents.
   Average cost/hr - Enter the average cost per hour of labor.
2. Copying of documents by managers - Monthly hours spent by managers or other higher-paid personnel.
   Average cost/hr - Enter the average cost per hour of labor.
3. Reconciling, copying, assembling for reporting - Monthly hours spent preparing paperwork for reporting.
   Average cost/hr - Enter the average cost per hour of labor.
4. Handling, Mailing and Distribution of documents - Monthly hours for handling and preparation of documents for distribution.
   Average cost/hr - Enter the average cost per hour of labor.
5. Filing of invoices and other documents - Monthly hours associated with filing of documents, invoices, etc.
   Average cost/hr - Enter the average cost per hour of labor.
6. Purging old documents - Monthly hours spent purging old documents from files.
   Average cost/hr - Enter the average cost per hour of labor.
7. Time spent looking through files for information - Monthly hours spent searching files for information.
   Average cost/hr - Enter the average cost per hour of labor.
8. Time researching old information in remote storage - Monthly hours spent searching through old files for information.
   Average cost/hr - Enter the average cost per hour of labor.
9. Sorting, compiling, reconciling, and filing of Timesheets - Monthly hours spent working with timesheets that can be eliminated.
   Average cost/hr - Enter the average cost per hour of labor.
10. Time keying of timesheets eliminated if use OCR - Monthly hours spent keying information from timesheets. Optical character recognition will largely automate this process.
    Average cost/hr - Enter the average cost per hour of labor. 
11. Reduced time in pulling documents for sales tax & IRS audits - Average monthly hours reduced by using the computer to locate and pull documents rather than having to do by hand.
    Average cost/hr - Enter the average cost per hour of labor.
12. Recreating lost files - Monthly hours spent recreating files that have been lost.
    Average cost/hr - Enter the average cost per hour of labor.
13. Reformatting of invoices into owner formats - Monthly hours spent reformatting invoices into owner designated formats.
    Average cost/hr - Enter the average cost per hour of labor.
14. Making sure all invoices returned and entered from project manager - Enter the hours spent by the project manager making additional copies, filing, and handling return of the invoices to he head office.
    Average cost/hr - Enter the average cost per hour of labor.
15. Average costs of benefits (taxes, insurance, vacation, holidays, etc) - Enter the percentage to be added to labor hourly rate to cover employee benefits, taxes, etc.
16. Facility costs for phone, desk, computer, space … - Enter the monthly amount for an employee’s facility costs.

Imaging Costs:

1. Hardware/software/installation - Enter the total costs for the imaging System. This amount is provided by your System provider.
2. Monthly maintenance (factor in wty for average) - Monthly maintenance associated with your imaging System. Since this is zero during the warranty period, use the average monthly cost over a five-year period.