How Manual Data Entry and Human Error Are Costing You Money

By Frank Tilleli on August 22, 2022

How Manual Data Entry and Human Error Are Costing You Money

If you're still typing in your data by hand — or worse, bookkeeping with pen and paper — you're probably costing your business more money than you think. Manual data entry can be a significant expense for businesses of any size. These costs can come from any number of places, like the price of labor, lost time, regulatory fines and employee turnaround. Luckily, data automation has become increasingly accessible, so you can take care of data entry work quickly and increase your profitability. Cost savings are one of the most common benefits businesses see when implementing automation platforms.

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Disadvantages of Manual Data Entry

Let's take a closer look at why, including how the costs of manual entry add up and how to reduce data entry errors.

Manual Data Entry Leads to Inaccurate Information

1. It Leads to Inaccurate Information

One of the most notable disadvantages of the manual data entry process is the introduction of inaccuracies. Even the best employees on your team are only human and prone to occasional mistakes. Fatigue, stress, distractions, boredom and even simple misreading can all lead to manual data entry errors. Some are more problematic than others, but it's practically a guarantee that manual data entry mistakes will occur. A general rule of thumb is that human error rates usually hover around 1%. One study involving laboratory tests found an error rate of almost 4%, with over 14% of errors containing significant and potentially dangerous discrepancies. Calculations or large data tables can compound mistakes.

Depending on the nature of your work, the ramifications of errors can range widely. 

  • Fixing processes: The business needs to spend time and money correcting the error, such as contacting a customer or resending an order.
  • Reputational damage: Some errors will impact the company's image. Low-quality products, incorrect orders and damaging news headlines can mar your brand for the long term.
  • Quality control: Mistakes might increase the need for quality control processes, like expensive camera systems or labor-intensive inspections.
  • Effects on decision-making capabilities: If managers make mission-critical decisions based on inaccurate data, operations can easily go in the wrong direction, potentially without a clear cause.

Improving data quality is a typical reason for businesses to turn to data entry automation. Software doesn't have the same problems as humans. It works quickly and consistently, without everyday behavioral influences to slow it down. Computers are also more capable of conducting accurate information audits.

2. It's Time-Consuming and Slow

A form entry here, a fax sent there — it may not seem like much at first, but these small data entry tasks can add up. They keep workers from doing more essential work and add to the labor requirements of general operations. Plus, you need to spend time training employees on the processes. A lack of high-quality, updated information can also slow down decision-makers. They might need to chase down data before they can act or verify that they aren't using old information.

Automation can offer a significant return on investment from labor savings alone. Computers work quickly and can even keep plugging along after your employees go home for the night. An automated solution can also centralize your data, so decision-makers can easily access a wide range of information from one place.

3. It Can Cause Compliance Issues

Poor data quality hurts your ability to meet compliance guidelines. At best, errors could show up in audits, but a more severe consequence might be a dangerous problem with your product or service. In industries such as pharmaceuticals, food and beverage and aerospace, meeting regulations is critical, and manual data entry problems open you up to more risk.

Manual data entry processes also limit your ability to create a paper trail. Many industries require careful logs and records of their activities, and manual entry makes it easier for employees to forget, damage a document or even falsify results.

With data entry automation, your documentation happens quickly and reliably, allowing you to stay ahead of regulations and avoid the fines, reputational damage and lost revenue that come with violations.

4. It Can Contribute to Disengaged Employees

No one wants to spend time on a task a computer could do, so it's no surprise that manual data entry tends to feel boring and repetitive. It doesn't put your employees' skills to use, and leaves them feeling disengaged with their work and their employer. You chose your employees for a reason — make sure they get a chance to bring value to the business. You probably pay a premium for their time, so you don't want to waste those wages on tasks you could streamline.

Most workers understand the value of automation, too, with 81% of people agreeing that it can leave more time to focus on valuable tasks. Would you rather spend time typing in numbers or using your creativity to solve problems? Engaged employees can help improve a wide range of worker metrics, such as satisfaction, turnover and even data entry error rates. Take some time to talk to your employees and see which tasks slow them down or are the most tedious. You might be surprised at how simple it would be to automate them.

5. It's Hard to Scale

Finally, manual processes lack business flexibility. If your demands scale up or down, such as for holiday fluctuations, you need to worry about staffing demands. Imagine you experience a sudden spike in demand. You need to hire more staff members, train the new employees and manage them accordingly. If you can't scale your team effectively, you might miss out on orders, disappoint your customers and ultimately damage your reputation. And after demand returns to normal, you might have an unnecessarily large team to support.

Automation solutions can scale up quickly as your business needs change, making it easy for you to adapt and adjust to an evolving industry.

Start Automating Today with ConnectPointz

Start Automating Today

Automation might seem out of reach for small businesses or those with complicated workflows, but the technology to accomplish it has gotten more accessible over the years. ConnectPointz makes it easy to automate your business processes in an accessible, easy-to-use platform. With the help of electronic data interchange, ConnectPointz standardizes your data and facilitates simple communication with your partners, like warehouses, third-party logistics providers, business software and online sales channels. Save money and work more productively with our versatile solutions.

Learn more about ConnectPointz online or reach out to us today to chat with a representative and start your journey toward digitization and efficiency.

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