Intelligent Document Processing

5 Unavoidable Risks of Manual Document Processing

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5 Unavoidable Risks of Manual Document Processing

As a business grows, so does the paperwork. Manually processing these documents poses major obstacles when the business scales.  Manual document processing is laborious, time-consuming, and hoards valuable human resources. To make things worse, it is often plagued with data errors. And, when left unchecked, it can create security and compliance vulnerabilities. 

In this article, we take a closer look at the top 5 unavoidable risks of manual document processing and how to overcome them with automated document processing. 

So, let's jump right into it:-

The impact and risks associated with manual document processing

Risks associated with manual document processing that prevent the business from scaling are:-

Risk 1: Inefficient and time-consuming processes

Inefficiency is one of the biggest downsides of manual document processing. Employees have to thoroughly read through the documents to verify the information provided.

Time consuming manual document processing

Identifying errors in documents and correcting them requires multiple approvals from different departments. As a result, manual document processing affects the productivity of the entire organization. 

Since manual document processing is time intensive, more employees are alloted to dispatch the papers faster. Employees also need to be compensated for longer working hours. Thus, in the long run, manual document processing ends up dragging down the ROI of the company. 

Inconsistent filling systems and improper storage systems can make it difficult to track down the correct paperwork and there are chances of misplacing important documents. Retrieving them and asking for replacements unnecessarily wastes valuable working hours. 

Automated document processing enables your employees to invest their time in other essential business activities. For starters, employees can focus their time and efforts to address the concerns of vendors and ensure timely payments to suppliers. 

Risk 2: Data errors and inaccuracies

There is always room for human errors regardless of the skillset of the employees. According to a report, the probability of human errors with manual data entry can be as high as 40%. Such a high percentage of errors in enterprise systems can create technical and financial bottlenecks for the organization. 

Inaccurate manual document processing

Highlighting and editing the errors present the organization with a different set of challenges. For example, while editing paper documents, employees need to keep the original version intact and prepare copies for correction. After that, they are responsible for keeping track of all the copies. 

Even if they spot errors early, the authorized employees still have to jump through a few regulatory hoops to make the corrections. This, in turn, delays other tasks. And, processing the documents without noticing the errors can cause significant risks in the supply chain

Entering inaccurate figures in the accounts payable system can delay the payments resulting in hefty late fees. Regularly making underpayments or overpayments can make the stakeholders lose faith in the management of the company. 

Document processing software reduces human intervention and ensures up to 99%+ accuracy with smart data validation. What’s more, for added accuracy, the software allows human-in-the-loop reviews. 

Risk 3: Security risks

Manual document processing leaves sensitive documents prone to security and data breaches. 

In the manual process, highly sensitive documents are handled by numerous employees. This increases the risk of exposure to confidential information. Now, a simple misstep or carelessness from employees can create data leakages. Similarly, disgruntled employees and document handlers can manipulate the data in the documents to cause harm to the company’s reputation. 

Security risks with manual document processing

Data captured from documents are stored in the local storage systems and behind simple firewalls. Hackers can easily penetrate single-layered security firewalls and steal this sensitive information. 

Automated document processing reduces the number of touchpoints and enables the system to handle more sensitive tasks. The document processing software allows users to set role-based access control for added security and audit trails. Tracing any unsanctioned changes to the document becomes easier. Enterprise-grade security and end-to-end data encryption adds an extra layer of protection for sensitive or high-security documents. 

Risk 4: Compliance risks

Governments are tightening security around data storage with new laws and guidelines, and these regulations are regularly updated. 

With manual document processing, employees simply can not keep up with all the compliances. Overall, it makes the company more vulnerable to litigation and penalties. Outdated document processing systems can land the business in lawsuits, especially the companies operating in the legal, identity, and finance domains. 

Let’s take a highly relevant example of enabling data privacy initiatives. 

Compliance risks with manual document processing

Data privacy is of prime importance for every organization. Along with the current GDPR, HIPAA, SOX Compliance, and other industry-specific regulations, businesses should be prepared to embrace tighter and newer regulations along with the existing ones being frequently updated. It is important to note that different areas have different privacy laws in place and organizations need to comply accordingly. For example, California Privacy Rights Act (CPRA) is one of the most comprehensive US privacy laws in the United States.

To comply with these regulations, you need a clear view of the state of your data and have the tools that ensure this data is secure and up-to-date. 

An automated document processing system provides high data integrity and ensures that the data is complete, accurate, and stored with administrative, physical, and technical safeguards so that the information is not deleted or tampered with. Adding to this, electronic systems can adapt to changing laws and regulations and safeguard customer data. 

Moreover, manual document processing makes it difficult to conduct external and internal audits. Conducting an audit with the physical copies of all the documents can be exhausting. The risk of misplacing or damaging the documents is also high during these audit processes. 

An automated document processing system can maintain audit trails and help the auditor during the investigation process. Additionally, the auditor can easily retrieve documents from online archives from the cloud-based document processing platform. 

Risk 5: Reduced customer satisfaction 

In case of customer queries, the organization should be well-equipped to retrieve the information. However, the process becomes tedious when employees have to sift through piles of paperwork to find the relevant documents. It ends up dragging the customer support process. 

Reduced customer satisfaction with manual document processing

Now, mistakes are inevitable. Hence, 78% of customers are willing to continue their association with the company even after a few mistakes as long as they have a solid customer support department. However, if you are continuously making errors and offering unsatisfactory solutions to your customer due to a mismanaged manual documenting process, your customers will not think twice before abandoning your brand. 

Automated documenting processes make it easier for your customer support executive to easily locate the documents and fast-track the process. The centralized repository of extracted documents serves as a single source of truth that can be accessed by relevant departments.

Automated document processing vs manual document processing

Automated document processing is definitely an upgrade over manual document processing. 

Processing a document manually takes hours and even days, and getting the approvals can take up to weeks. Here'a how automation takes upper hand over manual document processing:-

i) 10X efficiency

Automated document processing improves efficiency by 10X as the processing of documents across multiple formats happens within 30–60 seconds. Then, the processed documents are automatically sent to the relevant departments to get the approvals within the same day. What’s more, the processed documents are sent to third-party apps for further automation or processing. 

ii) Eliminates human error

Automated processing systems remove human intervention that directly reduces errors and inaccuracies. Ensuring security compliance is also easier with automated document processing. 

iii) Enterprise-grade security

Manual document processing is riddled with security vulnerabilities. On the other hand, automated document processing software use robust data encryption systems to keep private information protected. 

iv) Automated data processing

Finally, automated document processing systems instantly categorize the data extracted. Docsumo uses its proprietary NLP-based framework to categorize line items and key values. 

v) Cloud-based storage

Lastly, with manual document processing, you need to make multiple physical copies and store them in different folders while also safely archiving the original .Whereas automated or intelligent document processing software stores the information in the cloud which can be accessed anywhere, across devices. 

Automated Document Processing Manual Document Processing
Has a setup cost and monthly/yearly subscription. However, in the long-run, the ROI is high. No setup cost. But, it is expensive to maintain.
Can process documents within 30-60 seconds. Can take hours to process documents
Data extracted is 99%+ accurate. Inaccuracy could be up 40%
Data encryptions and cloud storage protect your private information from hackers. Data extracted from documents is often exposed to security breaches via multiple touchpoints.
The digital data is made compliant right from the extraction process. Employees have to ensure the manually digitized data is compliant with government regulations.


Docsumo is an intelligent document processing software that helps organizations replace manual document processing with automated workflows. 

Here are a few ways Docsumo addresses these risks. 

  • The system ingests and processes data within 30 to 60 seconds
  • The data extracted from the documents is 99% accurate
  • The Straight-through-processing (STP) is improved by 95%
  • Enterprise-level security 

To know more about how Docsumo automates document processing, sign up for a 14-day trial

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Automating Portfolio Management for Westland Real Estate Group
The portfolio includes 14,000 units across all divisions across Los Angeles County, Orange County, and Inland Empire.
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Pankaj Tripathi
Written by
Pankaj Tripathi

Helping enterprises capture data for analytics and decisioning

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