Paperwork Reduction Act

Lessons to be Learned from the Paperwork Reduction Act

The Paperwork Reduction Act is a United States law that requires federal agencies to obtain permission before collecting vital personal data from the public. The law, which was enacted in 1980 and amended in 1995, was thought of as a first step to cut the red tape in government agencies across the country. The law also spawned a new office within the Office of Management and Budget, called the Office of Information and Regulatory Affairs (shortened as OIRA). This new office is designed to control and regulate the matters regarding federal information and also establish new information policies on the national level.

In other words, the Paperwork Reduction Act was designed to help and protect Americans who feel overburdened by the immense variety of forms and documents required by federal agencies. The PRA requires that, when any federal agency wants to collect data from more than ten people, it has to pass a particular procedure that has to be approved by a committee. This set of proceedings drastically reduced the number of forms required to gather information, guaranteed the safety of sensitive personal information and eased up the bureaucratic bottlenecks.

What can business owners learn from the public sector and the Paperwork Reduction Act?

Firstly, let’s see how the enactment of the PRA helped fight bureaucracy and increase office efficiency in the public sector. According to multiple studies undertaken after 1980, the PRA law has caused a slow, but regular decrease of paperwork used in federal agencies. Although the progress was slow, it was continuous and sustained. After the 1995 amendment of the law, the paperwork reduction was even more noticeable, the burden hours of paperwork falling by 30 percent until 2003. Agencies were also required to reduce their paperwork burden even more – up to a 25 percent decrease until 2010. New technologies were implemented – electronic filing of documents, digital signatures could be used for many forms, the archives were digitalized and new forms were seldom seen.

So, although there are plenty of critics, the PRA has produced some positive results in the public sector and the private sector should see it as an example of increased office efficiency.

When it comes to the private sector, the picture is not very much different. According to a study performed by the Rochester Institute of Technology, in 2008, the cost of paperwork related issues has risen to $2,000 per year per employee for companies with more than 20 employees. The private sector has the same problems: offices get bottlenecked with a plethora of documents, bills and statements. This bottleneck hampers worker efficiency as they file and search for new and old documents.

The solution for business owners is quite straightforward, and it was implemented before in the public sector:

  • Avoid the creation of new types of documents – if needed, new kinds of forms and documents should only be approved by the head office of the company to avoid increased paperwork. This will help you cut down paper-related costs as well as ink or printer cartridge related costs. Your employees will work more efficiently and won’t feel overburdened by additional paperwork.
  • The implementation of new technologies – the digitization of documents, bills, financial reports and statements is crucial when you want to reduce the paperwork in your company. Try to implement technologies like OCR, use digital archiving software and cloud computing, employ digital signatures for all your employees and make use of the numerous project management software packages available on the market. Although the change will be costly, at least at first, in the long run, you will reap the benefits of going paperless and your business will flourish.

Author: Flaviu Mircea is a small business owner who is always seeking ways to make his workplace more efficient. To help transition to a paperless office, he recommends making use of software like FileCenter from Lucion to make the switch. You can learn more about Flaviu on Google+.