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October 7, 2022

The Real Cost of Manual Data Entry in Logistics

Every day, shipping companies around the world receive thousands of pieces of information that need to be logged and processed.

This data comes in from a variety of sources, including invoices, bills of lading, customer orders, and other trade documents. In the past, this data was entered manually into a company's system by data entry clerks.

Unfortunately, many small businesses in the shipping industry still rely on manual data entry to manage their logistics operations. In fact, as many as 46% of supply chain professionals still rely on excel spreadsheets for their operations.

Logging and processing this data manually is time-consuming and expensive. However, what you may not know is just how costly it can be. The cost of manual data entry errors can be downright crippling for small businesses in the shipping industry.

In this blog post, we'll take a closer look at the real cost of manual data entry in logistics and discuss some of the benefits of automating your data entry processes.

What Is Manual Data Entry in Logistics?

Manual data entry in logistics is the process of manually entering information into a shipping software or other type of logistics management system. It's often used by small businesses because it is a low-cost solution for managing logistics operations.

However, manual data entry is also a very time-consuming and error-prone process.

Every day, employees spend hours manually entering data into the shipping software. And every day, there's a risk that they'll make mistakes.

These errors can have major financial implications — particularly if they cause missed shipments, delays, or disruptions.

How Much Does Manual Data Entry Cost?

The cost of manual data entry can be divided into two main categories: direct and indirect costs.

Direct Costs of Manual Data Entry

The direct costs of manual data entry are fairly easy to quantify.

They include the wages of the employees, the cost of errors made, and the amount of time it takes to complete a task.

Let's look at an example to understand direct costs better.

Assume that the average data entry clerk earns an hourly salary of $15, and it takes them 15 minutes on average to manually enter one document in the system.

Without any errors, it would cost the company $3.75 to manually enter one document into the system.

However, data entry clerks often make mistakes, especially when under time pressure. In fact, according to research, the probability of errors in manual data entry is between 18 and 40%.

So, in our example, we'll lowball it and assume that the data entry clerk makes one error for every five documents they enter.

This would bring the total cost of a manually entered document to $4.50.

Now, let's say that the company only has to enter 10 documents daily. That would cost the company $450 per day in direct labor costs alone.

the direct costs of manual data entry per hour and per document

Indirect Costs of Manual Data Entry

The indirect costs are more difficult to measure because they don't have a direct monetary value attached to them, but they can be just as significant.

Indirect costs often fall into the category of “intangible” and can include things like employee morale, efficiency, and even customer satisfaction. While intangible, these factors can still have a very real impact on a business's bottom line.

Some examples of indirect costs are:

  • Missed shipments due to slow or inaccurate data entry
  • Delays in order processing
  • Inaccurate inventory levels
  • Dissatisfied customers
  • Damaged reputation due to disruptions in the supply chain

All of these factors can lead to lost revenue and higher operating costs, and they shouldn't be ignored.

The good news is that there are ways to reduce or eliminate the costs of manual data entry.

indirect costs of manual data entry are issed shipments, delays in order processing, inaccurate inventory levels, dissatisfied customers, and damaged reputation

Manual vs Automated Data Entry

A recent survey found that up to 40% of industrial professionals feel they are not able to access useful data quickly enough to make better, informed decisions.

This is often because they are relying on manual data entry methods or keeping data documents in paper form, which can be time-consuming and prone to error.

Automating your data entry process may require an upfront investment, but it will quickly pay for itself by reducing labor costs, mistakes, and disruptions.

It's time to stop overspending on manual data entry by automating your processes.

How to Automate Data Entry in Logistics

According to a report from Goldman Sachs, businesses spend over $2.7 trillion in B2B administrative costs – 80% of which are paid by SMBs. However, they also estimate that SMBs could make the most out of automating data entry, reducing their costs by up to 75%.

Data entry automation can take many forms, but the most important thing is that it reduces or even eliminates the need for manual data entry.

If you’re ready to take the plunge and automate your data entry, you should keep a few things in mind when choosing an automation solution. It should have the:

  • Ability to integrate with your existing systems
  • Flexibility to adapt to changing needs
  • Scalability to grow with the business
  • Robust security features
  • Easily understandable interface

The benefits of automating data entry are numerous, but the most important is that it can save your business time and money. With the right solution in place, you can focus on more important tasks, and leave the data entry to the software.

Automate Data Entry With Cargoflip

Paperwork is a necessary evil in the shipping and logistics industry, but it doesn’t have to be time-consuming or expensive.

If your company is still spending thousands of dollars inputting data by hand, it's time for a change. Cargoflip can help you turn your documents into digital files in minutes and say goodbye to the high costs of manual data entry.

We offer a comprehensive suite of features that covers all aspects of the shipping process, from quotes and bookings to invoicing and tracking.

Schedule a demo today to learn more about how Cargoflip can help your business automate data entry and remove friction in your logistics operations.