These days, small-business owners are all about innovation. Whether launching a hip new shop in a burgeoning urban area or bringing a struggling standalone retailer back into the black, managers are quick to employ cloud services, digital documentation and mobile devices to get things moving. 

But if this widespread movement toward tech is really so powerful, then why does research continue to show that small businesses still rely on paper to perform critical workflows and manage documents in hard copy? Let's look at why SMB owners and managers are sticking with paper in a tech-obsessed world. 

Sticking with the fundamentals 
To what degree are SMB leaders keeping paper in the mix? ITProPortal recently highlighted research from M-Files Corporation, which found that more than three-fourths of small and midsize companies use paper-based data management methods. Although 58 percent use a combination of paper and electronic methods, the message is clear: Paper offers a more reliable and intuitive way to handle business processes. 

"Over the past few decades, the transition from paper to electronic document management has not solved the issue of being able to quickly find the documents we need," said Julian Cook, director of U.K. Business at M-Files, according to the news provider.

Some SMBs have yet to incorporate any digital assets into their document management profiles, proving that a pocket of business purists are still operating on the paper standard. An impressive 19 percent of organizations use hard copies exclusively. The takeaway is that paper won't be going anywhere soon, even as technology appears to subsume the SMB landscape. 

A matter of risk and reward
It may seem like electronic document management is a fairly innocuous thing, but the reality is that many dangerous adversaries lurk in the digital realm and target small businesses. Financial data and private customer information are all highly valuable, and if stored in a database, may be stolen even without the knowledge of business leaders. 

The Identity Theft Resource Center recently published research showing that there was a total of 781 data breaches in 2015 – the worst year for security incidents since the first edition of the survey in 2005. While there's never a guarantee that paper documents won't be taken from within the walls of the office, it stands to reason that well-protected physical documents are a safer bet for backups in this uncertain digital environment. For important legal, tax and financial records, paper is the way to go. 

Paper made as simple as possible
Despite these clear benefits of paper in the SMB environment, hesitant owners will still look for ways around hard copies in the name of 21st century innovation, regardless of the facts. One of the most common misconceptions about paper in the modern business world relates to its procurement. Wouldn't it be easier to simply upgrade to a digital system? This is rarely the case, in fact, as ITProPortal noted. 

"All too often companies have just migrated their existing paper filing systems into digital form, and as a result are still suffering from the same drags on productivity," continued Cook, according to the source. "Yet in our world of immediacy, we need the right information when we need it."

The truth is that a streamlined system of paper order and fulfillment remains the superior and familiar method for small businesses everywhere, and digital filing systems often cause more problems than they solve. At the end of the day a balance between new and old will be the best approach, but as long as organizations remember the power of paper, they'll remain consistent at the core.