Only issue with paper is it can be slippery, so keep an eye on them to make sure no one is sliding around. Personally don't like having food and water that close together as the water can get splashed into the food, I'd probably stick the water up on a brick a little further away.
I separate the food and water so they don’t sling the crumbles into the waterer. Also, duck tape rolls work well to raise the height of the waterer to keep the pine shavings out. If it’s level to the floor they will kick so many pine shavings in it that it could wick all the water out of the bottle. If that is still too low, I keep a peanut can to use also.