A records management system is an essential part of a business’s day-to-day work and centers around making sure companies can maximize their work efficiency by ensuring all their records are easily accessible, filed appropriately, returned to the right place, and backed up regularly.
Learn more in this video about what makes organized records management important, including details like the various direct and indirect symptoms of poor records management as well as some of the most common problems with records management programs and how to solve them.
What Makes Organized Records Management Important?
Poor records management leads to problems with a ripple effect. It can be very serious when you need your records for things like taxes, budget, or payroll.
While symptoms may go unnoticed at first, bad records management leads to a range of consequences. If it’s not nipped in the bud early, it can potentially leave an impact as large as causing a company to close its doors.
Therefore, it is essential that you know the symptoms of poor records management to look for.
The Consequences of Poor Records Management
- Lower Productivity
When information isn’t organized and well managed, valuable time is wasted in trying to both track down needed documents as well as refile them.
While it might only be a few minutes here and there, the time and money (time=money) wasted will add up.
- Financial Risks
Without a well-organized records management plan, important financial records are at greater risk of being lost. In turn, it can lead to problems managing taxes, budgets, and payrolls.
- Legal Issues
In the event of any legal actions or audits, disorganized records can make it difficult to find records in a timely fashion. When it comes to legal record retention times, the chances of missing required destruction dates are far greater.
- Data Loss
When records management systems don’t include a plan for backing up data in case of disasters like data breaches and fires, recent data from FEMA found that 40%-6% of unprepared businesses will never reopen following catastrophes. Of the businesses that can keep their doors open, 90% will be closed within a year if they can’t be up and running again in 5 days.
Symptom 1: Are You Unable to Track Records Down Quickly?
Symptom 1: Are You Unable to Track Records Down Quickly?When evaluating your current records management system, the first question to ask yourself is how long it takes to track your documents down.
If the answer is that it takes a long time, then it probably means you’re wasting money on the time spent by employees trying to hunt down and refile records. If you’re ever audited or face legal action for being unable to produce information, it can leave you in hot water.
How to Make Records Easier to Find
Simplify finding, tracking, and using records using one of these alternatives to in-house document storage.
Off-Site Records Storage
When file boxes are stored at an off-site facility, they’re barcode-labeled so they can be tracked by providers and retrieved upon request. The actual work of keeping files organized and readily available is taken care of by providers. In turn, it lets you and your employees use your time more efficiently.
DMS and Cloud Storage
As soon as digital files are added to a DMS or cloud storage system, they’re immediately indexed and organized so that they can be quickly tracked down. Many systems have a variety of ways to help find files as name searches. In addition, filter tools sort files by things like name, date created, and file format.
Symptom 2: Do You Have Multiple Copies of the Same File?
A common issue, especially with paper records management, is having multiple copies of the same file. It often leads to rippling—and unknowing—consequences.
When multiple copies of the same record are being circulated, there’s a good chance edits from at least one of the different versions will be lost. This means that when tax season comes around and you start reviewing financial documents, you might not be seeing the correct information.
How to Consolidate Multiple File Copies
Since having multiple copies of the same file tends to be an issue that primarily affects hard-copy records management, one of the best solutions to the problem of edits being lost or accidentally overwritten is to scan the paper records and create a new digital version of the original file.
With a digital file, it doesn’t require printing out a new copy of a document to make changes. Instead, all updates are applied to the original digital file just like with any .doc, .pdf, or other file format where there’s always the ability to save edits to the existing file as you go.
Symptom 3: Are You Tracking Retention & Destruction?
Many types of files have legally required retention and destruction periods. The requirements are laid out by laws like HIPAA and FACTA.
Retention and destruction requirements set specific guidelines for how long to keep different types of records and when they need to be destroyed. They are important for helping to regularly clear out the clutter from old records. Also, failing to comply with them can result in hefty fines or even jail time.
How to Stay on Top of Record Retention & Destruction
Trying to store and self-manage retention can be complicated. Off-site storage and DMS or cloud storage include retention tracking as part of the package:
Paper Records Retention Tracking
When records are stored at an off-site facility, you simply designate which boxes need to be tracked and for how long. The boxes are then barcode-labeled with retention times and other unique identifiers by providers. They can be tracked through the records’ required lifespans.
Digital Records Retention Tracking
With DMS software or cloud storage, retention tracking can also be configured. An automated system can be set up to run daily and delete all records with expired retention times.
Symptom 4: Do You Have a Backup Plan for Records?
It’s good to always have a positive attitude and hope for the best. However, it’s also important that you plan for the worst with your records management plan.
More specifically, there’s a range of potential risks to consider with records management. This stretches from physical hazards like fires and theft to crashed hard drives and other electronics. As a result, your plan must include steps to prepare for when a disaster inevitably strikes by regularly backing up data.
How to Ensure You Always Have a Just-In-Case Copy
All records management plans should include a system for regularly backing up data as a fallback. When it comes to backing up data, any well-put-together records management will include the backup rule of 3.
The “backup rule of 3” is a recommended strategy where data is backed up to three separate locations. Therefore, even in the extremely improbable event of two disasters happening simultaneously, there will be a 3rd copy safely stored. Backup methods include:
Do You Recognize Any of These Symptoms of Poor Records Management? Record Nations Can Help!
Join General Mills, Allstate Insurance, and the countless other businesses we’ve helped to develop and improve their records management programs. Fill out the form, give us a call at (866) 385-3706, or contact us directly using our live chat. Within minutes, you will receive free quotes from our experts in your area.
