The Risks of Poor Record Keeping
Records management strategies help keep companies efficient and productive. Without a thorough, documented records management strategy, companies experience miscommunication and data loss. Discover what poor records management looks like and how you can prevent it at your company.
Ties Between Poor Record Keeping and Problems
Bad records management leads to problems with a rippling effect, and can be very serious when you need your records for things like taxes, budgets, or payroll.
Although it sometimes may go unnoticed it results in a range of consequences, and if not nipped in the bud early, it can potentially leave an impact as large as causing a company to close their doors.
Causes of Poor Record Management
There’s a couple of ways to tell if your record keeping practices need a tuneup.
By just asking yourself a few questions, you can see if your processes are putting you at risk for long term consequences.
How Quick Can You Track Things Down?
Can you find the exact location of any record at any time? If your record keeping processes leave your archives cluttered and disorganized, you can end up losing out on both time and productivity during daily work while you and your employees hunt needed information. Should you face legal action or audit, there are also laws that penalize companies for not giving information in a timely manner.
Do You Have Multiple Copies of Records?
Are there several versions of the same document circulating throughout the office? If so, revisions and edits made by different people may be lost, missed, or overwritten—making it difficult if not impossible to ensure all your records stay up to date and don’t lead to later discrepancies in numbers and information.
Do You Track Record Retention and Destruction Periods?
Are you aware of the retention times for your different records? Is there a plan in place for tracking them? Many types of business documents are required to be kept for a specific period of time by various laws such as HIPAA, and if you’re tossing out too early or hanging on too long it can lead to thousands of dollars in fines.
Do You Have a Backup Plan for Your Records?
What happens if there’s a fire or data breach, and suddenly all your records are lost? It’s important you have a backup plan for keeping copies of records in a second location, whether it’s using an offsite storage location, backup tape rotation, cloud storage, or a backup server.
Poor Record Keeping’s Effects
With poor record keeping at the center, there’s a range of risks that ripple outward in all directions.
Every type of information kept by businesses needs to be tracked for one reason or another, and if records aren’t managed properly, they can lead companies down the road to potentially crippling consequences.
Consequences of Bad Record Management
- Financial: When records slip through the cracks or aren’t properly tracked, companies can run into trouble with taxes and budgets—which then may ripple to handling payroll as well.
- Legal: If businesses face legal action or audit, disorganized record keeping makes it difficult to produce records in a timely fashion (against the law), and can lead to issues with retention tracking (also against the law).
- Productivity: When you and employees waste time looking for lost records rather than working, you lose out on efficiency and money (since time is money) and ultimately hurt your bottom-line.
- Data Loss: “Hope for the best, plan for the worst.” The larger businesses and their record archives are, the more important it is that there’s a backup plan in place for it their primary copies of records are somehow destroyed or lost—which can force companies to come to a grinding halt or even close their doors if they’re lost permanently.
Avoiding the Effects of Poor Record Keeping
Records management aids businesses in achieving better bottom-line results and improving overall efficiency.
By creating a well thought out records management plan and using a regular system audit and update process for your record keeping you’ll avoid consequences down the road.
Start By Putting a Plan in Place
The first step is deciding how you’ll store and manage your records.
For paper records, one option is off site storage, where facilities handle the management—including retention tracking from some providers.
When you have electronic records, cloud storage and document management systems (DMS) can provide automated retention tracking and file indexing for easy retrieval.
Time to Put Your Plan into Action
It’s important your plans cover all the bases, but don’t get analysis paralysis.
Once you implement your record management plan and train employees, you can establish a record of past approaches for you to compare as you plan for new records storage and management plans in the future.
Develop Disaster Recovery Plans
Accidents and natural disasters happen—and it’s important to be prepared if they do.
A good place to start is creating backup copies of your record inventory as a fallback.
For file and flood damage, records, backup tapes, and backup servers can be kept at an offsite storage facility with climate-control and fire-suppressant systems.
Self-Audit Your System for Accuracy
After the system is implemented and backups are made, it’s important to go back and document any issues or inefficiencies with your current record management plan.
Maintaining a regular process audit and update system will ensure that you can make changes to improve the efficiency of your records management.
Does Your Record Keeping Need a Tuneup?
Whether you need record storage and management or want your information backed up, there’s an option for that.
At Record Nations, we can help with offsite record storage, cloud storage and DMS, backup tapes, vaulting and other services. Call us at (866) 385-3706 or fill out the form on the right to get started.