5 Common Paper Document Storage Issues (And How to Fix Them)

5 Common Paper Document Storage Issues (And How to Fix Them)

The proper storage of paper documents can seem so perfunctory, it’s not even worth reviewing, right?

Not so fast.

Take a moment to consider the sheer diversity in documents that federal and industry regulations dictate must be stored a minimum of three to five years — and often longer:

  • Annual financial statements
  • Income statements
  • Sales reports
  • Monthly bank statements
  • Tax returns and other tax records
  • Customer and client records
  • Payroll
  • Employee contracts
  • Business expenses
  • Accounts payable (AP) and accounts receivable (AR) invoices
  • Purchase orders (POs)
  • Business permits and licenses
  • Credit-card statements
  • Inventory summaries
  • Leases or mortgages
  • Proof of insurance
  • Shareholder or profit-sharing agreements
  • Bylaws
  • And many more

That’s a lot of paper to keep track of, and accidents are bound to happen, but it’s crucial to retain these files until legal and regulatory requirements are met for audit and tax purposes. Avoid them by knowing the top five issues with storing paper documents, plus what you can do to prevent each.

Issue 1: Time Wasted Looking for a File

Paper document storage courts perhaps the most inefficient method for document searching and retrieval timelines.This is a particular bane for departments managing a constant influx of paperwork, such as accounts payable and accounts receivable teams. Both these departments’ storage issues become an existential drain when employees cannot find the POs, invoices, banking statements, budgets and more so necessary for their work, causing missed payments, department overspend and overall poor financial administration.

The Solution

AP and AR-integrated enterprise resource planning (ERP) software is the natural remedy to phase out manual-based file sending, receiving, storing and retrieving inefficiencies.ERP systems with these specialized invoicing functions are especially beneficial for accounts receivable and accounts payable storage issues or similar teams managing your office’s finances. Top-tier software permits functions like instantaneous record indexing, simultaneous document viewing by two or more users, a searchable interface and document comparisons to quickly cross-reference data — all within the same system, and all saving serious time for your employees.

Issue 2: Lack of Physical Space

Safely and compliantly storing old papers requires space — and lots of it.
Paper-based storage means row after row of filing cabinets that are as clunky and outdated as they are risk-prone. Plus, organizations must find a way to harmonize individual filing drawers located at employees’ desks with larger departmental filing cabinets. This introduces even more ad-hoc inconsistencies in what gets filed where at what time, or results in employees making redundant copies of records that waste paper and budgets alike
Even on-premise digital storage courts spatial constraints. The physical hardware needed for robust digital records management and backup means a microcosm of drives, servers and other equipment located in dedicated IT areas.
In either case — file cabinet or digital — your office wastes premium space better put to use for employees and operations.

The Solution

Cloud-based document storage eliminates the need for most types of filing systems. Rather than store physical and digital records on-premise, files are saved in the cloud, meaning redirected to a network repository backed by off-premise servers managed by a cloud service provider.
Those cloud-service providers are therefore responsible for the data centers, servers, hardware maintenance, upkeep and security of the system — not you. You save space while also allowing remote document access from anywhere employees have an internet connection.

Issue 3: Data Security Concerns

Purely physical storage of paper documents opens your organization to significant data security risks. To begin, physical storage:
  • Has no way to know who’s seen or read documents.
  • Has no way to track a record’s complete movements.
  • Lacks control over document duplication and allows multiple copies to exist in disparate places.
  • Allows competing versions of the same document.
  • Exposes sensitive customer or enterprise data available for anyone to find.
Certain industries, in particular, face severe penalties if found mismanaging or inappropriately storing documents. For example, consider sensitive medical paperwork or customer records containing credit card information. Government and industry regulations set standards for how paperwork containing sensitive information or data must be handled, though small and large businesses alike still struggle to follow compliant criteria.

The Solution

Organizations have two solutions to defend against paperwork-based data breaches.
  • Internal data-management policies: Institutionalizing a document-management policy is essential for any workplace to begin handling records compliantly. Policies outline the exact steps employees should take when approving, saving and filing new records, as well as duplicating or deleting permissible ones.
  • Access-controlled document management software: ECM systems and similar platforms with user restrictions offer one of the best lines of defense against unwanted eyes accessing files. What’s more, digital document-management systems can flag and track which employees open what records, time-stamp that access and provide other storage defenses.

Issue 4: Lost Paperwork

Lost paperwork is a broad business woe. Saying a document has been “lost” could mean any of the following:

  • Paperwork was forwarded or passed along to the wrong person.
  • Paperwork or documents have been misplaced in the wrong filing cabinets or folders.
  • Data has been saved in the wrong computer file or folder.
  • Most pressingly, no one has any idea where a particular document went.

Disorganized, undefined document-management workflows cause the majority of lost paperwork problems. Without a clear system for receiving, filing and passing along documents for approvals, records fall prey to ad-hoc handling riddled with inconsistencies and lacking visibility.

The Solution

Using an automated enterprise content management (ECM) system creates a clear chain of movement for all incoming and outgoing business records.Think of these systems as a digital document breadcrumb trail. ECMs permit customized document-approval workflows for teams to manage their continual flow of paperwork, with each record routed exactly where it needs to be. What’s more, since the system is automated, employees are freed from much of the sorting, categorizing and tracking functions previously done manually, which pulled them away from higher-value work.

Issue 5: Potential Natural Disasters

Fires, floods, tornadoes, hurricanes and other natural disasters eradicate physical filing systems — and all your documents with them.
Depending on your business’ location, such natural disasters might be a significant operational threat. Buildings and spaces must be configured to account for safe document storage when these incidents strike. Yet even the most robust designs may not stand up to disasters or comply with strict storage of paper documents standards required for various industries. Once destroyed, lost records could permanently halt your operations and spell the end of your organization.

The Solution

To protect against losses from natural disasters, organizations should instate digital ECM systems with routine data backup, recovery and document redundancy. This technology ensures duplicate digital records remain available no matter what happens to your physical infrastructure.
For the most robust defenses against natural disasters, ECM systems can store documents in the cloud automatically, programmed from installation to perform these back-ups alongside other cloud-based cybersecurity best practices.

Automate Your Business Records-Keeping

Make sales, accounts receivable, and accounts payable storage problems a thing of the past — for these departments and all others allowing your organization to run like clockwork — with ECM software from Vanguard Systems.
Request a demo to see how much easier records management can be — and say goodbye to old paper storage permanently.

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