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
- 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
- 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.
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
Issue 3: Data Security Concerns
- 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.
- 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.
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.