Most companies create and keep too many records and, ironically, put the organization at greater risk- the risk of keeping records too long. Any record that is being maintained and managed by a company can be subpoened and used by opposing legal counsel to harm the organisation.  By establishing a practical, appropriate and systematically applied records management and retention policy, most organizations depending on the age of the business, can identify and begin destroying 20% to 30% of their existing records.

  By breaking habit-based practices and applying and maintaining an efficient records management program, which includes a records retention scheduling policy, organizations can realize not only short and long term cost savings, but improvements in work process productivity. Easily implemented records management strategies and practices provide three significant benefits and measurable values to any business or organization:

• Improved access to needed information (documents, files and records). Appropriate indexing standards and applied retention practices are critical when searching for information. Retrieval time can be cut dramatically when improved operating controls are in place. A solid records management program allows for obsolete records to be appropriately identified and destroyed, allowing needed documents, files and records to be accessed quickly.
• Reduced legal and audit risks.  The risk of lost, missing or smoking gun records are eliminated when you standardize indexing and retention practices. When doing things the right way, you keep only the records you truly need to meet operational and regulatory requirements.  A fully cited and applied records retention schedule outlines which records an organization has and which have been identified for destruction and destroyed during the normal course of business policy and operation.

• Reduced records storage volumes and costs.  Standardized indexing practices and applied retention schedules reduce costs in real-estate, labor and capital expense.

Once an efficient records management program is implemented, organizations will be able to respond quickly to legal and audit request and demands.  Equally important, they will be able to avoid the embarrassment and costs of not being able to produce needed documents, files and record series.  When records do not exist (because they no longer have to), these companies can show proof of policy and compliance and state confidently why and how the records had been identify and destroyed.

At Data Storage we have developed an inexpensive procedure for phasing in a strategic records retention policy.  After decades of neglect the sheer volume of records stored and needing review and destruction can make rolling out a retention practice time consuming and expensive.  We propose doing this big job with our Strategic Records Retention service. 

By doing records retention chores in a strategic manner we target the record series most likely to limit your liability and expenses most and focus on completing retention work for that series before moving to the next most productive target and repeating the process. 

To learn more about the steps involved in strategic records retention, check it out at http://www.datastorageinc.com/srrs.asp

Here at Data Storage, our man Dymian Kritikos (D!) is always saying, "Hope is not an audit strategy."  Time and time again we see companies that have no records management policy or procedures.   D constantly worries about these organizations.  When times get tough, these companies suffer.  Big time.  In the event of natural disasters, often vital records cannot be found.  These records might help the company collect on debts, borrow money for recovery or defend in legal actions.  In the case of audits, it's unbearable.  Audits are already an expensive, stressful proposition with the best records keeping practices.  With no records keeping strategy, it's a nightmare.  

Here's another nightmare.  Arrow Trucking of Tulsa, OK recently filed bankruptcy and is in big trouble.  No one in that organization can produce even the most basic financials. 

From the Tulsa World.

Patrick J. Malloy III, bankruptcy trustee in U.S. Bankruptcy Court for the Northern District of Oklahoma, said Arrow Trucking’s Chapter 7 bankruptcy filing last Friday is without precedent. “We don’t have a schedule of assets, a schedule of liabilities and a statement of financial affairs,” he said. “Anyone who would be capable of providing that is not available. We’re going to have to reconstruct everything. It could take weeks.”

What little value is left in the $500 million dollar company will likely be eaten up in legal fees and forensic accounting.  How far does it go before the officers in the corporation are called on the carpet?   Oops, it's already happening.  Again from the Tulsa World.

"Transportation Alliance Bank..... filed a lawsuit against Arrow and its executives last week, alleging double-billing of invoices, bank fraud, wire fraud and “racketeering” activity that cost it $12.5 million."

Hope is not a records strategy!

For many document types, scanning or imaging doesn't make dollars and cents sense.  Often, records can be stored in a traditional commercial records center for their entire useful life for approximately 1/10th of the cost to image them.  If records are no longer in use and need to be maintained for a relatively short time (5-10 years), standard archive records storage can be a great solution.

When storing records for compliance purposes, the records must be protected from pests, humidity and heat.  Inventory controls must be maintained and retention and destruction needs to be managed very carefully.  In order to meet these basic requirements, (without imaging) some choices need to be made.

 1. Where are the records going to be housed?

 2. How are going to control our records inventory?

 3. How are we going to manage records destruction?

 To get started, we'll just talk about picking a location for a business document archive.

Archive storage choices we see the most include self storage, shop space and of course office space.  Self storage is the most common.  It offers a fair amount of security.  Most self storage facilities are gated and have on site custodians that keep an eye out for trespassers.  Self storage units are also locked and access to the units can be controlled by the document manager by just being stingy with the key.  Self storage units are often one of the most economical ways to obtain space as well.  No other semi-secure space can be had in 80-100 square foot increments at such reasonable rates.

The drawbacks of storing records in self-storage are a little disturbing in my mind.  The chief of these is not knowing what is being stored in the unit next to yours.  The whole point in maintaing and keeping these documents is to protect your organization from liability, provide proof of transactions, etc.  If someone runs a meth lab out of the unit next to your records, your records could be burned, damaged or irreparably contaminated by harmful chemicals.  I have seen spills of gasoline; paint and petroleum products in neighboring units seep under walls and damage or destroy documents many times. 

Self storage units are also difficult to keep clean.  Dust, insects and moisture are constants in this environment.   This makes the self storage less than optimal for maintain viable archives.  The dust and moisture necessitate the use of shelving to get the records off of the ground to protect from ants, termites and water. 

The purchase of shelving and the transportation needed to haul records cartons to and from the storage unit further add to the inconvenience and expensive of this arrangement. 

So,

 Security, Not optimal

 Cost, check

 Protection from environment, Unsatisfactory

 Convenenience,  Not Optimal

 In the next post we'll discuss shop space as an archive facility.

The short answer is scan the active stuff and store inactive records.  

Scanning allows for easy sharing and manipulation of documents.  Collating, stapling, filing, pulling records and interoffice mail are completely eliminated when records are scanned.  Additionally, documents are easily shared after they are scanned, so, organizations with several locations can improve efficiency considerably with scanning and EDM. 

Records that are very active and require a great deal of handling offer the quickest return on investment for scanning.  

Studies we have done with our customers show that to pay a bill in the typical accounts payable process costs $8 - $12.  Filing, collating, various invoice and purchase order approvals, copying and other tasks drive this cost up.  Scanning can reduce this cost to less than $2.    We find that companies often cannot claim prepayment discounts with vendors because their accounts payable processes is simply too slow to make the 1% net 10 or 15 deadline.  One food wholesaler we helped institute scanning saved over $2,000/month in prepayment discounts alone.

Records that are scanned require no filing. (Duh)  One wholesaler and leaser of industrial equipment we help, (if you’d like to talk to them about us, call me and I’ll put you in touch with them) creates about 4,000 work orders or sales tickets per day, each of which is proof of a sale and a lease agreement.  It used to take an army of clerks to file each of these orders.  Now the records are scanned or imaged.  They are also indexed (tagged with keyword search terms) with transaction number, date, customer name, etc. so they can be located easily.  This process is saving the customer over $7000 per month.

To sum up, if there is a great deal of sharing records, if it takes more than 1 or 2 people to complete a record (payment approvals is a good example), if there is a lot of filing, or pulling records, consider imaging/scanning your records.