Is Proper Records Management Really Important? The Law and the Bottom Line.

Business information is one of the most valuable and important resources that an organisation possesses. Legal documents, accounting files and client and personnel records, to name but a few, are some key records that require a proper paper trail, traceability and good accessibility. But how many businesses really expend the requisite time and energy into managing their records in an efficient, cost effective and legally compliant manner? Many companies have dedicated Records Managers but, as Irene Brown, Managing Director of Mitech Systems points out, their job is often beset with obstacles: “Many individuals view RM as at best arduous and at worst as an unnecessary distraction from achieving the aims of their organisation in terms of revenue generation and customer service. This leads to vital records either not being properly retained or, in some cases, discarded altogether. The result of this could be, in the worst case scenario, a lawsuit being bought against the company from an individual or even from the Information Commissioners’ Office”. The ICO is certainly not toothless when it comes to enforcing proper data retention rules. In 2010 it was given the power to issue fines of up to £500,000 for serious breaches of the Data Protection Act. Many breaches and subsequent fines are the result of organisations not taking proper care to store their paper and electronic information securely and with proper attention to legal retention guidelines.

As well as the legal risks associated with not retaining data properly or for long enough, retaining it for too long can result in the same charges of improper records management. Organisations often adopt a ‘better safe than sorry’ attitude to record retention, which generally involves keeping absolutely everything forever. Ironically, this leaves them vulnerable to legal action in and of itself! Needless to say, thorough and detailed knowledge of retention laws as well as a properly managed retention and destruction schedule can potentially save thousands of pounds. Find attached a helpful retention guide courtesy of Mitech Systems to help you avoid these pitfalls!

As well as the cost saving associated with risk mitigation, there are also more obvious sources of revenue conservation. Having records stored on site, especially considering the cost of per square foot renting in most cities, places a considerable fiduciary burden upon a company or organisation. Storing offsite can cost as little as 20p a box, and the organisation also benefits from the accumulated knowledge of excellent records management that third party companies possess.

All in all, proper records management is becoming increasingly vital in the contemporary commercial sphere. Therefore, implementing records management best practices reduces risk and liability and the costly consequences associated with improper RM.