Record keeping is basically the function of storing, managing and shredding business records in a secure manner for easy accessibility, reliability and security. Record keeping is highly beneficial but poor record keeping can also result in greater risks. The most obvious risk of not keeping proper records is that the business concerned will lose control over its most valuable asset - Information.
Imagine if decisions are made out of wrong information, stocks and fixed assets are stolen and not reported, important records are lost or misplaced, competitors get to know about your valuable move etc. Record Keeping – if not done right, the losses are irreparable. What’s worse? A business could lose the confidence of customers, attract fines or penal actions from legal or regulatory bodies, some businesses could even be shut down.
Here are a few other consequences of poor record keeping.
1.Improper utilization of Time and Space:
If records are not sorted out properly, countless hours of time could be spent in the process of unnecessarily sorting out messy file cabinets. This will result in loss of productivity and time as employees search for misfiled or lost records. The employees end up duplicating records or re-creating documents which may add burden to the already disturbed value chain.
Also, office space real estate is very expensive from a commercial point of view. If that prime real-estate is used to store mountains of paperwork, companies fail to utilize valuable resources appropriately. Other decisions such as in-house records storage or a rental house using employees who are not specialized in records management, increases the cost of records storage and brings down employee morale.
2. Disrupted Flow of information:
Records be it physical records or digital records, are the backbones of any functional organisation. Not maintaining proper records affects the seamless flow of information and communication across an organisation. This results in delayed decision making, complications with vendor-client relationships, missed business opportunities and irreparable financial losses.
Businesses then spend their time, attention and allocated resources on mending the information flow than progressively moving ahead towards the bigger picture envisioned. Especially at an era of VUCA – vulnerability, uncertainity, complexity and ambiguity businesses must focus on building organizational resilience to sustain growth and thrive. Not the other way around.
3. Risk of Losing Customers Trust & Loss of Reputation:
An email exchange about overlooking pre-agreed terms, or a wrong payment, or a missed deadline - It only takes one or two incidents for our customers, vendors, partners, suppliers and regulatory authorities to understand that our internal records management are not maintained properly.
Businesses have lost hard-earned trust of their clients for even minor things. What’s even pity here is that we help our competitors win our missed opportunities. With the implementation of a systematic record keeping and timely retrieval of records, the compliance is put in place. Record keeping compliance provides a more transparent and trustworthy relationship between businesses and customers.
4. Loss of Knowledge and mishandling information:
Without the existence of records about every single process, workflow and control the pragmatic knowledge of running an organization largely relies as knowledge within the people. If there is no checklist for creating records, storing them and timely retrieving them, a vast amount of knowledge gets lost when people leave the organization. A systematic records storage and records management system must be put in place to capture and use knowledge for the growth of the organization.
Simply shrinking, tearing and throwing records over bins are for the worst. Records are valuable in protecting the competitive advantage of a business. If a business has no control over copying, distributing and safely destructing records, then the competition’s job is simply made easier in understanding our next move.
5. Missing to Meeting Compliance:
Businesses struggle to keep up pace with competitors and take their fair market share in a volatile economy. The least they expect is anything that pulls them back from moving ahead. Failing to meet records-keeping compliance attracts inquiries, penalties, legal actions and loss of many things.
Knowing your business-industry specific record keeping requirements is of prime importance. Consult the industry regulatory body and a records and information management consultant (RIM) to understand your business obligations from a record keeping perspective. Understand the kind of files you require to maintain, methodology to handle and store records, retention schedules, reporting formats to maintain etc.
Having understood these risks associated with poor records keeping, implement a systematic records management with professional assistance from KAYMAN Records Management – The trusted records storage and management company in Chennai. Their document storage facility is state of the art, all-season proof, fully secured with scalable storage needs.