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Are File Cabinets Putting Your Business at Risk?

May 27, 2016 08:00AM ● Published by MED Magazine

By Ritch Noble



The New York Times nearly learned a painful lesson about the dangers of maintaining paper-only records when a pipe burst in the sub-basement housing its photo archives.

Were it not for fortuitous timing and the quick work of a news assistant who spotted the leak, the entire photo catalog—which dates back decades and had never been digitized—could easily have been lost.

That averted disaster is a dramatic example of the importance of backup and digitization, but you don’t need to be sitting on a basement full of irreplaceable Pulitzer-winning photojournalism for it to matter. Most businesses still have vital records stored in a paper-only format.

Even if you’ve moved to fully digital processes for all of your important documents, it’s likely that your records from before the system was implemented are still sitting in a file cabinet or storage somewhere.

The reason for digitizing your records is simple: your paper documents are putting your information at risk, they’re costing you money, and they’re slowing your business down.


Physical is fragile

It doesn’t require a lot of imagination to think of ways that these documents could be compromised. Fire, theft, misfiling, the aforementioned flooding; any number of natural or human forces can render your paper records unsalvageable. True, these same events could also theoretically occur at a data center where your digital records are stored. The difference is that your physical files probably don’t have a redundant backup stashed safely in a different location.

So why does it matter? You’re hopefully not contending with fires and floods on a regular basis, and, if they’re mostly old records, it may not seem like a catastrophic loss. One problem is that even older records can be critical to ensuring that your business meets compliance standards.

Even if you’re not in a heavily-regulated industry there are plenty of scenarios where the loss of records can put your business at serious risk. You may need them for tax purposes, or to defend your business against litigation from a disgruntled employee or customer. The onus is on you to maintain this information, so “the dog ate my payroll records” is not an excuse that will fly with a Sarbanes-Oxley auditor.

Going digital retroactively and proactively

Luckily, technology has made it a relatively painless process to convert these documents to a digital format. You can even have the conversion done for you if you don’t have the time or internal resources to do it yourself.

Digitizing your old records will not only protect against the risks discussed above, it can speed up processes and provide easier access to vital information. Having these files in a digital format can make them available to remote workers and employees across offices.

Of course, the easiest way to ensure that you don’t need to worry about physical records is to implement systems that digitize them as they come in or use digital workflows to begin with. Transitioning paper-heavy processes such as employee onboarding to digital forms can improve record integrity and save time for both end users and HR. Many modern scanners even have the ability to seamlessly integrate with the cloud storage or a document management system.

Mitigating risk and increasing efficiency can obviously have financial benefits for your business, but digitizing records can save you money in more direct ways, as well. Between reducing paper and print costs, eliminating storage expenses and freeing up office space for other uses, digitization can have an immediate impact on your bottom line.

Ready to digitize your old records and streamline workflows going forward? Human Resources and Accounting are great places to start moving away from paper-based processes and take control of your information.


 Ritch Noble is the CEO and Partner of Active Data Systems in Sioux Falls. Noble focuses on services impacting document life cycle, document workflow, and managed document services.

In Print, Business, Today cybersecurity digital records

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