Records management is the organization, storage and archiving of documents, both electronic and paper. Record management systems are not always the core functions of businesses and organizations, yet these systems are crucial to the proper running of a company. Poor records management has very negative effects, both legally and for the well-being of your organization. As a result of federal recordkeeping regulations, organizations are beginning to take records management seriously.
Bad records management results in spending too much time in locating misplaced files. Misplacing important files and documents can incur losses in terms of expending resources in searching for these files. Customer satisfaction will also be jeopardized if you cannot access information promptly and meet customer needs. A backlog in the business operations can also result from poor records; for example, when processing checks, paying taxes, gaining tax returns and inventory management.
Failure of Compliance
Poor records management exposes you to legal consequences, due to non-compliance with federal regulations on records management. There are many pieces of regulation regarding records management; for example, the Information Management Compliance U.S. Federal Sentencing Guidelines requires that you put a proper record management program in place in your organization. The Sarbanes-Oxley laws also require companies to maintain financial records for auditing purposes.
Poor Management Decision Making
Management decisions are made with reference to company records. This means that without the proper documents, an organization risks making unfounded decisions resulting in losses, corruption and mismanagement. Good records are directly linked to increased transparency and effective corporate governance.
According to a study entitled "Worldwide Email Usage Forecast, 2002-2006: Know What's Coming Your Way," the number of email messages sent per day has grown from 31 billion in 2002 to 60 billion by 2006. With this amount of electronic information, bad records management can easily overwhelm an organization’s capacity. Information overload will bring an organization to a standstill. Proper management, on the other hand, ensures that information is kept in control.