According to a survey commissioned by Cleardata, 66% of UK businesses could be putting themselves at risk due to a mismanagement of paperwork. Many have no document management strategy, meaning that lost paperwork is a common issue. However, it also opens them up to more serious threats like GDPR fines.
Storing important documents
The research revealed that 44% of businesses use storage lock ups or self-storage facilities for keeping important documents. A further 22% say they use basements or lofts despite the risk of flooding and damp. Another 17% say they use garages or sheds instead.
David Bryce, managing director of Cleardata says, “Our research found that many businesses are archiving critical business documents in weird and wonderful locations including sheds, basements and lock up garages, for an average of just over ten years. This can leave vital and sensitive information open to theft and damage and also make it difficult to find quickly if needed for legal or data compliance purposes.”
Only 33% of businesses said that they actually use a purpose built secure archiving facility.
How long most businesses keep documents
The survey found inconsistent results when respondents were asked how long they kept documents. The answers ranged between six months to over 100 years.
Generally, business records are best kept for around six years. This is particularly true for financial records as HMRC may want to see them at any time should they want to investigate you.
Some businesses are keeping documents longer than necessary which leads to growing costs as they have to pay for space to keep them. On the other hand, others are getting rid of documents too soon that they should really be keeping for reference or even legal reasons.
Smaller businesses tend to hang onto documents longer than larger businesses, at an average of 12.25 years compared to 8.08 years.
Of the types of paperwork kept the longest, trademark and IP documentation were at the top at 15.17 years, followed by employment records and contracts at 13.25. The paperwork found to be held for the shortest amount of time was recruitment records such as job application forms which were held on average for 8.4 years.
Mr Bryce also commented: “Although we live in an increasingly digital world, historical and new paper based documents still need to be kept safely and managed effectively. But a staggering amount of UK businesses simply don’t seem to know what to do with them and underestimate the risks that this can create.”
In May this year the General Data Protection Regulation (GDPR) will come into effect throughout the EU. GDPR will affect how data is stored and moved around as well as cyber security issues and database vulnerabilities.
You may think that this has nothing to do with paper documents. However, the GDPR states:
“Personal data must be kept in a form that permits identification of data subjects for no longer than is necessary for the purposes for which the personal data are processed. Personal data may be stored for longer periods insofar as the data will be processed solely for archiving purposes in the public interest, or scientific, historical, or statistical purposes.”
This goes for all documents, either stored digitally or in hard copy. While it may seem that holding records for longer is better or safer, you could risk breaking the law once GDPR comes in. The fines of falling foul of GDPR could be drastic, with fines of up to €20,000,000 or 4% of total turnover so you may have to rethink how you store and manage your data.
Do you have a system for storing documents? Are you prepared for GDPR? Let us know your thoughts.
About The Author
An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.