There are financial and legal consequences for not managing your records, documents and enterprise information properly. These risks affect the whole company - not just legal or compliance:
Audit failures and fines. Failing an external or internal audit can lead to large fines or even the closure of your business.
Cost of Data Breach. As recently seen in the headlines, securing customer and employee data is ESSENTIAL in today's business place. However, without the right information management tools, you may not know which documents contain sensitive information. Paper documents also pose a grave security risk. It's time to look in those boxes in the break room or in that spare office.
Increased Data Storage Costs. Most companies that have not implemented an information management solution usually keep a data landfill on their network servers on expensive primary storage. It is typical for most large companies to have 30 terabytes of data that could be moved off of primary storage.
Increased eDiscovery Costs. According to RAND, the average cost of eDiscovery is $18,000 per Gigabyte! This cost can raise to as much as $30,000 per gigabyte for companies that are disorganized and have not implemented a proper document management system.
Headline Risk and Decreased Shareholder Value. Failing an audit and litigation issues can expose you to being spotlighted in the media. Public perception is immensely important for industries such as utilities that work with the public on a regular basis. Additionally bad press is known to decrease shareholder value of most public companies.
Criminal penalties for improper licensure. Without copies of licenses, a person can face jail time for operating without the proper license.
Inability to protect your business from theft. Without the right paperwork to justify claims, you may not be able to sue someone for copyright infringement or patent infringement.
Employee lawsuits. If an employee claims you acted in an illegal manner – i.e., a wrongful termination or a refusal to pay worker’s compensation – you won’t have much recourse if there is no paperwork to prove that you complied with the applicable laws.
Deals fall through. Losing or misplacing an important document can cause a major deal to fall through. Something as small as an old employee contract can hold up a transaction greatly reducing your chance for success.
Missed revenue opportunities. The best potential customer is your current customer. Keeping up to date with customer contracts and upcoming renewal dates is often neglected but easy to solve with a document management solution.
Poor Customer Service. Not being able to provide your customers with accurate information and speed of service are the biggest complaint from customer surveys. Improper information management contributes to both of these complaints.
Rising Cost of Physical Storage Space. As national real estate prices continue to rise, valuable work space that is occupied by boxes of paper documents is costly. Offsite physical storage poses even more of an issue.
Pay Extra Taxes. If you don’t keep records of estimated tax payments or don’t keep receipts for planned deductions, you won’t be able to claim these items on a business tax return and will have to pay more tax than is owed.
Tax adjustments after audit. If you get audited and don’t have paperwork to back up claims, the IRS may decide that you need to pay more taxes than you originally had to pay. There may also be costly penalties for the failure to file taxes appropriately.
In order to prevent these negative consequences, it’s important to find a service provider and technology partner that can help you develop a solution that works for your business. DocuLynx has the capabilities to address all of these concerns...and more!