Paper is everywhere.
In many small businesses, positions are created just to manage the flow of paper. Warehouse space is purchased to deal with the overflow of paper. The generation of bills, invoices and purchase orders slows down receivables and creates bottlenecks.
To top it all off, depending on your industry, the government requires you to maintain records for one or a number of years. You may be required to generate reports for the local, state or federal authorities. The legal process may make it feel like there is no place to turn.
As your business grows, the amount of paper grows with it. The more money that is put into paper, the less money that goes into growing the business.
Document imaging can solve your paper routing and storage problems. However, the legal aspects of these document imaging solutions often prevent a business from looking more closely at a paperless solution to its problems. So what can a lawyer do to help you in the transition to the liberation of a paperless future?
Develop a records retention plan
There is liability for both failure to keep and failure to destroy records and documents. Many small businesses will not make the jump to a paperless office because they fear valuable records will be destroyed. Yet, records and documents that could have, and should have, been destroyed are routinely subpoenaed and introduced into evidence to support adverse claims.
The company should consult an attorney specializing in document retention to properly protect itself and its document-based assets.
Maintaining documents in electronic form will comply with all local, state and federal laws. The small business client must develop a records retention plan that will govern when documents within the system are destroyed. A typical records retention plan will include a records inventory, records retention schedules, records disposition and records destruction procedures, inactive records storage, a vital records and disaster recovery program, a file management program and an archive to preserve historic documents.
Develop a course of business procedures
The Code of Federal Regulations (CFR) indicates which records must be maintained and how long they must be maintained. State laws also provide guidelines for the retention of certain classes of documents. Combined, the CFR and state laws apply to only 30 percent to 40 percent of documents a company generates. The remaining documents should be maintained according to the records retention plan of the company.
The Uniform Photographic Copies of Business and Public Records Act indicates that internal business procedures be followed, business practices be documented and corporate discipline (training evaluations and other HR files) be maintained. Developing and documenting a course of business procedures is critical to determining legal admissibility of records.
Two important considerations regarding the admissibility of any document are the trustworthiness of the records and the course of business procedures followed by the company. Document imaging systems can track documents using audit trails. This will ensure the trustworthiness of the records. Records may be destroyed in accordance with the company’s careful adherence to its policies and procedures for keeping and destroying records.
Finally, there are several safeguards built into an electronic document management system that will legally safeguard a small business. These include digital watermarks that will show if a document has been altered in some way and security systems that will prevent unwanted access or tampering by disgruntled employees.
To see if document imaging can provide legal or administrative assistance to your business, contact your attorney or document imaging professional. Jay G. Volk is Of Counsel at the law firm of Brouse McDowell in Akron, and can be reached at (330) 535-5711 or [email protected]. He is also the president of Workflow.com, a document imaging company located in Westlake.
