Common records management mistakes to avoid

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These common records management mistakes to avoid are costing companies serious cash.
Data breaches hit companies with average bills of $4.88 million. It takes most businesses 194 days just to figure out they've been hacked. About 28% of companies got hit with breaches in recent years - many could've been prevented with better record handling.
Papers used to live in filing cabinets, and that was that. Now companies juggle physical files, emails, cloud storage, databases, and whatever else their IT department dreamed up last month. Mess up any piece of this puzzle, and the whole thing comes crashing down.
The biggest common records management mistakes to avoid
Some companies still think records management means buying more filing cabinets. These are the same folks who wonder why their insurance premiums keep going up and why lawyers send them scary letters about compliance violations.
Business partnerships make everything worse. When one company in a supply chain gets hacked, everyone feels it. 98% of businesses work with at least one vendor that's been breached recently. Your records are only as secure as your weakest business partner's records.
Stuffing everything into the office storage rooms
Walk into most small businesses, and you'll find a room (or several rooms) packed floor-to-ceiling with boxes of old files. The owner figures this saves money compared to paying for professional storage. Wrong.
Office storage eats up expensive real estate that could be used for revenue-generating activities. Temperature swings damage documents. No real security means anyone can walk in and grab confidential files. When employees waste time digging through boxes looking for one specific contract, that's money down the drain.
Professional DMS in business environments cost less than most people think, especially when you factor in the space costs, climate control, security systems, and employee time you're already paying for with in-house storage.
Winging it on retention schedules
Most businesses keep documents based on gut feeling rather than actual requirements. Someone thinks they should keep tax records for seven years, employee files "just in case," and client contracts forever because you never know. This approach guarantees you're either keeping stuff too long (expensive and risky) or tossing things too early (potentially illegal).
Different types of records have different rules. Data retention policy requirements change based on your industry, location, and what kind of business you run. The data retention period for payroll records in California is different from the requirements in Texas, and both are different from federal requirements.
Record type |
How long to keep |
Why it matters |
Tax documents |
7 years minimum |
IRS can audit up to 6 years back; 7 is safer |
Employee files |
Keep 5-7 years after they leave |
Wrongful termination lawsuits, unemployment claims |
Contracts |
7 years past expiration |
Breach of contract cases, warranty disputes |
Medical records |
Depends on the state, usually 5-10+ years |
Malpractice claims, patient requests |
Treating security like an afterthought
File cabinets with broken locks, shared passwords, documents left on printers - it's like leaving your front door wide open with a sign saying "valuables inside."
Healthcare companies learned this lesson the hard way. The average breach cost for them runs around $7.42 million. That includes lawsuits, regulatory fines, lost business, and the PR nightmare that follows.
Modern electronic document management system setups build security into everything. Who accessed what document, when they looked at it, what changes they made - everything gets tracked automatically.
Operational problems that kill productivity
Bad records management makes everyone's job harder and kills productivity in ways that might not show up on any report but definitely show up in your bottom line.
Random filing systems that make no sense
Ever tried to find a document in someone else's filing system? Some files get named by date, others by client, others by project, and the rest seem to follow a system known only to whoever set it up (and they left the company three years ago).
Employees spend way too much time hunting for files instead of doing actual work. Inconsistent naming conventions turn simple tasks into treasure hunts. When someone can't find the contract they need for a client meeting, that meeting goes poorly, and clients notice.
Good systems have rules that everyone follows, every time. Client name goes first, then project type, then date - whatever works for your business, but it has to be consistent across every department and every employee.
Ignoring digital files completely
Some companies spent so much effort organizing their paper files that they forgot about the emails, PDFs, databases, and cloud storage accounts that actually contain most of their important information these days.
Email is the worst offender. Everyone treats their email like a personal filing system, keeping important business communications mixed in with lunch plans and vacation photos. When someone leaves the company, decades of business correspondence walk out the door with them.
DMS in accounting and other business functions need to cover everything - papers, emails, databases, cloud files, the works. If it contains business information, it needs to be managed properly.
Legal problems that can shut you down
Regulatory compliance isn't optional, even though lots of business owners treat it that way. When regulators come knocking, "we didn't know" isn't a defense that holds up in court.
Data retention requirements by industry vary wildly. What works for a retail store won't work for a medical practice or a financial advisor. Get it wrong, and the penalties can put you out of business.
Throwing sensitive documents in the regular trash
Competitors, identity thieves, and others regularly go through business trash looking for anything useful. Bank statements, customer lists, employee records, strategic plans - all of it ends up in regular dumpsters where anyone can grab it.
Simply deleting computer files doesn't work either. Any decent data recovery service can pull "deleted" files off hard drives, and lots of criminals know this.
Proper destruction means industrial shredding for papers and complete data wiping for electronic media. Keep records of what got destroyed and when - you'll need this documentation if anyone asks questions later.
Never training employees on proper procedures
The fanciest records management system in the world is useless if your employees don't know how to use it or don't understand why it matters. Most people see records management as busy work that gets in the way of their "real" job.
Training needs to cover the practical stuff (how to file things, how to find things) and the big picture (why proper records management protects everyone's job). Make it clear that everyone's responsible for following the rules, not just the office manager or IT department.
Building better practices that actually last
Fixing common records management mistakes takes more than just buying new software or hiring more staff. It requires changing how the business thinks about information and making records management part of everyone's daily routine.
Start with best practices for data retention that fit your specific industry and situation. Create a corporate document retention policy that people can actually follow (complicated policies get ignored).
Check up on things regularly. What worked last year might not work this year if your business has grown or regulations have changed. Schedule quarterly reviews to catch problems before they become emergencies.
Good records management pays for itself through lower insurance costs, fewer legal problems, better efficiency, and easier decision-making. Companies that get this right have a huge advantage over competitors who are still stuffing everything into storage closets and hoping for the best.
Stop Making These Expensive Mistakes
Records management problems don't fix themselves, and they get more expensive every year you wait.
KORTO helps businesses get their documents under control without breaking the bank or disrupting daily operations. Don't let poor records management kill your business.
Thousands of companies trust KORTO to keep their documents safe and compliant.
5-second summary
Businesses today juggle physical files, emails, cloud data, and more — and even one misstep can lead to multimillion-dollar breaches and legal trouble. Common mistakes include inconsistent retention schedules, weak security, ignoring digital files, and failing to train employees properly. These errors waste money, expose sensitive data, and put companies at risk of non-compliance. By implementing clear policies, consistent naming systems, secure storage, and regular training, organizations can turn records management from a liability into a competitive advantage.