Storing important financial documents: Where and How

No matter how big or small your business, it’s vital that you store your important financial documents in an effective way. That means keeping them safe and private but still accessible.

Here, Joe Muddiman, General Manager of Rads Document Storage shares his expertise on what businesses should be considering when storing financial documents and paperwork.

Identify which documents need to be kept on paper

HMRC is thoroughly embracing digital. This means that there are very few documents that need to be kept on paper for tax reasons. There may be documents you prefer to keep on paper for other reasons. That’s fine. In general,  however, the best rule of thumb to apply is that you only keep documents on paper if there is a specific reason to do so.

Even if you do need or want to keep paper documents, it’s advisable to keep an electronic scan of them as well. This at least gives you something to show HMRC if anything happens to the originals. If you can show that there was an understandable reason for the loss of the originals (e.g. fire), HMRC may stretch a point and accept the electronic versions.

Put all paper documents into secure storage

For most businesses, this means secure offsite storage. There are a couple of reasons for this. Firstly, it means that your key paperwork will be kept safe if anything happens to your business premises.

There are safety measures you can take if you must store your paperwork on-site. For example, you can invest in a fire-proof safe. Realistically, however, the average business is not going to be able to apply the same level of safety and privacy as specialist document-storage companies.

If you’re concerned about getting quick access to your documents then just look for a document-storage company that offers an access guarantee. Any reputable one will. Also, remember that there are only likely to be a limited number of occasions when you actually need the originals. For example, if you have a GDPR request, an electronic copy will usually be fine.

Encrypt all electronic documents

Sadly, at this point, this is non-negotiable. If you take proper security precautions, it is highly unlikely that your data will be compromised. There is, however, a massive difference between unlikely and impossible. You, therefore, need to work on the assumption that your data is going to be compromised and take appropriate precautions.

If you’re wondering just how serious an issue this is, then do a quick internet search on the term “ransomware”. You’ll soon discover that criminals are now using the threat of exposing data to put extra pressure on companies to pay their ransom.

Keep at least two copies of your data

With live data, you generally want your production copy and at least one backup. It’s better to have two backups. Typically, you’d have one on-site and one off-site. With archived data you want at least two copies of the archive. Again, typically, you’d have one on-site and one off-site.

If you still have a physical working location, you might choose to have two off-site backups, one on physical storage and one in the cloud. If you’re fully in the cloud, then you may choose to back up to two different clouds. You should certainly have one backup in a different cloud in case your main one is compromised.

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