Being an offsite records management provider, this is a pattern we see across almost every client that comes to us once their document lifecycle outgrows their original filing system.
When records increase in volume, filing cabinets proliferate, more storage rooms are requisitioned, and hours that could have been devoted to billable work are swallowed up in document retrieval. At this point, the question as to whether to retain records internally or externally ceases to be merely philosophical and begins to have a tangible impact on budgets, audit control, and the productivity of employees.
Which is the better option, however, is dependent on the retrieval frequency, regulatory risk, and available square footage. We’ll discuss all of it in detail in the following post.
Let’s get started!
How In-House Storage Works
The records are stored within the organization’s premises in filing cabinets, storage rooms, or on servers. The staff accesses the documents directly and does not involve any third parties in the process. Employees that constantly extract and utilize documents, such as legal assistants working on active cases or finance personnel during audit seasons, the direct access is invaluable.
The disadvantages of in-house storage are not apparent at first, but they become clear after a year or two of intense use.
Access
If the documents are several paces away from the worker, the retrieval process takes mere seconds. Additionally, there is no need to seek permission or wait for a third party to deliver the necessary files. If your organization has high document access rates, the proximity and availability will be your critical advantages.
Space
Storage rooms are notoriously wasteful, as the neat stacks of paper slowly transform into disorganized boxes and eventually entire storage areas. The space allocated to file cabinets and shelves is no longer useful for anything else, even if it was only paper for a short time.
Security
The only way to ensure the safety of the stored property is to lock it in a secured vault. The internal control measures run on the staff’s diligence and discipline, which are not always guaranteed and are easily circumvented by dishonest employees. For instance, if a worker leaves a cabinet open or takes the wrong key, the entire system is compromised.
How Offsite Storage Works
A third-party provider physically or digitally stores your records. After receiving your files, they are secured and cataloged in their management system. Any requests for documents are fulfilled by the provider, with a turnaround that is almost always same-day or next-day.
Structure
Every file has a physical or digital location and a history of who accessed it. For many industries, this is essential to fulfilling the requirements of being able to demonstrate the location of a particular documentation.
Compliance
Healthcare providers, financial institutions, and large corporations cannot afford to have incomplete or unreliable documentation. Storing files at an offsite provider already includes the necessary compliance procedures and retention schedules to avoid reconstructing the paper trail of any documentation.
Environment
Many facilities that specialize in data storage are controlled to ensure the safety of the files in their possession. This includes humidity, temperature, and pest control to ensure the longevity of any given paper record. It is difficult to recreate these conditions within an office environment.
Access Speed vs Access Discipline
The most obvious advantage to onsite storage is the immediate access to files. Any employee who needs a file can expect to receive it right away upon approval. This speed can be extremely handy in time-sensitive situations: if a customer service executive is on a call with an irate customer and needs to pull up the account details immediately or if a small business owner has to sign a contract which was approved minutes ago to clinch a deal on the same day.
Having offsite storage requires an extra step to access files, adding a more deliberate process to accessing them. Same-day or next-day document retrieval requires prior preparation from the requesting party. This added step is usually a blessing in terms of creating disciplined recordkeeping standards. In our line of work, we’ve seen many companies that store their documents offsite suffer from employees searching for misplaced documentation and request files too late for any business-critical processes.
It all boils down to which workflow best suits the individual company.
Cost Comparison
In-house storage may seem like an economical option, as you have the space and do not feel the need to spend extra money on something else. Many people would automatically think of rent as the deciding factor in choosing between in-house and offsite storage, there are more costs that should be taken into consideration.
The costs of shelving, cabinetry, security systems, and the labor required for filing, accessing, and eventual shredding of documents far outweigh the expense of outsourcing to professional record storage facilities.
Plus, the space utilized for document storage, as well as the costs required to maintain and secure it, is space and money that could otherwise be used to generate revenue from other assets.
Once an off-site storage contract is reviewed, and the costs of record tracking, retrieval, and disposal are included in the calculations, the math speaks for itself.
Risk and Recovery
In-house record keeping relies on internal policy and, in turn, everyone abiding by it. A document goes home with an employee for research over the weekend. A retention schedule is ignored, leaving records that should have been disposed of years ago exposed for all to see. A new person is not oriented properly and begins placing documents in the wrong files. The opportunities for missteps are numerous, and none of them require malice or negligence to cause serious problems. Several people are responsible for the same group of records, and unless they are all on the same page, difficulties will arise.
Offsite providers eliminate most of these issues by creating a paper trail for every action taken with regard to the records. When a file is removed from the facility, who removed it, when it was taken out, and when it was returned are all documented. The provider also follows proper retention schedules, meaning no further action on the part of the client is necessary to ensure that files are not kept longer than allowed. In the event of a regulatory or auditing inquiry about a particular document, the provider can offer specific information about its whereabouts at any given time instead of relying on the memory of employees.
Most worrying are the circumstances surrounding a disaster. In a fire, the records stored within a single building can be lost within minutes, and there is no guarantee that a business’s insurance will cover the costs of recreating them from scratch. An offsite storage facility is likely to have fire-suppression systems and other safety measures in place, and it is also located at a different site, so that a fire cannot affect all of a company’s records at once. Some facilities provide additional security by maintaining multiple copies of the client’s records at different facilities, ensuring that no single disaster can erase everything.
Which One Fits Your Business?
There is no absolute answer when it comes to choosing between office and offsite storage. If you have a small staff that will handle filing on a daily basis, it may be a good idea to keep the files inside the office. It ensures quick access to the stored information and makes retrieval easier.
On the other hand, having a substantial amount of paperwork, working under challenging conditions, and saving resources are some of the reasons why a company should consider an offsite solution.
Also, not all businesses are obligated to pick a side. You may keep certain data stored onsite and shift inactive files to an offsite storage facility.
For example, a clinic may keep active patient files within the office and move inactive patient records to an outside provider for storage. A retail outlet may store active commercial contracts at the office and ship all terminated agreements to an offsite storage facility.
Streamline Records With Back Office
With BackOffice, your documents are stored safely, organized and able to be retrieved easily so that your personnel can focus their time and effort elsewhere. Whether you need to completely transition to an offsite storage company, or just need help implementing a hybrid system, we can help you figure out what will work best for you.
If your files are taking over your office space, give us a call today!
FAQs
- What are the different onsite and offsite storage systems?
Onsite storage systems are usually filing cabinets, secure storage rooms, or in-house servers. Offsite storage systems are more diverse and can be document storage warehouses, records management facilities, cloud storage, or a combination of physical and electronic storage. Most storage companies offer scanning and digitization services in addition to physical storage.
- What is the difference between onsite and offsite storage?
Onsite storage refers to keeping records on the organization’s own premises, meaning that they are stored in a location convenient for their employees. At the same time, offsite storage entails removing documents to another location designed for document management purposes, which helps ensure higher levels of security and organization and facilitates retrieval, albeit with a longer wait time.
- What are the benefits of using an offsite storage facility or warehouse?
The offsite facility creates space in the office, lowers the time spent by employees working on paper records, establishes a secure environment for records and proper retention schedules, and protects against the loss of valuable records due to environmental issues or large-scale disasters such as a fire or break-in.
- What are the disadvantages of offsite storage?
The primary trade-off for the benefit of speed is the loss in flexibility. You are at the mercy of another party to be able to get a file to you quickly. There is also an ongoing cost of storage plus a potential liability if the other party is not trustworthy.
- How do I choose between keeping records in-house and offsite?
First, you have to evaluate how much staff will need to access the stored documents. If the retrieval process is frequent, it makes more sense to keep records inside the premises. Secondly, consider such factors as volume of information, regulatory requirements, and available space. A combination of these elements will indicate that a hybrid approach is the best option.
- Is offsite storage safe?
Serious providers will have protocols in place to control and monitor all files entering and leaving their storage facility. This kind of security is often much harder to implement in an ordinary office than in an environment where it is specifically designed into the operations.
- Can I switch from in-house to offsite storage later?
Yes, many companies opt to make this change as their recordkeeping needs evolve. Your provider can usually pack, index, and transfer existing files with minimal disruption to your staff, and you can choose to move everything at once or start with less-used records.
- How much does it cost to store records offsite?
The price of storing records offsite varies depending on the amount of records, how often they need to be retrieved and if any additional services like scanning and shredding are required. Providers charge based on the number of boxes or square feet stored and a retrieval fee, so the more boxes or square feet and the more often records are retrieved, the higher the price is.
