Recently, a group of creditors discovered that several student loans – to the tune of $5 billion – were erased because of missing paperwork and poor record keeping practices on the part of the lenders.
While the students can breathe a sigh of relief, the lenders, on the other hand, find themselves in deep trouble.
So, what could be the cause of such a massive oversight?
Often, lenders buy and sell loans. That’s a common practice among lenders. In fact, a loan may change several hands throughout its life.
When these loans change hands, lenders are at risk of losing some of the important paperwork. In the absence of full and complete paperwork to prove the chain of ownership of the loan, collection of the debt can become impossible.
In fact, without the complete set of documented records collections cases brought against such borrowers will be unable to prove a thing. In the absence of sufficient evidence to prove loan ownership, judges often dismiss these lawsuits and the lenders often end up forgoing those debts.
So, what can we learn from this fiasco?
To put it simply, take the time to ensure you are managing and storing critical business documents correctly. While this case is at the more extreme end with lost paperwork costing companies billions of dollars, it is still a warning that lost paperwork can lead to severe financial and legal problems.
So, what can you do to prevent a similar disaster happening in your organisation?
Scan and Index Documents
The best way to ensure you don’t lose paperwork is to digitise all your paper records into a searchable, secure digital document archive.
With advancements in document scanning technology, it is possible now for many industries to do away with the complicated task of managing paper records. Scanning technology these days allows for very automated workflows than scan and create digital versions of your documents and index them into a searchable cloud-based document archive. With document scanning and indexing, you can easily search for records using a variety of parameters. For instance, you can search for a document using a date, keyword, bar code, customer name or ID number which can often be automatically read directly from the scan using OCR technology.
Being able to simply search for the files will no doubt save countless hours tracking down documents and greatly increase productivity and the retention of records.
Document scanning is not restricted to standard A4 size documents. A good document scanning company will have the equipment and the experience to scan and digitise all types of documents including microfilm, fiche and oversized engineering plans.
By digitising and indexing your documents, you are ensuring their safety and security. Going digital helps you to eliminate the risks that paper documents are exposed to such as floods, fire and misplacement.
Digital Transformation Solutions, Your Document Management Partner
Protect your business from the financial and legal risk of losing important documents. Take action before disaster strikes.
Digital Transformation Solutions offers document workflow solutions and professional scanning solutions to digitise your paper records.
Get in touch with us to know more.