Reducing the duty of care compliance burden with electronic document management & delivery
In the USA, UK and Europe compliance with regulations, standards and guidelines set out by regulatory bodies has become a major focus for public and private organizations, particularly relating to financial data.
Compliance is ultimately the responsibility of the board of directors, who owe a duty of care to customers, suppliers, shareholders and other stakeholders to ensure that effective measures to avoid a breach are in place.
This duty of care (and the compliance requirement that goes with it) can exist in almost any area: road worthiness of fleet vehicles, probity of pension schemes, environmental protection, waste and recycling, health and safety, data protection --- the list goes on.
When it comes to business documents, there are two main areas in which organizations are likely to owe a duty of care:
In both cases, businesses and public organizations may find the “burden of compliance” eased by Electronic Document Management systems.
- Financial compliance: maintenance of records for audit and regulatory purposes
- Waste Management: the responsibility to dispose correctly of paper
It’s worth the consideration, because failure to comply with a duty of care as set out in law can lead to hefty fines. Here’s a quick look at each area:
Financial regulations dictate that companies must keep sent and received invoices securely for six years such that the original documents can be:
Similar requirements exist for submission of VAT documentation (and its equivalent sales tax-related regimes in non-UK countries).
- Safe from corruption or alteration
- Reproduced easily in a readable format
Storing these paper documents creates an enormous requirement for physical space and additional overhead as a result of the difficulties arising from access and retrieval. To overcome this, some organizations resort to microfilm or microfiche or to scanning and storing documents electronically.
But in both cases the production of paper originals and subsequent processing to electronic format is a tedious, inefficient, burdensome and in many cases needlessly costly process.
Financial documents like invoices, purchase orders and tax returns that must be audited and retained for long periods of time can all be produced electronically, avoiding all use of paper, with no question of financial non-compliance.
Document management solutions like Zetadocs integrate with a range of accounting or ERP systems to generate, send and archive financial documents so they can easily be found and retrieved for later inspection. An additional benefit is the automated creation of audit trails – enabling best practice in a way that is simply not possible with paper-based financial documents. Inbound documents, emails and faxes can also be quickly and easily captured to ensure a complete record of transactions is available.
Businesses have a legal responsibility to ensure that any paper waste they produce is stored, transported, treated, reprocessed and disposed of safely - with no harm to the environment. The key piece is the last one.
In the UK, the 1991 Duty of Care Regulations state that businesses are specifically responsible for their paper waste from when it is produced until it is transferred to an authorised party.
Breach of the Duty of Care is an offence, with a penalty of up to £5,000 on summary conviction or an unlimited fine on conviction on indictment.
Electronic documents can be emailed, faxed, received, archived, managed, shared – and disposed of easily, instantly and without any waste or environmental implications. Using document management solutions like Zetadocs for NAV and fax software like Zetafax to supplement or replace common document processes should be a first step in easing the burden of compliance.
Electronic document management and delivery makes sense on so many levels, but support for regulatory compliance is a powerful factor. The mere possibility of a breach should be enough of an incentive to directors and managers.