The Covid-19 virus pandemic has had a devastating effect on millions of businesses worldwide. In the UK the number of companies going into administration jumped by 50% in March 2020, according to official figures from the London Gazette, the UK's official public record for insolvencies.
The data shows that the appointment of receivers, liquidators or administrators surged to 3,736 in just one month between March 10 and April 9, 2020.
When you compare these figures for the previous year there were only 2,495 insolvency appointments during the same month, with just 1,995 being the average over the previous year.
While it is the smaller business operator that is at most risk of collapse from the fallout of the pandemic, some very well-established companies have also fallen into administration this year, including high-street name Debenhams with a loss of 22,000 jobs, two large restaurant chains Chiquito and Mark Hix with a combined loss of 4,500 staff, and even one of the country's oldest publishers, 179-year-old Jewish Chronicle, has collapsed due to the impact of the virus.
More insolvencies expected during 2020
The coming weeks and months will most likely see more UK businesses collapse, especially those who will find it difficult to re-open in the face of a possible brutal recession.
While many companies have been able to make good use of the Government's Business Interruption Loan Scheme, there will be many thousands of UK businesses that don't qualify for the support or will be turned down for support from the banks if they don't consider the business viable or strong enough to be able to pay back the loan.
As each month passes the UK is seeing more companies going to the wall, including 35 construction companies that fell into administration during May, according to a report by Construction News.
This was a significant increase in comparison to just nine construction firms collapsing during April 2020. Many construction firms received a Government cash flow boost to help them through the crisis, but in a lot of cases, the support wasn't enough to sustain the business.
Even multi-million-pound construction firms have been negatively affected, such as the £23m-turnover firm Construction Partnership UK (CPUK), which fell into administration on 4 May blaming the coronavirus pandemic for worsening their cash-flow issues.
Insolvency storage issues for insolvency practitioners
The fallout from the Covid-19 pandemic has seen a huge spike in the demand for insolvency practitioners to handle businesses falling into administration.
When a company becomes insolvent or a business falls into administration, there will still be a legal obligation for the retention of all relevant business documentation for anything up to ten years in a lot of cases.
There are a set of legal rules to follow around the retention of business records following the insolvency of a company. These rules are set out in the Insolvency Regulations 1994.
When an insolvency practitioner or official receiver is appointed to run the liquidation process they will take control of the business and take ownership of all business assets, business data and records.
To enable them to successfully settle legal disputes, outstanding contracts and sell off company assets to pay off creditors, keep all authorities informed and pay off the final tax bill, they will need to be able to access company records quickly and efficiently to gather the essential information they need.
One of the biggest issues faced by insolvency practitioners is where to keep all the business paperwork they need from the companies they are liquidating.
They will still need to keep some of the most important company records for anything up to ten years following the date that the company officially ceases to exist, so the safe storage of company paperwork is still essential long after their job has been done.
How secure are your documents?
As insolvency practitioners are handling sensitive business paperwork almost daily, a lot of consideration needs to be put towards keeping that data safe.
While you may have plenty of lockable filing cabinets and storage cupboards on your premises, there will always be a risk present that you could suffer from a data breach, or lose valuable documentation to fire or flooding.
Despite a lot of businesses going paper-free, there are still plenty of businesses that generate sensitive paper documents that criminals target to commit fraud. Even in these digital times there still remains a high percentage of ID theft and business fraud committed where criminals break into offices overnight or at weekends to steal confidential paperwork.
This is why keeping sensitive paperwork on your premises can present a major security risk. It makes better sense from a security and protection point of view to use a professional secure storage company, such as Restore Records Management, where there is no public access to your records and the only staff allowed to access your paperwork will be our own fully vetted staff.
All of our off-site secure storage facilities conform to British Standards BS 4971: 2017 for document storage.
Storage space restrictions and data security
It makes little sense for insolvency practitioners to store on-site at their own business premises every single business receipt, invoice, scrap of paper and box of archived files from the company insolvencies they are handling.
The sheer volume of paperwork that just one large company can hold can quickly overwhelm your storage space and spill out to take up valuable office space where you may be paying a high premium in business rent and rates.
In most cases, insolvency practitioners will be paying far higher rates for their business premises than is charged by secure records storage facilities, such as those offered by Restore Records Management.
By using our secure storage services you will not only be saving money but will also be reducing your risks of suffering a data-breach and meeting with your compliance under GDPR.
As one of the UK's leading business storage solution providers, we work with many financial institutions, accountancy firms and insolvency practitioners to deliver fully comprehensive document storage and record-keeping service, which can be extremely useful for when companies become insolvent, or go into administration, or go through a restructuring phase.
Insolvency information management issues
Official receiver's and insolvency practitioners cannot afford to waste any time when processing documents needed for their work.
The effective management of a huge volume of paper documents can be difficult and can severely slow-down their case handling processes, especially when they need to access information that may be stored across multiple offices.
Managing large volumes of paperwork can be stressful, especially if the paperwork you are retrieving is not particularly well organised.
Most company records will comply with the 'six-year rule' that is in use by many accountancy firms. However, this doesn't apply to some company records that need to be kept for the life of the company. These include the Certificate of Incorporation, Articles of Association and Registers of Members and Directors.
Can you afford to store documents from your insolvencies for six, seven, ten or twelve years? Many insolvency practitioners do not operate out of offices that have the capacity to securely store these documents for this length of time.
Paperwork management and archive document storage is a huge part of the insolvency process and there are so many issues and risks associated with the poor storage and management of business documents that it is worth considering outsourcing this essential task to a professional company, such as Restore Records Management.
Secure off-site record storage
By using Restore’s secure off-site records storage services as your insolvency storage solution you will be able to keep and maintain up to date and accurate records for all the paperwork you need to do your job.
You will save money by using our secure storage facilities for your active files where you will be able to get quick access to the documentation that you need. You will also be able to make good use of our archive storage services and secure document storage service for the paperwork that you need to keep for the period required by law once a company has ceased to exist.
With our flexible and versatile document storage solutions, you will be able to quickly locate and access the documents you need whenever necessary and you can have great peace of mind knowing that you will be complying with your duties under the current Data Protection Act.
In accordance with GDPR, you will also need to destroy certain documents that contain sensitive personal or financial information when they are no longer needed for your liquidation purposes.
Once the statutory retention period has ended for the paperwork that you need to keep on record longer, then you will need to securely dispose of this paperwork and have a certificate of destruction for your audit trail.
For example, when you are liquidating a company you will have a set of HR records that will need to be kept for a minimum of 7 years following the termination of employment. However, payroll details should be kept for 12 years, so you will be dealing with paperwork with various end of life dates.
As part of your compliance with GDPR, you should make good use of Restore’s secure storage and secure data disposal services. We are here for you when you need to store, manage and destroy the documents you no longer need through our secure data shredding services.
Managing your stored documents
At Restore we make the management of your stored documents easy. We not only securely store your physical paperwork and business records, but we also manage them electronically through our own electronic document management system.
This provides you with the most secure and efficient method of managing and tracking your documents so you will always know exactly where they are, how long they have been in storage, and what their expiry dates are.
With GDPR in force, any personal data you store will have a very limited life-span. With GDPR everyone has the 'right to be forgotten' so businesses need to securely dispose of personal data much quicker than in previous years.
With data that needs to be stored for longer, a business needs to know exactly where that data is stored and the data needs to be stored securely to prevent a data breach. This is easy to prove with Restore’s online document management system.
O'Neil's and Dovetail management system
Restore uses O'Neil's archive and asset tracking software to manage our storage facilities. This means that we offer you direct access to our system from your desktop where you will be able to trace and locate your files and assets in just a few clicks.
Our online records management system means you will always have a high level of visibility for your documents and will be able to organise collections, order retrievals, scan on demand and bar-coding services that are delivered directly to your device giving you an accurate audit trail.
What is also good to know is that our online records management system is completely free of charge when you take up one of our secure records storage services!
No matter how often you need to retrieve your stored documents to complete your liquidation procedures, Restore Records Management is here to help support you.
As you will be dealing with many different types of documents, it is best to talk to one of our friendly team members at Restore Records Management so we can advise you of the type of storage you need for your paperwork.
There is no need to worry about getting your paper files to us as we will arrange for a secure collection using our GPS tracked security vehicles. Our drivers and collection team are fully trained and vetted security officers and will be uniformed and will provide you with ID on arrival.
We have over 100 fully secure storage facilities, in 44 locations, across seven UK regions. You can have complete faith in our security measures as we use fully vetted security staff, and GPS-tracked vehicles.
Our secure storage facilities have strict access control, CCTV monitoring, fire suppressants and air and humidity control to ensure your stored paperwork is kept in the best possible condition.
Full service solution
You will have access to our full range of restructuring services. We offer hassle free service with one point of contact to make your life easy.
In addition to our storage services we can also provide:
Relocations - The market leader in commercial relocation. Restore specialise in business and technology moves focusing on customer led approaches.
Recycling, resale and disposal - A leading provider in end of life document and IT asset destruction, including disposal and recycling options. We also offer a resale option for redundant IT equipment such as desktops, laptops, old mobile phones.
Call us today on 03301 629 392 to discuss your needs. We are here to help!