How The Records Management Industry Can Affect Your Business

The records management industry is growing and changing.

A recent trend over the last couple of years has been for the biggest players in the industry to grow by acquisition.

 

Recall Holdings Limited first acquired CitiStorage back in 2014. At the same time, Iron Mountain, the largest records management company in the world, acquired Time Record Storage. Then, in April of 2015, Iron Mountain continued its growth by agreeing in principle to acquire that same Recall Holdings Limited.

 

This recent strategy has made it more challenging for companies to get competitive offers, which can impact cash flow.

 

There are still local and regional records management suppliers in most markets. However, it may take more effort and expertise to find and vet them.

 

How Does This Affect Your Business' Cash Flow Statement?

For starters, prices have gone up. In a market where the consolidation of suppliers reduces competition, suppliers can raise prices for storage and services. Suppliers have begun providing less competitive offers for their corporate services than would have been expected in the past.

 

What Changes Can You Expect if Your Current Supplier Gets Acquired?

If your supplier is acquired, it could result in some charges that were not incurred under the previous supplier. You should review the invoices every month, and should question any new or higher charges.

 

What Should CEO/CFOs Be Aware of?

It’s a good idea to fully understand your contract with record management suppliers. Be aware of the termination date, and the costs that would be incurred if you decided to terminate the contract with your current supplier. Even if it’s at the end of the agreement term, you can still incur costs. Also, know the limits, if any, on supplier rate increases.

 

As the records management industry continues to evolve, it’s important to know the trends that may affect your strategic planning. Be aware of price changes and charges you pay each month on your supplier invoices, and how an acquisition could change that.

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