Using a Virtual Data Room
6 Uses for Virtual Data Rooms
With so much sensitive information under siege nowadays, protecting private documents has become even more of a priority. A virtual data room, or VDR, offers the ability to store and share files in a safe and secure manner, while providing the additional benefits of smooth collaboration and document management.
Businesses of every size and industry can find many uses for a virtual data room. Here are six key applications for this innovative and efficient system.
The stakes are often quite high in most legal battles, making access to information extremely important. It’s not uncommon for law firms to house documents in large, expansive spaces called data rooms, where files are maintained by clerks. Due to the number of cases that are often worked at one time, this means that a lot of data is moved in and out each day. This can make it difficult to track where paperwork has gone.
By moving everything to a VDR, it becomes much easier to track document sharing. Access can be granted and removed as needed, so that information remains secure even once its purpose has been served. Files are also more readily available when time is no longer a luxury.
Merger and Acquisition Departments
When mergers and acquisitions (or M&A) deals are on the table, there’s a great deal of paperwork and documentation that must be reviewed by both parties before anything is officially signed. Before the advent of secure file sharing, this meant extensive travel, so that M&A professionals could view the data they needed to make an informed decision. Sensitive documents could not leave the locale where they were stored.
Because the digital space has now become an option to safely review and negotiate business transactions from the convenience of each side’s own office, another moniker for the VDR is the virtual deal room. Should a merger fall through, access to data can simply be withdrawn.
Auditors and Accountants
An accountant acts as a consultant for a business and evaluates the money coming in and going out to determine efficiency. This involves a review of the four key financial statements in business:
- Balance sheet
- Retained earnings
- Cash flow
- Income statement
This group of documents contains sensitive data that could be detrimental in the hands of competitors. VDRs provide a secure document sharing feature that enables companies to collaborate instantly with accountants. Information can be shared promptly without running any risk of falling into the wrong hands.
Auditors play a slightly different role, examining tax records in addition to financial paperwork. Their job often involves a lot more travel, so that this information can be thoroughly reviewed. A VDR has the ability to simplify this process.
Chief Financial Officers
The primary job of a chief financial officer, or a CFO, is to know the numbers of the business. This requires the orchestration of all those documents that accountants and auditors wind up reviewing. Retaining management over these files is far easier with a VDR. Data is always precisely where the CFO needs it to be, and he or she is able to give or restrict access to certain employees or external professionals that may need it.
Large corporations frequently operate in locations across the country. Whether these branches are corporate-owned or bought by franchisors, it’s necessary to share policy updates or upcoming strategic plans with representatives from each business.
In some cases, corporate offices will encourage input from their franchise operators. This is where collaboration becomes a major factor in virtual data room uses; when data moves back and forth more efficiently, more qualified individuals can be reached. This results in the discovery of more effective insight.
When you’re getting your business up and running, or even just maintaining a successful small business, space can be limited. Even so, you’ll want to keep an archive of financial records in case an auditor ever needs to review your company’s history. By storing all of this data within a VDR, you’ll save on floor space that may have been devoted to bulky filing cabinets.
Ultimately, virtual data rooms have the potential to benefit any business owner. Document storage is a necessity in any enterprise; securing that data from unwanted eyes is of equal importance. You can close deals in the safe and convenient venue of a virtual data room without ever having to set foot on a plane.