All observations of Galactic X-ray binaries are affected by absorption from gas and dust in the interstellar medium (ISM) which imprints narrow (line) and broad (photoelectric edges) features on the continuum emission spectrum of the binary. Any spectral model used to fit data from a Galactic X-ray binary must therefore take account of these features; when the absorption is strong (as for most Galactic sources) it becomes important to accurately model the ISM absorption in order to obtain unbiased estimates of the parameters of the (emission) spectrum of the binary system. In this paper, we present analysis of some of the best spectroscopic data from the XMM-Newton RGS instrument using the most up-to-date photoabsorption model of the gaseous ISM ISMabs. We calculate column densities for H, O, Ne and Fe for seven transient black hole X-ray binary systems. We find that the hydrogen column densities in particular can vary greatly from those presented elsewhere in the literature. We assess the impact of using inaccurate column densities and older X-ray absorption models on spectral analysis using simulated data. We find that poor treatment of absorption can lead to large biases in inferred disc properties and that an independent analysis of absorption parameters can be used to alleviate such issues.