We may receive compensation when you click on links to products from our partners.
Seagate UK revealed that “by 2025, there will be 175 zettabytes of data in the global datasphere”.
It’s safe to say that businesses and individuals are generating a LOT of data today. And that data could be in the form of emails, documents, or even social media interactions.
But if we turn the focus solely on businesses, it is essential to preserve some part of that information. If not, then it can have dire consequences on the long-term profitability and viability of the business as a whole. And those consequences could include situations like non-compliance with laws leading to heavy penalties, fraud, poor cash flow management, and so much more. That’s when corporate records management comes into the picture.
According to ISO standard 15489: 2001, “Records Management (RM) is defined as the field of management responsible for the efficient and systematic control of the creation, receipt, maintenance, use, and disposition of records, as well as the processes for capturing and maintaining evidence of and information about business activities and transactions in the form of records.”
Sales log, accounts payable log, accounts receivable log, business expenses log, purchase order, contracts, and customer lists are some of the types of records that businesses keep and manage.
In this article, we dig into how you can keep and manage company records properly. But before that, it is important to answer why should you even do that in the first place.
Why should you keep and manage company records?
- Managing cash flow. Cash flow is the life and blood of a business because it is needed to meet not only existing financial obligations but also to plan for the future. Recording cash flow helps you understand where each dollar is coming, and going, and gives an accurate projection of the health of your company’s finances.
Recommended reading: How to manage your budget when running a small business
- Prevent fraud or theft. It is easy to prevent fraud when you keep and manage detailed records of all business transactions. It helps in producing error-free financial statements for accounting and auditing purposes.
- Compliance with laws. Businesses need to be wary of hundreds of laws to avoid any unnecessary penalties. Proper record-keeping helps comply with the laws of different countries. For example, here we look into Europe’s General Data Protection Regulation Article 30, which is also called the RoPA.
As per Article 30 or RoPA, “Each controller and, where applicable, the controller’s representative, shall maintain a record of processing activities under its responsibility.” Businesses that have 250 employees or more are mandated to keep a record of processing activities. Understand RoPA to ensure your business doesn’t go down in the trenches of non-compliance.
Similarly, there are plenty of laws that need to be followed, and data plays a crucial role in it.
- Make critical business decisions. Whether you own a small business or an SME, each dollar holds importance and should be spent well. So, having a solid understanding of the source of each dollar and where it’s spent is essential to making data-driven decisions for the long term. Data is gold because it helps save time and money while maximizing profitability.
5 steps to manage and keep company records
- Creation. The first and foremost stage of a record’s lifespan is its creation. And this means not only entails receiving a record but also categorizing it as a record. The document can be in any format, for example, paper docs, emails, digital forms, case studies, and more. Other types of data can include surveys, online tracking, marketing analytics, social media monitoring, transactional data tracking, and data related to subscription or registration.
- Use or modify. It is essential to maintain and secure important records, especially when they are used or modified. Doing so prevents any unlawful access or harm that can affect the company eventually. Records can be of two types, active and inactive. When it comes to active records, it is important to ensure that they are not only accessed diligently but also stored and managed in a way that they can be retrieved easily in case anything happens. On the other hand, records that are inactive, are kept off-site or in some other archiving software because such records are not needed for day-to-day business usage. Each organization has its own set of rules about how a record should be handled, no matter the state it is in.
- Maintain securely. Maintaining records also includes the time frame within which it needs to be stored. Again, the record maintained is often regulated by industry-specific laws and prescribed data retention policies or standards.
- Dispose of or extinguish. Typically, the onus lies on the team that handles and manages data and records to analyze whether a set record of data needs to be destroyed or archived. Data disposal can be done in multiple ways like degaussing, sanitizing, or wiping the device with specific software. However, it is important to note that data can only be securely deleted if it doesn’t pose to be risky for the business in the future. Destroying data helps in conserving space and storage, and managing information size.
- Archive, if needed. After non-essential records are destroyed or eliminated from the system, it is pertinent to identify the records that hold a long-term retention value and should be preserved properly. Archiving is important to prevent data loss, enhance security, and meet certain legal requirements. Cloud-based archiving software like CometBackup, FileHold, and ManageEngine come are used by businesses to archive data safely.
Best practices to keep and manage company records
- Set clear policies and procedures. Having well-defined policies and procedures can enhance the records management process drastically. It helps in understanding the processes and rules for not only maintaining critical data throughout its lifespan but also including whether it should be archived or disposed of. Here’s what this entails:
- Each and every step in the record management process should be described with precision. This ensures that the employees don’t incur any obstacles.
- Lay down the stages of each record’s lifecycle, and communicate it prior.
- Set processes in place to prevent any unauthorized access leaving the records to threats.
- Use cloud-based software. Technology plays a crucial role in businesses today, so don’t leave your precious records in a warehouse. Instead, make use of Regulatory Information Management Software ( or RIMS). That way you can rest easy because it allows you to oversee and handle records digitally, control access, and automate retention regulations. For example, IQVIA RIM Smart is a popular RIMS. For small businesses, Bitrix24 is a popular and free record-keeping software.
- Outsource, if necessary. Maintaining and keeping business records is no child’s play. If your business is witnessing exponential growth, it is a good idea to outside some or the entirety of the records management program to a reputed consultant firm.
- Organize training for employees. Record management is always teamwork because all departments generate records. So, in order to make the best use of record management in your firm, you should hold proper training to make everyone understands how to tackle records.
Recommend reading: Benefits of continuous training for employees.
- Implement a records retention policy. Businesses need to comply with laws all the time, and major industries have proper laws set to preserve records. Make sure to identify those laws, be country-specific or industry-specific (for example the RoPA as discussed above). And finally, you need to implement a timeline for records retention.
- Ensure ease of access. Recording data is one thing but making sure that you have easy access to it is another. Because there is no point in maintaining or keeping data if you cannot access it easily when it’s required urgently. Start off by making use of metadata. Put simply, metadata allows users in locating and examining data without the need for each individual to discover it brand new with each use. NISO, the US National Information Standards Organization, defines Metadata as,
“Structured information that describes, explains, locates, or otherwise makes it easier to retrieve, use, or manage an information resource.”
Keep and manage company records for peace of mind
Be it a small business, SME, or large business, recordkeeping is an essential (at times tricky) part of ensuring the smooth functioning of a business. Keeping managing proper records of employees, tax documents, incomes, and expenses is not only good for business but brings peace of mind, helps you monitor your progress, comply with laws and of course — saves time and money.