Every business in today’s modern age, no matter its size, can’t function without a developed records management system. Even though records management is seen as a tedious and time-consuming task, it’s imperative for a company to keep records pertaining to any business activity.
Keep reading to find out what records management is and why your business needs it.
What Is Records Management
Regardless of the industry, companies have a lot of paperwork on their hands. The most common types of records a company can produce, receive, and store includes correspondence documents, legal papers, accounting records, personnel files, progress paperwork, and more.
Keeping track of all of these documents and making sure they’re organized isn’t an easy task, and just one misplaced file can create a huge problem. This is where records management comes in.
Also known as records information management (RIM), records management is a system of creating, classifying, storing, tracking, and disposing of various types of business documents. This is otherwise known as the RIM lifecycle, which starts with creation and ends with disposition. When we say records, we aren’t only referring to paperwork, but documents in different formats. This includes digital files, audio and video recordings, photos, and other documents.
There are five stages of records management:
- Creation – all the business records created in-house and documents received from an external source.
- Classification – the documents are organized according to their type and purpose. For example, correspondence, legal, accounting, and personnel records.
- Storage – the process of separating records into active and inactive categories and storing them in either a physical storage space or digital repositories.
- Maintenance – keeping track of archived documents and making sure they are secure.
- Disposition – shredding physical documents or safely deleting digital files at the end of their life span.
It’s important to differentiate records management and document management. While these two terms are closely related, they’re not the same. While documents can be edited or changed, records are the final product.
For example, documents can be customer lists, purchase orders, applications, phone lists, receipts, business proposals, etc. Alternatively, records can be legal documents, driving licenses, tax returns, archives, financial statements, and more.
The Importance and Benefits of Managing Records
Even though there are no rules for how companies should keep and manage their records, they are obligated to keep them for a certain period of time due to tax regulations. In fact, company records must typically be kept for at least seven years after the end of the accounting period. Some documents must be kept for 10 years.
The types of business documents a company must keep include tax returns, payroll tax records, current employee files, job application information, accounting services records, ownership records, and operational records.
Records management doesn’t only cover the process of creating, storing, and disposing of documents. It’s also responsible for data protection, easy access, following company guidelines and regulations, and safely archiving documents.
Records management increases productivity, allowing employees to find the file they’re looking for and complete their daily tasks with no issues. Just think how much time it takes to locate one file in a storage room full of folders and binders. A records management system allows for better time efficiency, streamlined business procedures, and reduced stress at the office.
Data Management and Automation
Data automation is the process of digitalizing various types of documents, from legal forms and contracts to purchase orders and invoices. It can also be used to automate business records, like accounting source files, OSHA logs, financial statements, etc.
Owing to digital transformation, records management and document automation go hand-in-hand. That’s why so many companies are using data automation software, transferring all of their records to a digital repository. For that reason, data automation is sometimes called electronic records management.
What’s great about data automation and management is that the same system can be used for both physical and digital documents a company produces and receives. There are many more benefits of data automation. For instance, the files can be accessed more easily if they’re stored in a digital archive.
It also allows for better productivity, efficiency, and time management. Not to mention that a company’s documents are safer this way. Instead of keeping the documents in a storage room, where they can be damaged in various ways, storing them digitally makes them much safer. As long as you have a strong data security system, your records will be secure from data breaches and other online threats.
Tips for Effective Records Management
The more documents a business has on its plate, the harder it is to manage such a large volume of paperwork. That’s why companies need to come up with an effective records management strategy.
Every good records management system starts with a well-established policy, which needs to be simple to understand for everyone involved in creating the system. This means that you should train your employees to utilize the records management system.
The system needs to make sure the company’s documents are readily available for future use. This factor is even more important for electronic records management. The automated system needs to be equally accessible to all employees, who might need to view, copy, or send the document to a client, coworker, or a third party.
The best advice we can give you for creating an effective records management system is to go digital. Many companies turn to data automation companies for records management services. These companies computerize all the documents a business has produced and organize them in secure online storage.
Manage Your Company’s Records
Data and information are the building blocks of every company, no matter its branch or industry. That’s why every business can benefit from a records management system. Not only will it help your business run at peak efficiency, but it will also keep your records safe and secure.
If your company is in need of records management services, Buckmaster Solutions is here to help businesses in Sacramento and the surrounding areas.