Record-Keeping 101

In a recent blog, I mentioned how important it is to keep detailed and accurate business records. We lawyers will harp on the importance of having records of certain things as evidence in case someone sues your ass. For myself, a compulsive organizer, I figured I’m pretty much on top of keeping what I need to keep… until I met Lisa Ricciuti. Lisa is a fellow entrepreneur who helps businesses to develop effective information management systems. She sports a couple of Masters degrees in Library & Information Studies, and Archival Studies, plays bassoon like a champ, and has a penchant for craft beer. What follows is a guest blog, penned by her, which will help you to understand why good record-keeping is important, and some tips on how to get yourself started.

Over to you, Lisa!

Record-keeping 101: A Few Basics

With so many things going on as a small business owner it’s easy to let the paperwork pile up.  “I’ll get to it later,” we say, shoving papers into a folder marked “Misc.” or saving documents into a desktop folder named “Important Sh*t.”  Most of the time this “filing system” remains undisturbed until disaster strikes in the form of a lawsuit, deadline, computer crash, virus, or security breach.  Suddenly it’s really important to know what you have, where it’s stored, and how you can access it.

There are laws and regulations setting out minimum recordkeeping requirements – what must be kept, how it must be maintained (e.g. where the data is stored), and for how long. For example, accounting, corporate, and employee records all have different rules. Laws apply to businesses that collect & use personal information of customers, suppliers, and contractors. Limitation periods for lawsuits apply to your business, which will also influence what you keep and for how long you keep it.

A number of options exist, almost all of which can be customized to meet the needs of your business.  For many small business owners, the cost and effort involved to set up a sophisticated recordkeeping system isn’t warranted, but that doesn’t mean that your choices are limited to “save everything” or “do nothing.” Although “doing nothing” may seem tempting at times, it leaves your business open to unnecessary information risks, most of which could be easily avoided by documenting (and implementing) processes & procedures related to your routine business.

The “let’s save everything, just in case!” policy

This type of policy has the potential to be damaging and costly.  On the surface it may seem like an easy and quick way to do what the law requires and your business needs;  however, it is no substitute for managing business records based on sound policies and defined procedures.

First of all, the “Save Everything” policy can never be enforced unless you plan on disabling the delete key.  Unless you’re prepared to do that, you won’t be able to comply with your own policy, let alone enforce it with your staff.

Secondly, saving everything comes with a number of hidden costs that are often not considered, including the price of digital storage.  While the price of digital storage has dropped significantly in the last decade making it seem like an attractive option, there are costs that go along with maintaining and managing it.  The more you keep, the more time and money you’ll spend to back up, restore, and manage the volume you’ve accumulated.  It also makes searching for data more difficult, costing you valuable time.  Additionally, some records must be kept where the business operates, which may limit or prevent off-site or cloud storage.

Thirdly, saving everything makes it really easy to lose track of what’s there.  Just imagine what you would care about in the following scenarios:

  • Hacking or security breach
  • Virus
  • Disaster (physical or digital)
  • Lost/Stolen/Damaged hardware (thumbdrive, laptop, smartphone, tablet, etc.)

If you save everything, how could you know what was compromised?  If you had to do a restore, would you want to restore everything, or just the things that have value for you or your business?

Tips

If you are starting a new business, it may take some time to figure out which types of documents you are creating and how they need to be managed.  Even for established businesses, the influence of mobile work options and new technologies requires many organizations to re-think the best ways to manage documents and information.  Following the tips below will give you a starting point for thinking about your recordkeeping. Even if you decide to call in an information professional, implementing some of these best practices will make it easier (and cheaper) for them to help you.

  • Identify which business records must be made and kept because you need them to operate or they are required by law.  
  • Determine how long each category of business records must be kept in addition to any other recordkeeping requirements such as those related to handling personal information or maintaining data where the business is operated. This is often based on a combination of business need and legal requirements
  • Save strategically. Set rules about when and how you will dispose of records that are no longer useful, even those that only exist electronically.
  • Understand where/how your business is creating records. This includes, but is not limited to: email, social media channels (e.g. Tweets, Facebook/LinkedIn posts, YouTube channels, blogs, etc.) and all paper/electronic documents.
  • Identify core business records, organize them, and know where they are stored. For example documents related to incorporating or registering, contracts, agreements, financial statements & other financial records, professional opinions (e.g. legal/financial), meeting minutes and infrastructure.
  • Develop policies related to records & information management. Enforce them.
  • Standardize naming conventions for documents, folders, and tags (labels). This means everybody names everything the same way.  Communicate this to your staff, or if you work alone, write it down for reference.  Even having everybody record the date the same way can make a big difference.  For example: Vendor – Document Type – Date (MMM/YY) = OfficeMax – Receipt – Mar15. 
  • Define & document core processes & procedures. Records are often created to record a transaction point in a given process.  When processes are streamlined and defined, it makes it easier to identify when a record must be captured to validate/verify the work performed.
  • Devise rules for handling drafts and versioning. Some questions to consider: Will you keep all the drafts and the final version, or just the final version?  How will you track versions as it moves to completion or in collaborative projects?
  • Designate time to deal with the paperwork, even if it’s in an electronic format. This can be a great Friday afternoon project.

Additional resources:

ARMA (Association of Records Managers and Administrators) International

AIIM (Association for Information and Image Management)

Or try searching in your area for an Information Management Professional!

Lisa Ricciuti
Smart Info Management Services
The Deletist Blog
@thedeletistblog
lisa@smartinfomanagement.com