4 Tips for Managing Your Digital Business Records.

What’s the difference between a record and a document?

All business records are documents, but not all business documents are records. 

Think of business records as historical documents. Their purpose is to keep an account of important details about your business, employees, and finances. 

Some records have specific retention periods, either determined by law or based on best practices. For example, the federal government requires companies to keep payroll records for at least three years. 

In contrast, a business document is often a “living” file that is regularly updated or changed. These are the types of files most of your staff will create and work on daily. 

While documents can contain sensitive information, they aren’t subject to legal retention periods or other restrictions. These types of files can include details such as a client’s project preferences, instructions for creating a report, or who’s in charge of bringing dessert to the company potluck.

Why do you need a document management plan for your business records?

Business records could be requested by a governing body in your industry, during a legal trial, or for an IRS audit. If asked to produce these records, it’s in your company’s best interest for you to know exactly how to find them. You never want to be in a situation where you have to tell the IRS or a lawyer that your business records are a mess, and you can’t give them what they need. There are serious fines and other penalties for not properly maintaining records.

Keeping business records organized and in legal compliance isn’t something that happens intuitively. Your company must create a document management plan that covers types of records, how they’re stored, how long they must be kept, and how to properly archive or dispose of them. 

4 tips for managing your digital business records

1. Identify retention periods and disposition methods.

For each type of record your business has, document how long it must be kept and where it should be stored. Consider the legal, administrative, and historical value of the records. The types of records and the legal retention periods associated with them will vary depending on your industry. 

A good rule of thumb is to keep original records such as profit-loss statements, tax returns, property records, and invoices for seven years. However, you’ll want to consult with your accounting, HR, or legal department to find out specific requirements for your business. 

In your document management plan, identify how to handle records once they reach the end of their usefulness or mandated retention. For digital records that aren’t highly confidential, you can simply hit the trash can icon to remove the file from your online storage. If you need to ensure a file is not easily recoverable, you can use software to overwrite the data. 

When disposing of records, be sure to keep a log that names the record and the date it was destroyed. This step is often overlooked, but these details can be vital if a legal issue pops up after the record has been destroyed.  

2. Establish access levels and permissions. 

Most companies these days keep digital copies of their records. This saves physical storage space and makes the files easy to search for. Records that are stored in the cloud have the added benefit of customizable security options. 

Determine a system for identifying the security level required for each type of record. Should only the business owner have access? Does the entire HR department need to access the records? As a general rule, you want to keep access to records as limited as possible to reduce the chances of someone mishandling the file in some way.

Once you’ve established who should have access to which records, determine what type of access they should have. For example, Onehub provides administrators granular control over users’ roles and permissions. You can decide who can view, edit, share, or download documents, and you can revoke this access at any time. To ensure you’ve granted the correct permission levels, you can “view as” each role to see what type of access that role actually has.

Creating distinct access levels for your files is much more difficult if you’re using a physical server. You may be able to password protect folders or a specific record, but you won’t be able to specify how each individual with access can interact with the file. There may be several employees who need to view the file but should not have permission to alter or delete it. That type of nuanced security isn’t available with a file that only has password protection. 

3. Ensure business records are stored and shared securely.

Business records almost always contain information that’s best kept confidential, so it’s vital to ensure your employees understand secure file sharing methods. If you’re using a cloud storage system such as Onehub, employees who have access to records will be able to share them safely without leaving the platform. Your records will be protected by bank-level encryption, and you can add additional security layers such as password protection and document watermarks.

For other file storage systems such as physical servers, carefully consider the security of the file-sharing option you choose. Email is often people’s go-to method, but it’s inherently insecure. FTP is another common option. This method can be more secure than email, though you’ll need to thoroughly vet the security protocols of the FTP vendor you choose.

It’s also important to have a plan for disaster recovery of your records. Whether you store your them in the cloud or an on-premise server, regular backups are a must. Backups ensure that you can retrieve your business records even if disaster strikes.

4. Conduct regular records maintenance.

Once you’ve created your records management plan, establish a schedule for maintaining it. This will keep you aware of any issues before they become serious problems. 

Despite everyone’s best efforts, it’s easy for this type of work to fall by the wayside once employees get busy with customers. A good maintenance plan will check that files are being stored in the proper place (e.g., in the cloud and not on someone’s desktop) and that employees are following secure file-sharing practices. Ensure that old files are being disposed of or archived to keep the storage space uncluttered.

With a solid document management system in place and regular maintenance, your company’s records will stay secure and compliant with legal obligations and best practices. 

Creating, maintaining, and disposing of records is a core part of successful business operations. Sign up for Onehub’s free 14-day trial to see how easy proper records management can be.