Having a records management plan can be important to a small business in many ways. A regular review and backup of records will not only allow it to stay current on government requirements, but help it more easily come up with any records that are requested.
For example, if a regulatory agency asks for workplace compliance records and they can’t be produced, a small business could be fined. Or, burglars could steal customer information, potentially ruining a small business’ reputation. A records management program ensures that records are properly documented and preserved and that records that are no longer needed are properly disposed of or retired, according to the
U.S. Small Business Administration (SBA).
The SBA have their own records management policies, detailing safeguards against the removal of loss of records and the unlawful removal and destruction of records.
For Small Businesses, the program doesn’t have to be as strict, though it’s smart to follow some basic guidelines. Here are some things to consider when starting a records management system for a small business:
Start by making a list of records you need to keep to support your everyday work, satisfy long-term needs and fulfill legal requirements. Divide these into storage methods such as online, near-line that’s accessible by your network but not part of it, offline that’s not accessible by your network, and paper or microfilm. Determine a schedule for when to capture various documents, how long to retain them and how to dispose of them.
Paper documents can lead to high storage costs. The more digital a business becomes, the less paper that’s needed. Software can document business activity and automate it. This digital move can include backing up all data for records management.
Hard copies of documents required for tax purposes should be saved. However, the
IRS allows electronic accounting software programs to be used.
According to The IRS:
“You may choose any record keeping system suited to your business that clearly shows your income and expenses.” The types of records that need to be kept for federal tax purposes depend on the type of business you’re in. But for most small businesses, the business checking account is the main source for entries in the business books, the IRS says.
Here are some of the types of records it recommends keeping:
Gross receipts such as invoices, deposit information and cash register tapes; expenses to carry on a business, documented with account statements and canceled checks; and employment taxes. All records of employment must be kept for at least four years, according to the IRS.
Store It
Store your business records either at your office or pay a storage company to do it elsewhere. Consider a storage facility that is fire-resistant and monitored by security or video surveillance. Records can also be stored online with an outside company or through records management software.
Hiring a records manager who is assigned the task of records management for your company can help make all of this easier. They can also have the fun job of running the shredder when documents need to be destroyed.
