Businesses have to manage a lot of information, including employee records, financial reports, contracts, and everything in between. Whether it’s serving your customers, managing your workforce, or making financial decisions, keeping this data organized and accessible is extremely important.
On top of that, many business records need to be kept for many years for legal compliance reasons. With with retention rules varying from state to state, figuring out what to keep, and for how long, can be tricky.
Staying on top of your record-keeping requirements can be time-consuming and expensive. The good news is that a thorough records management policy can address these challenges. A records management policy can help your business stay organized, meet compliance requirements, and improve access to your data.
In this article, we’ll explain what records management is, why it’s important, and the benefits it can bring to your business.
What is Records Management?
Records management is the process of creating, organizing, storing, and disposing of business information in a structured and efficient way. It ensures that data is accessible when needed, securely stored, and properly handled to comply with privacy laws.
What is a Records Management Policy?
A records management policy takes this process a step further. It’s a blueprint for how your business will handle records from the moment they’re created until they’re no longer needed.
The goal is to keep important data organized and accessible while making sure sensitive information is stored securely and handled in compliance with privacy laws. It also simplifies retention schedules and disposal practices, helping businesses avoid fines and stay compliant.
Why Is Records Management Important?
Managing records properly helps you stay organized while protecting both your customers and your business. Poor record-keeping can lead to missing or lost data, privacy violations, and even legal issues if sensitive information like PII and PHI isn’t handled correctly.
A well-defined records management policy ensures employees can quickly find the information they need, improving productivity and reducing frustration. It also helps protect sensitive data, keeping it out of the wrong hands and helping your business avoid fines, lawsuits, and other penalties tied to privacy laws and compliance requirements.
Beyond legal concerns, well-organized records keep your business running smoothly. Whether it’s retrieving an old contract, preparing for an audit, or securely disposing of outdated files, having a plan in place saves time, reduces risk, and keeps businesses moving forward.
Why Do Businesses Struggle with Record Keeping?
Managing records might seem straightforward, but it’s easy for things to spiral out of control when shortcuts are taken or processes aren’t well-defined.
For many businesses, record keeping falls to the bottom of the priority list, especially when more urgent issues demand your attention. Without a clear plan, it doesn’t take long for filing cabinets to overflow, folders to become disorganized, and important records to get lost in the shuffle.
Another common problem is a lack of time and resources. Building an effective records management plan requires planning, staff training, and ongoing oversight to make sure everything stays on track. When businesses skip these steps, it can lead to compliance problems, privacy risks, and costly mistakes down the line.
Even small oversights, like failing to label folders properly or misplacing key documents, can snowball into bigger issues. Over time, these gaps can leave businesses scrambling to locate important records, struggling to pass audits, or even facing legal trouble for mishandling sensitive information.
What Are the Risks of Poor Records Management?
Failing to implement a records management strategy can create a cascade of problems that hurt productivity, damage reputations, and lead to legal trouble. Here are some of the most common issues businesses face when records aren’t properly managed:
Damaged Reputation
Mishandling sensitive data can lead to data breaches, theft, or misuse of personal information. When customer trust is broken, it can be difficult—if not impossible—to repair your reputation or recover lost business relationships.
Workflow Inefficiencies
Disorganized records waste time and create frustration. Employees end up sifting through filing cabinets, boxes, or poorly labeled digital folders just to find what they need. This leads to lower productivity and can negatively affect employee morale.
Loss of Critical Data
Poorly organized systems increase the risk of losing irreplaceable information. Missing contracts, invoices, or compliance records can have serious financial and operational consequences—especially if the loss goes unnoticed until it’s too late.
Financial Losses
Disorganized records can lead to missed payments, billing errors, and costly delays. Businesses may also face unexpected expenses when trying to recover lost documents or correct errors caused by poor record-keeping. Over time, these financial setbacks can add up and impact profitability.
Missed Deadlines and Lost Opportunities
Failing to renew contracts or make timely payments can damage relationships with vendors and partners. Missed deadlines can also cause businesses to lose out on growth opportunities, creating setbacks that are hard to recover from.
Cluttered Workspaces
Piles of paper and overstuffed filing cabinets take up valuable office space, creating clutter and increasing storage costs. Without a streamlined approach, businesses often spend more than necessary just to house outdated records.
Legal and Compliance Risks
Regulatory non-compliance can result in hefty fines, lawsuits, and legal fees. Industries that handle sensitive information, like healthcare and finance, are especially vulnerable to penalties when record-keeping doesn’t meet legal standards.
Best Practices for Managing Company Records
Improving records management doesn’t have to be complicated. Here are a few practical steps businesses can take to keep their records organized and secure:
Train Your Employees
Make sure employees understand what counts as an important record and how it should be handled. It’s easy for bad habits to form when expectations aren’t clear. Training sessions and regular reminders can help your team stay on track and keep records organized.
Limit Access to Sensitive Information
Restrict access to confidential records to only those who need it. This reduces the risk of data breaches, accidental disclosures, and unauthorized access. Putting controls in place makes it easier to protect sensitive information.
Go Paperless
Outdated paper processes can slow businesses down and leave records vulnerable to damage or loss. Scanning documents as they come in—also called day-forward scanning—creates an efficient, digital workflow. Electronic storage improves data security, makes it easier to find information, and helps businesses stay organized.
Establish Clear Retention Rules
Set company-wide guidelines for how long records need to be kept and when they can be destroyed or recycled. Following clear rules ensures compliance with retention requirements and keeps records from piling up unnecessarily.
Destroy Unneeded Documents
When documents are no longer needed, make sure they’re properly destroyed to prevent sensitive data from falling into the wrong hands. Set clear policies for what should be destroyed, when it should happen, and how it should be done. If you’re unsure about proper disposal methods, a professional shredding service can help.
How to Implement a Records Management Policy
A solid records management policy starts with careful planning and attention to detail. Here’s how to put one in place:
1. Document Your Requirements
Review retention guidelines and regulatory compliance rules to make sure your plan checks all the boxes. Knowing what’s required upfront helps you avoid compliance issues later.
2. Map Your Data Flow
Figure out where your data comes from and where it goes. Understanding these inputs and outputs will make it easier to organize and secure your information.
3. Get Employee Input
Talk to your employees about how they currently manage data and where they run into challenges. Their feedback can highlight areas that need improvement and help you create a plan that works for everyone.
4. Address Concerns Early
Take employee feedback seriously and resolve any issues during the planning stage. Involving your team early on makes it easier to gain buy-in and ensures the process meets their needs.
5. Decide on Storage Formats
Determine whether you’ll use paper storage, electronic storage, or a combination of both. Consolidating scattered systems into one centralized solution can simplify organization and improve efficiency.
6. Create a Filing System
Organization is the backbone of good records management. Establish clear filing rules that all employees follow to keep data accessible, secure, and easy to use.
7. Provide the Right Tools
A records management plan is only as good as its implementation. Make sure your employees have the software, hardware, and training they need to stick to the plan.
8. Maintain Your System
Once your plan is in place, regular maintenance is key. Review your files, correct any issues, and keep the system up to date. Don’t forget to train new hires so everyone stays on the same page.
9. Put It in Writing
Document your records management practices to keep your team informed and accountable. Having everything spelled out in writing ensures consistency and helps enforce the plan.
Need Help With Records Management?
Putting a records management policy in place can feel overwhelming, especially if you’re dealing with years of paper records or outdated systems. That’s where SecureScan comes in.
We offer high-volume scanning and shredding services to help you organize and secure your records quickly and affordably. Whether you need to digitize your documents, set up new processes, or securely dispose of old files, we’ve got you covered.
Contact us today for a free quote and find out how we can make managing your records easier.