Records Management: Things Every Small Business Owner Must Do

Did you know that there are of 32 million small businesses which account for 99.9% of all US businesses? Small businesses are the lifeline of the US economy. That’s why the U.S. recognizes America’s small business owners each year with National Small Business Week. At Corodata, we hope that your small business continues to grow and prosper in 2022. One of the best ways to keep your business ahead of the curve and compliant is by having a strong records management system in place. But what if you are doing your records management yourself? Lindsay Wise, President and Founder of WiseAnalytics, recently wrote an article, The Importance of Data Management for Business People, and says, “Unfortunately, the lack of security, data quality, ability to meet compliance requirements, and the like, are just some of the reasons why independent management of data does not work.” So, what can you do to have an efficient records management system that protects your business?

Keep Everything

You should document everything from offer letters to contractual agreements and vendor agreements. Should you not have these documents on file and face a lawsuit down the line, your business will have nothing to prove its case, and this can be extremely costly, stressful, and detrimental to your business growth. Property records, intellectual property, deeds, and titles are also important to keep on file. And, in case of an audit, it is expected of you to have seven years of business taxes immediately accessible. Corodata can help you maintain your records so that you are prepared in case of a lawsuit or audit and you’ll save time, stress, and have one less thing to worry about!

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File Away All Invoices and Receipts

Your accountant is right: always keep invoices and receipts. It is important to file away all invoices and receipts so that you have an accurate track record of what your business is spending and your accountant has access to these files should you be audited. This also makes filing your taxes easier, and having a reliable records management system allows you to have everything in one place and readily accessible.

Scan On Demand

A paperless system sounds great in theory. But, in reality, did you know that if you store all of your records in the cloud or digitally, the average business only needs access to less than 10% of those records? This means that all of the time and money you’ve spent uploading files is wasted and could be used more efficiently. Corodata offers scan on demand, a system where all of your physical files are inventoried and tracked. Then, when you need a file, it will be scanned and uploaded for you. That way you save on scanning everything, and instead only pay for the files that you need.

Shred Your Documents: It’s The Law

FACTA (or FACT Act) is the fair and accurate credit transaction act, a new federal law designed to reduce the risk of consumer fraud and identity theft. This law was created to prevent the improper disposal of consumer information. FACTA requires the destruction of all consumer information before it is discarded. The best way to comply with FACTA is to professionally shred all discarded consumer information. When you professionally shred, you’ll receive a Certificate of Destruction—which is crucial in case you face a lawsuit or audit. This proves that your company has a shred policy in place and is not negligent. Using personal shredders is risky: they are slow, inefficient, and there are uncertainties around how many employees see your personal documents. Don’t take valuable time away from your work— professional shredding ensure that you are properly disposing of your documents when you need to, and that you are always compliant. As a small business owner, it is important to have a safe and reliable records management system. Should you be audited or face a lawsuit, you will have all of the paperwork that you need on hand and be prepared.