Records management is a very important part of maintaining a healthy business. At businesses where records management is not taken seriously, the concept is often reduced to simply the filing away of records.
Archiving and document storage are important but they are just two parts of a wider strategy of records management.
This article will explain what records management is and, in doing so, demonstrate why it is so important for a dynamic, growing company.
What is Records Management?
In large firms, records management is often undertaken by an entire department. The reason being that a company’s records define the company itself. They comprise a timeline of the firm’s history, the memories of its beginning.
Records management, whatever system is in place, consists of the creation, maintenance and timely destruction of the data points that create this history.
The management system, if done correctly, should create a functional, secure, efficient system for protecting records.
Why is Records Management so important?
For all companies, great and small, records management is important. Why? In the main, it is because of two important and interacting considerations: cost and liability.
In the United Kingdom, for example, a junior records manager is paid anywhere up to 45,000 GBP/per annum. That is a little over 6 million KSh a year and that’s for a junior manager.
This demonstrates the importance records management has for an established business. PRISM International, the international standards setting body in records management, might offer an explanation as to why. They suggest that, in a healthy growing company, the annual growth of active, in-use records grows at 25% per annum.
Those active records are obviously very important. They are what is necessary to complete the day-to-day operations of the firm: invoices, contracts, etc. They can’t be lost and they need to be readily available.
So, you can see why companies either devote office space and funds to the creation of a records management department or hire third-party records management firms to do it for them.
Without an effective system in place, the lifeblood of a business is clogged. But, of course, office space and wages cost money.
We explore how costs are affected by in-house document storage in our series on understanding space. If you want to learn more about it you can access the first article here.
The other massive implication on records management is liability.
Consider your cost, definitely, but remember shaving off a couple shillings here and there will increase profits but failing to safeguard your records might also ruin your business.
That is extreme, but in those extreme cases inefficient records management can result in lawsuits, losing contracts or a failure to recover after a disaster.
Certain contracts, with NGOs, charities or government organisations, require a comprehensive paper trail to justify their expenses. If your firm fails to keep records of contracts in order then it could lose this business.
Furthermore, records management is often about planning for the worst-case scenario. Professional records and document management companies have high-tech flood defence systems, dry powder fire protection sprinklers, secure warehouses and state-of-the-art security. And there is a reason why.
They are in charge of other company’s records. Without those records, of who owes who and which contracts are to be completed when, that company would be in disarray. It is worrying how often a business fails to recover after a fire or flood because their records were inefficiently stored.
But that is not the only protection your records need. Active records are important on a daily basis, but keeping older records safe and sound could protect you from a lawsuit down the line. Contract disputes are an unfortunate part of business. You want to make sure, if they ever happen to you, that you can back up your side with records.