Recordkeeping: Definition, Principles, and it’s Value for Businesses

Principles of Good Recordkeeping

Depending on the type of record, good recordkeeping practice will vary and there are plenty of helpful resources out there that provide guidance in doing so. While some of them may be overwhelming, good recordkeeping practices can be simplified by learning and understanding the basic principles. According to ISO 15489, regardless of form or structure, good recordkeeping requires a record to possess certain characteristics. These characteristics can serve as guiding principles for good recordkeeping, which are as follows:

• Authenticity – A record qualifies as authentic if it is proven to: 1) appear as what it claims to be; 2) created or sent by the same person who claims to have created or sent it; and 3) created and sent the same timeframe it claims to have been made or sent. To ensure the authenticity of records, the documentation of policies and procedures for controlling the creation, capture, and management of records should be implemented. Along with that, a responsible professional should be identified and assigned as an authorized creator.
• Reliability – Content of the records should be a full and accurate representation of the transaction, activities, or facts attested to. Records should be created at the time of the transaction or activity by individuals with direct knowledge of the facts, or instruments used for the transaction.
• Integrity – Records should be complete and unaltered. Certain policies and procedures should be in place to protect against unauthorized alteration. Any authorized changes should also be explicitly indicated.
• Usability – A usable record is one that can be located, retrieved, presented, and interpreted within the given time period asked by stakeholders. It should have contextual linkage between records and documents related to the business process and transaction it is produced from.

Why It Matters

Having a good recordkeeping system helps in creating a solid foundation of information; information that a business relies on for running a safe and quality business operation. Below are some advantages that businesses can gain when practicing good recordkeeping:

Protects Against Various Risks

Good recordkeeping acts as a powerful risk mitigation tool. It can help businesses comply and stay compliant with a range of laws and regulations and industry standards. It also helps provide proof that decisions and appropriate actions have been carried out, should it be questioned or challenged by external parties or business clients. With a recordkeeping system in place, risks of confidential information leaking are eliminated by the process of destroying the information in a timely way.

In sum, recordkeeping helps in reducing risks associated with litigation and potential penalties. However, it is not limited to those types of risks only. It can also protect employees from risks that can harm them physically, emotionally, and mentally. These include the risks that are associated with their work tasks or the workplace environment. Employers should keep records concerning operational activities being done by their employees along with (Human Resources) HR-related documents. These are all beneficial in investigating, resolving, and even preventing incidents concerning employees and the workplace.

Monitors Progress and Health

Aside from keeping track of compliance and financial aspects, recordkeeping also enables businesses to monitor progress towards goals and their overall stability. As a business grows, keeping informed of all the things going on in the business becomes a challenge. This is where good records become even more pivotal for the business. Good records are able to provide leaders and business stakeholders detailed insights regarding the performance of their employees, tools and systems, and processes in place. Information from various business records serves as an instrument for in-depth analyses in determining which business assets are effective or in need of replacing, modifying, or eliminating.

Supports Long Term Accountability and Sustainability

As the business continues to grow, challenges of sustainability and accountability become even more evident. Implementing good recordkeeping practices enables businesses to safeguard and preserve important information and company knowledge. Recordkeeping gives businesses the opportunity to use a data mine that can bring in commercial advantage, and provides business intelligence for future planning and decision making.

Recordkeeping Systems

According to the Government of Manitoba, a recordkeeping system is a method of how records are “captured, organized, accessed, protected, retained and destroyed in accordance with approved records schedules.” Businesses should decide on which system is the most appropriate. Below are two types of recording systems:

Manual Recordkeeping

Manual recordkeeping uses the traditional pen-and-paper method. Usually, this system is used by businesses who are just starting out until they transition to a computerized process. But there are some who continue to use the manual system up to this day, since they find this more adequate for their recordkeeping needs. Manual recordkeeping uses mediums such as journals and ledgers to keep track of business transactions. This type of system is low-cost and easy-to-use as well. However, it puts businesses and entrepreneurs at a disadvantage when it comes to the time and effort exerted for maintaining it.

Digital Recordkeeping

Digital recordkeeping uses technology and devices. With the rapid growth of technology, a lot of manual business processes have become automated. Recordkeeping is no exception. Electronic form templates, applications, and softwares are readily available to support recordkeeping activities. Using this type of system may require money, additional skills and knowledge, but as a result, recordkeeping tasks are accomplished at a much faster pace and are more accurate.

In deciding which is the most appropriate recordkeeping system, it is best to consider if there are any policies and requirements set by relevant legal bodies.