importance and benefits of keeping business records essay

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The importance of keeping business records

• The importance of keeping business…

Businesses operating in a fast-paced and dynamic environment, the task of keeping records can fall secondary to everyday business operations. However, failing to efficiently keep up-to-date and comprehensive records can hurt your business’s long term operations.

Probably the most important reason behind sound record-keeping is that it allows you to learn and grow from your own business experiences. Keeping your records in check will help you understand the current situations of your business and also project future profit or losses. In addition, good record keeping will also show you where your business needs improvement or re-invention. Here a few records to keep that will prove invaluable in the future.

Financial Statements: Keeping accurate and up to date financial statements will help you at a time of lending applications. These finances include income statements as well as balance sheets that show assets, liabilities and the equities of your business at a specific date.

Purchases and expenses: The items you buy and sell to your customers and the costs of running your businesses. Supporting documents for both of these include invoices, email records, credit card slips, cancelled cheques, cash registrar tapes and account statements. These can help you to determine whether your business is improving, which items are selling, or what changes you may need need to make.

Deductible expenses: At tax return time it’s handy to have an assortment of receipts and documents that outline your deductible expenses. These can be costs of travel, transportation, uniform and entertainment.

Assets: The properties that you own and use in your business. These records verify information regarding your business assets, such as when and how you acquired these assets. They will also help you to determine the annual depreciation when you sell the assets. Examples of these records include the purchase or sales invoices and real estate closing statements.

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12 reasons why keeping good records benefits your business

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Keeping good records: • helps to maximise all the expenses you claim and reduce your tax obligations • will help out, should you be investigated by HMRC • makes it quicker to prepare your accounts at year-end • gives you the information you need to run your business and help it grow • helps you plan for tax payments • helps identify the strengths and weaknesses in your business • helps manage changes and improvements in your business • will help you plan to meet financial commitments such paying creditors or employees • makes it easier to get a loan or sell your business • avoids over/under tax payments • helps identify if your business is liable for paying VAT to HMRC • makes it easier to distribute profits to shareholders as dividends or for partnerships where both profits and losses have to be shared.

Business records can be maintained manually, computerised on a spreadsheet or kept online. Make sure the system you use is easy to operate, and complements your business. Alternatively keep hold of your receipts, bank statements and invoices and outsource the work.

Keeping business records can be daunting at first. The key is to break things down into a series of straightforward, manageable tasks. Then you can access and update them on a regular basis, rather than letting the paperwork pile up.

Every business must keep records for as long as required by the law. It is important to do so as HMRC may request to see past records if there is any issue regarding your tax. The minimum period for which you must keep records is six years for VAT or five years from the latest date for filing your tax return.

Make sure you keep all documents that contain details of payments, receipts, credit purchases and sales, assets and liabilities. If you’re not able to obtain a receipt for an expense make a note then record the details.

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Today, too many companies either underestimate the importance of records management, or view this process as a matter of convenience (rather than one of necessity). And yet, records management programs are vital for any office with ongoing recordkeeping, as they offer a number of advantages akin to productivity and cost savings. What’s more, a good records management system helps ensure compliance and quick access to your most-referenced files.

What is a record?

A record is any document that’s created or received in an office setting, and that supports an organization in conducting its business. A record — whether paper or digital — contains information that is made, produced, executed, or received in connection with transactional office activities, and is either preserved permanently or temporarily (according to a predetermined retention schedule). Records are hard evidence of an agency’s unique policies, procedures, and decisions, and often hold significant administrative, historical, and legal value.

Why is records management important?

The importance of records management lies in how it oversees information that’s been created, received, maintained, and disposed of (regardless of the document’s format). In other words, records management is important because it ensures that vital records are preserved and it supervises records throughout their lifecycle, including compliance with set retention procedures.

Ultimately, leveraging records management is the best way to guarantee records with historical, fiscal, and legal impact are accurately identified and preserved, and that non-essential records are discarded as often as is required by established guidelines.

8 benefits of efficient records management

A quality records management system can bring numerous benefits to your organization, from improved efficiency and faster retrieval, to enhanced workflows and minimized risks. The following are a few of the top reasons for your agency to invest in a records management system of its own, and start enjoying all the perks as soon as possible.

1. Easier compliance

With record compliance growing increasingly stricter, it’s crucial for organizations to have a solid record management system in place to ensure they abide by all necessary regulations. These laws and regulations can include things like HIPAA, FACTA, and/or the HITECH Act — all of which merit a well-structured approach to records management. And easier, more seamless compliance is incredibly helpful to your agency as a whole, considering enforcement for noncompliance can be quite severe (ranging from legal actions to other expensive penalties).

To make sure you follow through with regulatory compliance, you’ll likely need the help of records management technology, in addition to a trusted policy for records retention.

2. Better workflows

The truth is, most agencies don’t analyze the time spent on storing or searching for records, so it’s difficult to know how much time is wasted in the process. But when documents are stored onsite in overflowing file cabinets, there’s no doubt a lot of time is lost while trying to recover relevant information. Worse yet, after records have been retrieved, they’ll eventually need to be refiled, which takes up additional hours that could be better used elsewhere within the office.

Thanks to a unified, comprehensive records management system, your most noteworthy data and details can be conveniently accessed whenever you need them. In turn, this promotes better workflows, and boosts your organization’s ability to handle business in a timely fashion and ensure service delivery to constituents.

3. Cost savings

Consider the volume of reports and emails your business produces on a daily basis; out of all of that information, there may be only a small percentage that is actually useful (or that needs to be kept on file). Moreover, handling records — especially the paper variety — demands considerable time and money due to locating adequate storage space and printing or filing all your physical forms. Fortunately, with proper records management, your agency can gain control over the growth of its records and be sure it retains the most relevant or pertinent data.

Digital records management offers notable cost savings by reducing your storage fees and improving the efficiency of your team (i.e. less time spent searching for lost or misplaced files).

4. Effective retrieval

Simply put, information is only useful when it can be retrieved; if you’re unable to access your files when (or how often) you need, there’s almost no point in storing them at all. But with effective retrieval and accessible systems, your agency can make informed decisions in a snap. Records management software not only makes document retrieval more streamlined, but it disposes of unwanted data so that your most important items can be utilized unencumbered.

Plus, with a cloud-based records management system, data can be shared and updated remotely rather than solely on-premises. This level of retrieval capability allows managers or department leads to have all the information they need right at their fingertips, and enables them to achieve smarter, more deliberate outcomes time and time again.

5. Minimize risks

By implementing records management, your agency can readily reduce the risks of litigation and/or potential penalties. That’s because a thorough and thoughtful records management strategy can minimize the liabilities associated with document disposal (meaning it dramatically reduces the risk of fines or other disciplinary actions). In fact, well-executed records management mitigates these risks in much the same way that legal counsel or an insurance policy might — by protecting against unwanted or unforeseen future events.

While most compliance risk comes from documents that are destroyed prematurely, there is equal (or greater) risk in storing documents for too long; records can and should be destroyed after a certain number of years, depending on the file type. If a file is retained beyond when it was supposed to be destroyed, it can still be used against an organization in legal proceedings.

6. Protect data

Protecting your data is one of the greatest concerns of agencies everywhere (as it should be). Every organization, no matter the size, needs intelligent programming to help protect its personnel files and other confidential information from the threat of disaster or theft. The most effective records management systems have the ability to digitize your incoming mail, invoices, client contracts, and more, so each of these documents exists in a searchable archive as soon as it’s received. Then, when combined with a trusted IT program, your data will be properly safeguarded and available whenever it’s needed.

In that way, records management preserves the integrity and privacy of your records, and makes sure all sensitive content or employee details can’t be accessed by unauthorized users.

7. Preserve knowledge

An organization’s records are a vast database which holds the contents for any and all future planning and decision-making. Every single record created within a given business day could be used or referenced down the line in pivotal decisions, policy updates, and so on. Since records document the ongoing activities at your place of business, they’re a great resource for fact checking or confirming information as it relates to one or more team members.

This preservation of knowledge is essential for the continued success of your agency, as well for improved productivity within your department in both the short and long-term.

8. Boost morale

There’s no denying that poorly managed records, unorganized filing systems, and recurrent loss of documents creates a less-than-ideal office environment — which can have a direct impact on employees’ morale or motivation at work. Though it’s difficult to quantify how much these circumstances negatively affect your team, it’s no doubt noticeable. By implementing a strong system for records management, you can boost the overall feeling among everyone on your staff, and give increased confidence that things are running according to plan.

How the Texas Department of Insurance saved costs by setting up a records management system

Until very recently, the Texas Department of Insurance (TDI) was spending more than $300,000 annually to store Workers’ Compensation files. This expense seemed to be continually growing, given their increasing record volumes and the labor it took to manage 20,000 boxes of case files. Locating documents was a daily frustration, and the TDI team was struggling to respond to record requests in a timely manner. However, the tide really turned for this organization when they sought the help of Image API to digitize over 800,000 case files.

With the support of Image API’s digital document management , more than 50 million images were delivered to the TDI over the course of this project. In turn, the department was relieved of paying hundreds of thousands in storage costs, and dramatically improved the turnaround time for their numerous records requests.

How to easily set up your records management system

While storing paper documents is still a common approach to records management, it’s also a  costly and time-consuming method that’s growing more and more antiquated. And not only are paper files inconvenient, they’re readily outperformed by today’s leading technology solutions — which includes digital document management.

For over two decades, Image API has been helping agencies across the country to simplify their workflows via intelligent digitization , cloud content management , and digital process automation . Image API has the experience and expertise needed to resolve all types of paper-related problems, and to streamline how you circulate and share your files. When your organization is functioning at the speed of digital, you’ll be well on your way toward maximizing your time, achieving measurable results, and adding significant value to your agency for years to come.

Records management FAQs

What are the functions and uses of records.

A record contains information that is made, produced, executed, or received in connection with transactional office activities, and supports an organization in conducting its business. Records are hard evidence of an agency’s unique policies, procedures, and decisions, and often hold significant administrative, historical, and legal value.

What are the basic principles of records management?

The basic principles of records management are: purpose, verification, classification, reasonable cost, elasticity, retention, and availability. In essence, these principles dictate what a ‘good’ records management system is, and represent a structure to be sought after.

What happens if you don’t keep a record of important files?

Office records provide a history of an agency’s unique policies and decisions, and contain a lot of administrative, historical, and legal value — which is why it’s so vital to have proper recordkeeping procedures. If your organization doesn’t keep a record of its important files, you open yourself up to lost information, failed compliance or audits , and costly legal repercussions.

Meredith Kane

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By Navisteps

Published January 29, 2021

7 reasons why good record keeping is important for startups and SMEs

Record keeping is a process that most organisations cannot ignore - be it in the private or public sector . But what is record keeping and why is it important?

What is Record Keeping

Record keeping is the process of recording transactions and events in an accounting system . Since the principles of accounting rely on accurate and thorough records, record keeping is one of the basic foundations of accounting.

Importance of Record Keeping

So why is record keeping important and why should I care about it as a business owner? 

1. Prevent fraud or theft

Having a fraud prevention process by keeping detailed records of your business expenses and transactions is essential for your company - be it as a startup, small and medium enterprise (SME) or large enterprise. Having an overview of your business cash flow can allow you to understand how much cash is coming in and out of your business and produce an accurate financial statement for accounting and auditing purposes.

2. Pay your taxes

With documentation and good record keeping practices, you can pay your taxes accurately, on time, and save on penalties!

In Singapore, if a tax payment is not received before the due date, a 5% late payment penalty will be imposed. Additional penalties of 1% per month may be imposed if the tax remains unpaid 60 days after the imposition of the 5% penalty. The 1% additional penalty will be imposed for each completed month that the tax remains unpaid, up to a maximum of 12% of the unpaid tax.

As a startup or SME business owner, every dollar counts and it is important to stay prudent on such financial matters.

3. Comply with laws

Good record-keeping practices are essential because it helps companies comply with various laws in various countries. Companies should establish good accounting and expense management systems to drive good record keeping practices and retrieve or file records easily.

Increasingly, accounting and expense management systems have partnered or integrated with each other to ensure seamless data synchronization and provide accounting-friendly solutions that are affordable and user-friendly for startups and SMEs. 

4. Manage your cash flow

Cash is king when it comes to the financial management of a growing company. As evidently portrayed through COVID-19, maintaining a healthy cash flow that can sustain against pandemics and other unforeseen circumstances is very important if you want your company to survive in the long run.

This is where record keeping comes in. It helps you to identify and understand where your dollars are coming in and going out from and have an accurate projection of the health of your company’s finances. 

5. Make business decisions

Every dollar within a startup and SME is very precious and should be well-spent. Understanding where your dollars are coming from and headed to is crucial in helping you better understand and make data-driven business decisions.

Expense management software is a digital cloud solution that can help you breakdown your business expenses and retrieve insights on your business spending. As a startup or SME owner, you would want to save as much time and money as possible and focus on other important business tasks to drive profitability and growth.

6. Save time and costs 

When you need to file reports and conduct financial year end closing, a good record keeping system can allow you to save time and money as you do not have to panic and go through a last-minute rush to meet deadlines or hire someone last minute to handle it.

Digitising your documents can reduce the hassle and ensure you stay compliant with regulations and deadlines. By putting your documents and records online , you can increase operational efficiency, reduce transportation and storage costs, search records faster and easily access records from multiple digital devices. 

Otherwise, you can also consider hiring a corporate secretary . It is possible for startups and SMEs to do so as there are affordable corporate secretary services available in the market that can be less expensive than hiring an additional headcount! 

7. Prevent loopholes and oversight

Record keeping can help to justify and explain why the company management made certain decisions. Cash flow problems are also found to be one of the leading causes of failure for businesses and having consolidating records will enable businesses to make better decisions. With your business survival at stake, the possibility of having loopholes and oversight cannot be ignored by business owners and precautions should be taken. 

Record Keeping Requirements

Different countries have different regulations depending on the local laws stipulated by the government. It is important for you to do substantive research and ensure that your company’s current record keeping system is compliant with the country regulatory requirements. 

In Singapore, the Inland Revenue Authority of Singapore (IRAS) has stated a set of requirements on the proper records that companies must maintain and duration which companies should retain their records on their website . Certain documents are also required for tax deductions and tax record purposes.

Ways to Maintain Good Record Keeping

Now that we have understood the importance of record keeping, how can startups and SMEs instil a smooth and compliant record keeping system?

1. Organise your records 

Records should be well-organised and segmented and clear instructions should be given such that employees have a clear idea on how they can input company records. For example, expenses can be labelled upon submission such that the total expenses across the entire company can be consolidated and filed into individual categories. 

2. Creating a digitalised system

Digitalisation is something that should be familiar to most as talks of Industry 4.0 (the adoption of computers and automation and enhance it with smart and autonomous systems fueled by data and machine learning) had begun since 2015 and we have been moving towards Industry 5.0 (where humans will work alongside robots and machines) since 2018.

With the rapid advancement in technology and systems, many companies out there are offering new ways to move traditional processes to digitalised online systems in which it includes expense management . 

Simply go online, search and compare for what you need, and you can start digitalising your processes almost immediately!

3. Outsource the work

Startups and SMEs have a small headcount and the existing staff may not have the knowledge, expertise or capacity to perform record keeping tasks timely and accurately. Outsourcing is a good way to get work done professionally and at an affordable cost.

Focus on what you are good at and outsource the rest. Not good at accounting and record keeping? Get someone to do it instead. Use your time and energy wisely by concentrating on business activities that can help you drive productivity and profitability better. 

No use spending hours trying to figure out how to process your records when you can easily hire someone to do it professionally at a fraction of the cost.

Start Having Good Record Keeping Practices

Now that we have gone through the importance of record keeping and provided you with recommendations on how to do so, we hope that you will remember to stay vigilant and ensure that your records are properly maintained and retained! 

If you are a startup or SME owner and have any tips and advice on how companies can maintain good record keeping, let us know and we will update the article accordingly. Let’s grow and build a holistic business ecosystem together.

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• Understanding Importance Records Management

Understanding the Importance of Records Management

Learn why records management is crucial to the success of your business, and then get started with these three simple steps

Records management is a crucial element of a successful enterprise, regardless of industry. Still, many businesses fail to recognize its importance.

What Is Records Management?

Also referred to as records information management, records management is the process of supervising and administering paper and digital records. This process continues throughout the entire records management life cycle, which spans the production, receipt, maintenance, use, and disposal of information.

The records that are being managed will vary from industry to industry, but can include:

These records should be organized according to a classification system that allows for easy access, either on- or off-site or, better yet, digitally in the cloud. However, the records are maintained, the primary objective of records management is to keep necessary information organized and at the ready, both for efficient internal operations and in case of a compliance audit.

Benefits of Records Management

Reduce Clutter and Storage Costs Part of proper records management involves disposing of information that has expired, meaning that it’s no longer useful or necessary.

Government agencies  are subject to local government records retention schedules , which outline how long specific documents need to be retained for and, when applicable, how they should be discarded.

Even if you do not work for a government agency, though, you still need to be on top of your records management. For example, the IRS recommends that businesses keep tax records for seven years , as they may be necessary in certain circumstances. Bank account and credit card statements, cancelled checks, and HR records also have a shelf life of seven years, with employment tax records coming in at four years.

Organizations that fail to get rid of unnecessary documents face a never-ending accumulation of information, which has to live somewhere. This can mean a growing number of file cabinets, adding to both office clutter and storage costs.

Proper record disposal will help with part of this problem by ensuring that you only maintain the records that you really need. Digitizing takes you the rest of the way by freeing up invaluable office space.

Access Information Quickly and Easily Nothing eats into productivity more than having to search for information or documents. Yet people spend about a week searching for lost papers and items every year.

Records management aims to prevent this issue first by eliminating unnecessary documents, so that you have less to sort through, and also by indexing and organizing the records that are here to stay. Staff should be able to access the information they need quickly, reducing search times that cut into productivity and distract from the real work at hand.

Scanning documents into a digital document management system increases efficiency even further, allowing you to access, share, and update data remotely with just a few clicks.

Adhere to Regulatory Compliance As mentioned above, local governments require that certain industries maintain certain types of records for a specific amount of time, as outlined in their records retention schedules. Federal laws and regulations such as the Health Information Portability and Accountability Act (HIPAA) and the Fair and Accurate Credit Transactions Act of 2003 (FACTA) make proper records management even more crucial.

>> Learn about how to choose the right document scanner for health care  

Organizations that fail to adhere to these regulations can face costly financial penalties or even legal actions. Strict records management is the only way to ensure regulatory compliance and avoid these potentially crippling consequences.

Protect Important Information Whether or not your organization is subject to compliance regulations, protecting important company assets and confidential information is essential to your ability to function in the long term. Theft, natural disasters, human error, and deteriorating document quality are all threats to the integrity of your records.

While some companies choose to minimize these threats by storing paper documents in a protected off-site storage facility, the best and only way to prevent data loss is to go paperless by storing records in the cloud. Many digital records management systems even allow you to set specific restrictions, so that only authorized staff can access or update sensitive documents.

Save Money and Time Records management takes a lot of time and money, requiring storage space, printing materials, and staff to file and maintain documents. Of course, the time and money necessary only increase when records management isn’t handled well, and staff must search for or even replace lost records.

A digital records management system saves you these expenses by eliminating the resources associated with printing, organizing, storing, and maintaining documents. The increased efficiency that comes with such a system only further reduces costs.

Control Record Growth The process of implementing records management after having neglected it may require a lot of upfront work, depending on the degree of disorder and how long records have been accumulating for. However, once you have a plan for records management in place, you should have no trouble keeping your documents in check.

Whenever a new record is created, you should have the necessary knowledge or resources at hand to decide whether it needs to be maintained. If it doesn’t, you can dispose of it properly to avoid unnecessarily growing your records; if it does, you have a system in place to organize it logically, ensuring easy future access.

Boost Employee Motivation If employees are constantly faced with disorganized or lost records that slow or even block their workflows, they will quickly become frustrated. Energy that should go toward work instead goes toward solving problems that shouldn’t exist in the first place. Though not quantifiable, this poor working environment will certainly affect employee motivation.

On the other hand, employees who can finish work efficiently without any blockages will feel empowered by their accomplishments and eager to keep going. The difference between these two situations lies in effective records management.

How to Improve Records Management

1. Monitor Federal Regulations and Document Retention Schedules Your organization should be aware of any and all federal regulations that apply to your work. Monitor them regularly to ensure that you remain compliant with any updates that are made.

Local governments may also issue updates to their document retention schedules, so check your state’s schedules frequently.

If none of these policies apply to your business, now is the time to do some research, establish best practices for different document types, and make a plan.

2. Discard Expired Documents Once you’re aware of any regulations or best practices that you need to follow, your first step is to dispose of unnecessary documents. Keep in mind that the government regulates how certain kinds of records are discarded. For example, after the established retention period, Washington State requires that public hospitals destroy diagnostic images, but that they transfer maternity registers to the Washington State Archives for further appraisal.

Disposing of the records that you don’t need will make organizing what’s left over that much easier.

3. Digitize Everything While maintaining an effective records management system on-site or in off-site storage is possible, digitizing records is becoming the norm — and for good reason. Storing records in the cloud allows your organization to:

• Reduce office clutter.
• Minimize costs associated with printing, storing, and maintaining documents.
• Protect information from threats such as theft, natural disasters, human error, and deteriorating document quality.
• Access, share, and update records remotely, speeding up workflows and empowering you to make smart decisions based on up-to-date data.

The challenge, then, isn’t deciding how to move forward with records management so much as deciding what technology to use to do so.

>> Read records management case studies

The Alaris IN2 Ecosystem is particularly suitable for this task, with a variety of scanners  and software  solutions to make implementing and maintaining records management  easy. Alaris features that directly benefit records management include:

• Intelligent job select : Configure multiple jobs with unique settings using patch sheets, saving time on job setup.
• Outstanding image clarity and character definition : The right imaging technology, such as Alaris Perfect Page makes OCR and barcode reading more accurate, requires less data correction and manual entry and streamlines automated data delivery to applications.
• Wireless technology : Scanners function wirelessly within your existing infrastructure and applications, making integration simple and quick.
• Usability : You won’t be improving your records management efficiency if your team can’t figure out how to use the new technology. Thankfully, scanners from Alaris feature user-friendly touchscreens and can be configured for one-touch scanning . Certain scanners, such as the Alaris S2060w, even offer wireless connectivity to mobile devices.
• Sorting : Preparing documents for scanning can take much longer than the scanning itself. Kodak scanners reduce your pre- and post-scanning workload by separating out patch sheets, isolating documents such as driver’s licenses and stock certificates, and similar tasks.
• Four-layer document protection : This includes several different capabilities. Length detection protects against papers getting stuck or overlapping (which causes them to appear as one long document); ultrasonic double document detection ensures that only one document enters the scanner at a time; intelligent document protection “listens” for crumpling sounds, stopping the job in time to protect the document; and metal detection prevents overlooked paper clips and staples from disrupting the process or scratching the scanner glass.
• Intelligent barcode reading : Barcode scanning allows you to scan documents to the right place or integrate them into specific business processes. The newest Kodak scanners capture a high-resolution version of barcodes, ensuring that they can be read properly so that manual data entry isn’t necessary.
• Intelligent printing : Image addressing, patch counting, and indexing help track data in business systems, automating tasks and increasing efficiency.

Whether you’re opening a new business or are taking the initiative with your current organization, now is the time to get your records in order. Visit our site  or contact us directly  to learn more about how the Alaris IN2 Ecosystem can help improve records management!

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The Vital Importance of Keeping Your Business’ Records Organized

How you save and store your documents may seem simple. However, more manila folders tend to mean more problems — at least when it comes to contemporary record-keeping systems that are functional, scalable and secure.

In this guide, we’ll explain why a proper record-keeping system is so essential for any organization looking to maximize profits and minimize problems, plus the best content-management option on the market.

What Is Records Management?

Records management refers to a comprehensive, organized and orderly system for tracking and saving your business’ records. When successfully instated, a records-management policy will cover:

• A core file-keeping repository or database.
• A simple, sensible method to store and save new files.
• Accessible technology to retrieve and review stored documents.
• Clear timelines for how long records must be kept that adheres to statutory regulations — which can be anywhere  from two years to indefinite storage , depending on the record type.
• Responsible and compliant records disposal or deletion.

For sole proprietaries and multi-national, registered corporations alike, these records are the operational and expense paper trails. Each document reveals the financial and legal obligations of your organization and — more holistically — its operational discipline.

Here are some examples of records your business might need to keep:

• Vendor invoices and payment receipts
• Purchase invoices and payment receipts
• Auditor reports
• VAT records, if pertinent
• Customer records
• Bank statements
• Income statements and summaries
• Balance sheets
• Earnings statements
• Tax returns
• Contracts and leases
• Proof of insurance
• Business licenses
• Other wage and personnel records, like medical records and contributions to employee retirement plans.

Record-keeping, otherwise known as bookkeeping, may sound simple. However, in reality, many businesses and administrators struggle to address the sheer amount of documents flowing across departments every single day, plus the subsequent oversights, expenses and missed opportunities caused by poor record-keeping.

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Why Are Records Important in an Organization?

The importance of record-keeping for businesses cannot be overstated. Businesses must set up a standardized yet user-friendly bookkeeping system, ensuring legal, financial, regulatory and operational discipline. Doing so makes each of these functions of running a business smoother. Here are some of the benefits of good record-keeping:

1. Reduces Room for Human Error

Without this organization, employees are relegated to ad-hoc file-saving and retrieval manually performed on their own devices within their own departments. This impedes harmonized records storage, retrieval and distribution functions while introducing a larger chance for human error when handling business records since every step of the process is unstructured yet manually performed.

2. Minimizes Losses

As a result, more records get “lost.” Physical copies of paperwork get misplaced in office filing cabinets, and digital uploads dissipate into the disorganized ether of computer hard drives. New records, such as vendor invoices, are more likely to fall victim to the disarray, preventing them from entering any form of storage.

3. Decreases Audit and Compliance Risks

Proper record filing and retention is the first step to upholding industry regulations and wider business compliance. A fully orchestrated record management system ensures you can locate essential documents for tax filings and other mandatory paperwork, minimizes human touchpoints on those documents and sets up user-access controls.

Records management is even more critical for certain document types, such as financial records. Mis-archiving these files can result in severe penalties from government fines to potential legal action if the non-compliance is deemed intentionally negligent.

4. Unburdens Employees

Well-designed record management structures a clear pathway for handling files, which alleviates employees from managing ad-hoc systems themselves. It’s easy to see how this kind of individualistic method quickly snowballs into inefficiency since everyone oversees a subjective set of practices fundamentally tied to their own computer or their own team’s internal storage files.

Furthermore, with one set approach to capturing, storing, mapping and retrieving files, employees can perform work faster, knowing exactly where documents are at all times.

5. Boosts Office Peace of Mind

What employee doesn’t want tools to make their workday easier? This is precisely what a standardized approach to business record-keeping offers, packaged as part of a more significant effort to support efficient workflows and operational systems.

When employees feel their organization cares about the ease of their days and ability to perform work simply and straightforwardly, it is reflected in their work. On a macro level, managers also have stress-levels alleviated, knowing their teams have everything they need.

Top 10 Pros of Keeping Your Business’ Records Organized

Better business record-keeping assures these benefits for your organization:

1. Claim All Possible Deductions

• Maximize your deductions, with proof of expenses and itemized write-offs clearly amassed over the year for you to claim.
• Better tax planning, with documents outlining clear tax liabilities and income categories quickly funneled into filings.
• A savvier overall tax-obligation management strategy with fewer surprises and headaches.

2. Claim All Possible Vendor Discounts

Record-keeping is so vital for businesses in all industries and of all sizes because it keeps you on track with your financial commitments, both internal and external. You’ll help maximize the money flow making up your tapestry of vendors and partners, with a clear paper trail allowing you to see source receipts and find relevant cost-saving opportunities with each.

3. Create and Adjust Budgets

Organized records allow you to get a clearer picture of your organization’s expenses and overhead costs. It serves as a dollar-for-dollar paper trail showcasing exactly where your money goes, when and for what purposes.

Such orderly and readily available information improves the way you prepare budgets. Teams can readily identify the strengths and weaknesses of current budget allocations, then make informed adjustments.

4. Pay the Right Tax Rates

The  tax benefits of solid record-keeping  don’t end with maximizing deductions. It also allows organizations to make informed projections about tax liabilities, meaning you won’t find yourself under or overpaying.

Plus, your records serve as vital credence to any adjusted taxes or newly claimed deductions. IRS auditors or inspectors may require access to financial business records to clarify recorded changes, beginning with past business tax returns. They’ll expect justifications for reported items, claims, deductions and other liability categories. Having a complete, cohesive set of organized records is your best tool for getting the proper tax rate.

5. Scale Your Business

Are you applying for a loan, filing for a new permit or re-upping your business license? Are you interested in a game-changing business grant? Having records at-the-ready expedites these applications and makes the prep work for each far less stressful.

More broadly, business records will be necessary when managing any of the following licensing and permit requests, including:

• Liquor licenses
• Food preparation permits
• Seller’s permits
• Home-occupation use (HOU) permits
• Broader doing business as (DBA) statement

Depending on your industry or location, these licenses and permits may be required at local, state and even federal levels. Certain business sectors may also be required to maintain proof of insurance. Losing or neglecting these records puts your business at a higher risk for audits, fines, operational penalties and even legal action.

6. Profit Share

Companies that offer profit sharing to employees need a streamlined records-management system that makes tracking and allocating these profits easier. Without such a system, this employee perk becomes a habitual pain point for your administrators. The same logic applies to profit-sharing amongst company shareholders in the form of dividends.

7. Strategically Refinance

When timed right, business loan refinancing can lower interest rates, re-work your repayment timeline or both. However, to do so, you’ll undergo a repetitive business loan application requiring you to submit several key financial records, plus additional files to back up your application.

8. Understand Your Financial Strengths and Weaknesses

Solid, streamlined record systems ensure you can conduct a financial analysis of your business whenever the need strikes. Your records will objectively outline where your business thrives, including its top revenue sources, as well as showcase budget variability, uncertainty and top expenses.

Similarly, records clearly highlight your full business assets ecosystem, plus things like your business equity and liabilities.

9. Calculate Your Business’ Basis of Property

Basis of property refers to the original cost of purchasing your business’ office, building or property adjusted for depreciation.

To begin, temperature-checking this aspect of your investment is important for tax purposes. Basis of property calculations foremost affect depreciation deductions you can claim on your business’ taxes. It also affects gains or losses on potential property sales and exchanges, as well as amortization claims, casualty losses and other important asset-depreciation tracking.

10. Alleviate Stress

From properly preparing the full gamut of tax returns to managing everyday operational expenses, it’s no wonder administrators are often stressed, working and worrying around the clock.

A streamlined and digital-first records-keeping system alleviates many of the pain points involved in one of the simplest yet most essential aspects of running a profitable business. Good filing systems speed up core administrative activities. Great filing systems relieve the stress associated with performing these activities in the first place, letting you place your brainpower on higher strategic priorities.

Find out How Accounts Payable and Notes Payable Are Different

The Best Way to Keep Your Business Records Organized

So, what’s the ideal way to manage your business records? The answer is enterprise content management (ECM) systems.

ECM software is the most contemporary solution for businesses to cohesively capture, compartmentalize, track, change and store files and data virtually. 

These platforms offer the ideal solution to ease the most common process pain points associated with managing core business documents — the ones affecting every department or process in your organization.

What’s more, the majority of ECMs is cloud-based, so you can handle every file and piece of paper remotely, without needing to physically be on-premise or at your desk.

Why is ECM your ticket to better business record-keeping? Consider the core features of a comprehensive, cloud-based and automated ECM and the benefits each feature brings:

It’s digital:  It’s 2020 — filing cabinets stuffed with manila folders don’t cut it anymore. Plus, they come riddled with the risk of incidents like lost or damaged files, poor security and more.

It automates document capturing:  No more manually filing paperwork in bulky storage spanning an entire wall of the office before — and often redundantly after — scanning it into ad-hoc computer folders. Document-capturing software integrated into an ECM can automatically read, then digitize documents into electronic form before sending them straight to ECM storage. The most  advanced document-capture software  also codes the information on a document into readable data that can be searched in seconds.

It permits annotations:  Highlight, underline, circle and add actual notes to ECM-stored documents without creating extra copies.

It lets you e-sign and send files in the platform:  User-friendly ECMs make it easy to sign and send files directly from the software itself. Compare this to the time-intrusive downloading and hard drive re-saving necessary before you can email a document in old content-management systems, which don’t have in-platform sharing capabilities.

It instantly finds what you need:  Dynamic ECMs will have a range of search features available right there on the application’s home screen. One of the most convenient of these core features is a cross-platform document search. Compared to other internet-based filing systems, application-screen document searching lets you cross-reference files simultaneously in just a few clicks. You can even reference ECM-stored files while in other apps, allowing you to check or coordinate information without leaving the program you’re currently using.

It acts as your second eyes:  Comprehensive ECMs will come with platform-agnostic applications permitting bonus functions like a web portal search or optical character recognition (OCR) . Use key words, values or wider global search filters to find the exact data you need without sifting through half a dozen folders just to find one file with one specific line of information.

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MHC’s ECM was built by business people, for business people, all to eliminate the most frustrating process inefficiencies plaguing modern workplaces.

Request a free demo  of our leading enterprise content management platform to see how much time you’ll save, errors you’ll reduce, risks you’ll minimize and money you’ll earn from changing the way you manage documents.

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Everyone in business must keep records. Keeping good records is very important to your business. Good records will help you do the following:

Monitor the progress of your business

Prepare your financial statements, identify sources of your income, keep track of your deductible expenses, keep track of your basis in property.

• Prepare your tax returns

Support items reported on your tax returns

You need good records to monitor the progress of your business. Records can show whether your business is improving, which items are selling, or what changes you need to make. Good records can increase the likelihood of business success. 

You need good records to prepare accurate financial statements. These include income (profit and loss) statements and balance sheets. These statements can help you in dealing with your bank or creditors and help you manage your business. 

• An income statement shows the income and expenses of the business for a given period of time.
• A balance sheet shows the assets, liabilities, and your equity in the business on a given date. 

You will receive money or property from many sources. Your records can identify the sources of your income. You need this information to separate business from nonbusiness receipts and taxable from nontaxable income. 

Unless you record them when they occur, you may forget expenses when you prepare your tax return.

Your basis is the amount of your investment in property for tax purposes. You will use the basis to figure the gain or loss on the sale, exchange, or other disposition of property, as well as deductions for depreciation, amortization, depletion, and casualty losses.

Prepare your tax return

You need good records to prepare your tax returns. These records must support the income, expenses, and credits you report. Generally, these are the same records you use to monitor your business and prepare your financial statement. 

You must keep your business records available at all times for inspection by the IRS. If the IRS examines any of your tax returns, you may be asked to explain the items reported. A complete set of records will speed up the examination. 

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7 Reasons Digital Business Records Are So Important Beyond Tax Time (U.K.)

Find out why keeping digital records is such an important business practice in the U.K.

The HMRC is on a mission to make paper returns a thing of the past in the U.K. with its Making Tax Digital (MTD) initiative. Since 2019, businesses with a VAT-taxable turnover over £85,000—in other words, earning above £85,000 per year—have been required to keep digital financial records and send off annual returns using MTD-compatible software.

MTD will transform the U.K.’s tax system for good—but its benefits extend far beyond merely making life easier for the government. There are many reasons why keeping digital records is such an important year-round business practice. Done well, and it will transform your company: Making it more efficient, more profitable, and more enjoyable to run.

So let’s explore the 7 reasons why digital records are so important and how they can future-proof your business for years to come.

The 7 Benefits of Embracing Digital Records

Whether you’re looking to save time, money, or a significant amount of stress, keeping digital records will revolutionise the way that you run your company. Here’s how:

1. You’ll Save Time

As necessary as it is, admin is an incredibly time-consuming activity. Of course, not all time spent on admin directly relates to creating, organising, and maintaining information in your physical filing system—but it certainly adds another task to your list. Physical records are also far more likely to accidentally be lost or misplaced. Even if you do manage to find them, you still wasted precious time digging through papers and folders.

Accurate digital records allow you to access all your key documents in just a few clicks. Embrace one single source of truth instead of digging around disparate documents stored here, there, and everywhere. Say goodbye to the painstaking process of manually reconciling transactions—instead, most modern accounting software automatically handles reconciliations for you.

Plus, if you store your digital files or records on the cloud, your whole team has access whenever they need it. You’ll never again have to sift through folders upon folders to find that one piece of crucial information. Imagine what you could do with all that extra time. Think of all those value-add activities you could focus on instead of being swamped with endless admin. Perhaps you could follow up on your leads, spend more time creating detailed proposals, or just connect with (and help support) your team.

2. You’ll Save Money

We all know the adage: “Time is money”. Wasting hours on end doing important yet low-value admin tasks can be frustrating. Not only that, but every minute you spend on admin is a minute that could’ve been spent on valuable activities: Finding clients, completing important projects, and generally doing what you love.

So how can you make doing paperwork and tracking your business as efficient as possible? It starts with digital records. As mentioned in the previous section, they’ll save you a considerable amount of time, which means you’ll also save money… surely you haven’t forgotten that time is money.

That’s not all. Using digital records means that you won’t have to hire an admin assistant—instead, everything is automatically stored and maintained online. Plus, your existing outgoings will plummet. Why print out paper records or pay for storage when you can simply access all your important documents and information online?

3. You’ll Make More Informed Decisions

If you plan to build a successful business you need to make smart investments, scale your team if possible, and properly plan for the future. But how? With the help of your data.

For example, when you use cloud accounting software, you have an all-in-one source of truth. Connect it to your business bank account, oversee all invoices and payments, identify how much time you’re spending on various projects, and seamlessly reconcile expenses. Simply log in each day and track how your company is performing in real time.

This all-in-one source of truth means you can now make data-informed decisions. Looking to invest in a new piece of machinery or software? Dip into your digital records and check where you’re at for the month. Whether you’re in the red or in the black, you’ll know when it’s the right time to go ahead and make that purchase.

You can’t afford to wait until the end of the year to see how well you’re doing. Stay on top of your progress and plan for the future with more clarity. Not only will you make more accurate decisions, but you’ll make those decisions in just a few clicks.

Related Articles

5 Benefits of Switching Your U.K. Business to Cloud Accounting Come Tax Time

4. Your Data Will Be Secure

Data is the lifeblood of your business, so you want to ensure that it’s safe and secure at all times. That’s where digital records come in. Of course, you probably already secure your data in one way, shape, or form. Perhaps you keep all-important company files in a locked safe inside your locked office. But what if there was a fire or flood—how confident are you that your documents would survive?

While the U.K., fortunately, isn’t at risk of wildfires or tornadoes, there have certainly been a fair few floods in recent years. Still, something far less dramatic (but equally as damaging) can happen: You spill coffee over last year’s financial records. And just like that, your documents are wiped out.

Digital cloud-based storage is the best way to keep your data safe and secure . If you use Gmail, Hotmail, or Yahoo mail, you already trust the cloud to keep your sensitive emails secure—so why wouldn’t you trust it to keep your business records safe?

5. Your Customers Will Have a Better Experience

Customer experience has never been more important. Businesses that get it right attract lifelong customers who’ll stay by their side every step of the way. Those who get it wrong, however, struggle to grow—let alone stay afloat.

Digital records go a long way to ensuring top-notch customer experience . Imagine a customer calls you and wants to find out exactly how much they’ve spent over the past year: The precise quantities they bought and when. Instead of awkwardly saying, “I’ll have to go away and have a look before getting back to you”, you can immediately pull up that client’s information in just a few clicks.

Not only does this help the customer out, but it also makes you look professional. By making your records easier for you to access, you also make life easier for your customers.

6. Your Business Will Be More Agile

2020 has reinforced the need for agility. When disaster strikes, your company needs to be agile or mobile enough to keep operating. And if recent events have taught us anything, remote working is now an accepted norm—not a “once in a blue moon” occurrence.

Imagine you have to break lockdown to go into your office and pick up your physical records. Not only that, but once you arrive home, you then have to manually take pictures of each page, share them with your team, and fret about whether or not they were keeping this data secure.

Digital cloud-based records allow you and your team to access key company information from anywhere, at any time. Whatever happens, you’ll have your business-critical data right at your fingertips.

7. You’ll Reduce Clutter

Whether you run a home-based business or you’ve invested in a swanky new office, one thing’s for sure: You always need more space. Not only does an uncluttered office look nice, but it can also drastically improve productivity.

If you’re still using physical records, reducing clutter is tough. Some companies have to keep their financial records for no less than 6 years . Do away with shoeboxes on top of banker’s boxes and use digital files and records. Free up space, unclutter your mind, and stop cramming yourself into your office space. And, if you operate out of a home office, this can really have a positive impact on your peace of mind and your productivity.

Ready to Go Digital Today?

MTD has provided many U.K.-based businesses with the momentum to start embracing digital records. However, even if you’re under the £85,000 threshold or still keeping physical records (and relying on your accountant to make them MTD-compliant), you should still adopt digital records, especially if you plan to grow. You’ll save time, money, and focus, all while improving your customer experience and having the ability to make data-driven decisions.

Ready to make the transition? Learn more about how HMRC-compliant, MTD-compatible software can help your business. This post was updated in January 2024.

Written by Charlie Braithwaite , Freelance Contributor

Posted on October 8, 2020

This article was verified by Levon Kokhlikyan, ACCA

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The benefits of good record keeping.

Most people associate record keeping with tax time, but having a good record keeping system in place can also help you monitor the health of your business.

Record keeping can give you a more accurate picture of your business to help you understand how you are doing and so you can spot any potential problems sooner rather than later.

The types of records you should be keeping include:

• all income (including cash, EFTPOS, credit or debit card, online sales and other payments you may receive)
• expenses (such as operating expenses, business travel expenses, and payments you make to employees and contractors including any cash wages)
• bank statements
• records of business purchases or use of business stock for personal purposes (to help you work out the business portion to claim as a deduction, and to account for the stock used).

Good record keeping doesn’t have to be hard; the key is to find a system that works for you. Here are some tips to make keeping records easy:

• save records electronically (if possible)
• keep evidence of all transactions
• take pictures of your receipts to avoid faded records
• retain all business records including income, expenses and bank records
• keep your business records separate to your personal records.

Remember, without proper records you may not be able to claim everything that you’re entitled to come tax time.

Useful record keeping tools

If you’re a sole trader with simple tax affairs, you can use the ATO’s myDeductions tool to track your income and deductions throughout the year.

The ATO’s record keeping evaluation tool can help you review your record keeping practices and see if you’re still on the right track.

More information

For more tips on record keeping, visit the ATO website .

To learn more about keeping track of your business’s financial health, attend our financial management workshops .

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The Importance of Keeping Business Records

It is essential for any business to keep all records regardless if it is for cost management tax or regulatory reasons, for legal reasons, or for the improvement of your business management . It is crucial to collect, store, and analyze data. Why is it important to keep your records? What is important to keep and how long should it be kept? Legally, It is an obligation to maintain proper records. Keeping proper records is the law. You must always Gable to provide Papa records which can't be backed up. Fines, inspections, suspension of your business, and prison time may occur if you fail to provide adequate records. You are more likely to have record reviews and inspections if you are a contractor, work in the industries of plumbing, construction, or electric. Any legal association that your business is in will require you to have records.

What is Record to Report?

An accounting and finance Management process, Record to Report also known as R2R , is a process that provides accurate and timely information, relevant delivery and processing, and collection. Financial, strategic, and operational feedback is given by record to report to show the performance of the business. Insight and feedback is provided by the information which is then delivered to stakeholders so that they may decide whether a business's performance is successful or if specific expectations are being met. It is extremely important where a proper and stable Record to Report process to be in place for a company. Are mission critical objectives to be in parade it is important to reduce the length and optimize enabling of cycle scarce financial resources. Decision making and analysis can be added with cycle completion. Cost reduction and value enhancement can be complete with a proper Record to Report cycle.

Processes For Proper Record Keeping

The most difficult year is usually the first year for small business owners. You must first decide what type of business you want and then learn to keep a proper business record. For small business owners, keeping bad records can lead to a downfall. Keeping track of receipts, tax returns and other records during the year can help you avoid frustration. Progress of your business can be seen by keeping proper records by showing what necessary changes are a needed, if there's business improvement, and what products are being sold.

Estimated tax payment projection: you must project tax liability especially during the first year, so that tax payment estimates can be made. A method that many utilize for tax payments is estimate tax.

Financial statement preparation: for accurate financial statement preparation keeping good records is a necessity.

Identifying receipt sources: property and money can be received by various sources sources of receipts can be identified through your records. Personal and business receipts can be separated through this information as well as income that is taxable and non-taxable.

Deductible and expense track keeping: during tax return preparation, certain expenses may be forgotten if deductible expenses are not recorded. This is why it is important to keep a record recording system.

Tax return preparation: records must show proper credits, income, and expenses in order to prepare tax returns.

Supported items or tax return reports: records must be available for IRS inspections so your tax returns can go through a proper review. The items you report may need to have an explanation. Having separate records can make for a speedy process. You must keep certain records for at least 3 years or more. These records include the sale or purchase of a home, business and IRA rental properties, as well as stock transactions.

Advantages of Proper Record Keeping

Proper record-keeping can be valuable tax savings. Through proper record-keeping, finding multiple expenses can be easy. This allows the business to pay only what is necessary as well as collect all of their income. Tax auditors may have to make income decisions based on their best judgment without proper records forcing the auditor to base the audit on industry standards.. These decisions may include location, size, and business-type. The length of it audit can be short with proper record-keeping. By having proper records, the auditor can make a speedy and accurate audit. Proper record-keeping goes in compliance with the law and keeps businesses informed about their financial situation. It enables business owners to see where improvements and changes are need

Types of Records

Certain types of records need to be on file. These records may include: business expenses, credit card and bank statements, tax accounting records, payroll information, quarterly tax filings, inventory information, purchase orders, invoices, tax and accounting records, sales information and check information, as well as HR documents.

Emails, employment applications, and other business contact information is also important to document. Accident reports as well as licenses and permits is what's your business needs to have should also be kept on file. Because of the data protection act, established in 1988 to 2003, you have the obligation to securely store personal information which can be provided by request only.

How Long Should Recorded Information be Kept?

A business should never have any excuse to not possess information indefinitely, as data retrieval and storage costs are decreasing. It is important for you to keep information at least 3 years or more after recording the information.

In conclusion, it is extremely important to maintain proper records when running your business not only for data and storing records but also to analyze information.

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Peer-reviewed

Research Article

Do business records management affect business growth?

Roles Conceptualization, Data curation, Formal analysis, Investigation, Methodology, Resources, Software, Supervision, Validation, Visualization, Writing – original draft, Writing – review & editing

* E-mail: [email protected]

Affiliation College of Economics and Management, Taiyuan University of Technology, Taiyuan, People’s Republic of China

Roles Conceptualization, Data curation, Formal analysis, Methodology, Resources, Validation, Writing – original draft, Writing – review & editing

Roles Conceptualization, Data curation, Formal analysis, Methodology, Validation, Writing – original draft

Affiliation Faculty of Planning and Land Management, University for Development Studies, Tamale, Ghana

Roles Conceptualization, Data curation, Formal analysis, Investigation, Methodology, Writing – original draft

• Clement Mintah, 
• Mohamed Gabir, 
• Felicia Aloo, 
• Elvis Kwame Ofori

• Published: March 10, 2022
• https://doi.org/10.1371/journal.pone.0264135
• Reader Comments

The implementation of a records management plan is an excellent approach to ensure small and medium-sized enterprises (SMEs) are sustained and continue to expand into huge or multi-national corporations. Maintaining records helps businesses in making better judgments and developing appropriate policies, resulting in enhanced effectiveness and efficiency. This will leverage means for tracking business progress and making appropriate decisions to expand the productive component of the economy. SMEs Business growth will help generate tax revenue for the government while also encouraging poverty reduction through tax transfers. We conducted a thorough investigation to determine the impact of each variable on business growth. For statistical analysis, a partial least squares structural equation modeling (PLS-SEM) methodology was applied. The results suggest that business records management and training have a positive indirect effect on business growth. However, the indirect effect of business records management policies insignificantly influences SMEs’ adoption of adequate record-keeping procedures, which harms business growth in Ghana. On the other hand, the total effect of the variables such as business records management training, business records management policies, and business records management positively impact business growth. Findings make a significant contribution to existing knowledge in the areas of record-keeping, management, and business growth. Business records management is an issue that requires more policy attention. This will business owners and managers strategically plan for new business directions based on data acquired. Proper record-keeping is necessary to satisfy end-users such as company directors, shareholders, external auditors, investors, creditors, and other interested parties. SMEs place a high value on business records management because of the impact it has on their long-term viability. The research outcomes provide a means for, and data on, business appraisal and management strategies.

Citation: Mintah C, Gabir M, Aloo F, Ofori EK (2022) Do business records management affect business growth? PLoS ONE 17(3): e0264135. https://doi.org/10.1371/journal.pone.0264135

Editor: Rogis Baker, Universiti Pertahanan Nasional Malaysia, MALAYSIA

Received: November 17, 2021; Accepted: February 3, 2022; Published: March 10, 2022

Copyright: © 2022 Mintah et al. This is an open access article distributed under the terms of the Creative Commons Attribution License , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Data Availability: Kindly find the original link to the dataset published on mendeley to replicate the study: ( https://data.mendeley.com/datasets/s3zt27txfj/1 ) DOI: 10.17632/s3zt27txfj.1 The title of the dataset is: “Do business records management affect business growth?”.

Funding: The author(s) received no specific funding for this work.

Competing interests: The authors have declared that no competing interests exist.

1 Introduction

Small and medium-sized enterprises (SMEs) are critical to the economic success of most developed countries. Because complete and correct business records are vital for decision making, small-scale business operator units should ensure that they are retained [ 1 ]. This can be ensured by undergoing record-keeping training and recruiting informed and professional employees. SMEs employ approximately two-thirds of the country’s workforce, contribute to government income generation through income taxation, and offer household income through taxes, profits, and salaries, to name a few [ 2 , 3 ]. Therefore, there is a need to encourage SMEs to maintain proper records for the survival and growth of small businesses [ 4 ].

According to Prasad, Green [ 5 ] argues that increasing SMEs will help to expand the size of the economy’s directly productive sector; create government revenue; and, overall, support poverty reduction through tax transfers, job income, and business ownership. Apart from the tremendous and commendable contributions that these SMEs make to the economy, the industry still faces some obstacles that must be addressed if the sector’s potential is to be fully realized. The reliability of SME records keeps investors interested in investing and financial institutions interested in giving out loans to finance businesses [ 6 ].

In a study done by Tagoe, Anuwa-Amarh [ 6 ], SMEs have difficult times obtaining financial resources to support their operations because they lack sufficient financial records, which are required for loan access. To efficiently produce and supply services, entities must embrace good record maintenance in some manner. Maintaining good records is an important organizational resource that can serve as information and knowledge for the entity to become more functional, regardless of its format.

Many countries and researchers have regarded SMEs as the backbone of a country’s economic development [ 7 – 10 ]. Despite their contributions, these enterprises are confronted with numerous challenges in growing and managing their enterprises, which could lead to the collapse of these small and medium-sized firms, as suggested in [ 11 ]. As cited in Ezejiofor, Olise [ 12 ], 60 percent of SMEs still fail during the first five years of their establishment. As a result, SMEs must keep track of their operations to ensure their growth and long-term viability [ 13 ].

Further research by Nyabwanga and Ojera [ 14 ] shows that SMEs play an important role in reducing poverty and opening the door to national economic progress. Hence, a need to leverage means of supporting SMEs to maximize their potential.

Records management aims to provide precise and comprehensive information for operational decision-making in the organizational management process, according to Ngoepe [ 15 ]. Given the above, IRMT and WB [ 16 , 17 ] affirmed and stressed the necessity and need for commercial and public entities to keep proper records for the successful functioning and efficiency of organizations, no matter how small, as well as the format for records, keeping. According to IRMT and WB [ 16 , 17 ] maintaining appropriate records is important because it aids in the cataloging of government choices and activities, as well as those of other organizations, and thus serves as a baseline against which future decisions and activities can be assessed.

More specifically, Kusi, Yussif [ 18 ] asserted that issues including mismanagement and inadequate record-keeping procedures have been identified as severe management problems in the SME sector, resulting in the premature collapse of most entities. As a result, the focus of this study is on the relationship between business records management and its impact on the long-term viability of businesses.

2 Review of literature

This study made use of two dominant theories, namely the records life-cycle theory and the records continuum models, which are underpinning theoretical bases for records management and archival fields, to determine whether business records management can help in sustainable decision-making and business sustainability. According to McKemmish, Piggott [ 19 ] in the field of records management, other scholars have expressed interest in and acceptance of the records continuum model as an alternative to the records life-cycle model for accounting for records management approaches [ 20 , 21 ].

This viewpoint is shared by many archivists and records management experts. The records life-cycle theory is claimed to be the most comprehensive and integrated method of records management. The basic goal of a records management program, according to Mokhtar and Yusof [ 22 ] is to monitor records, regardless of kind or format, to guarantee that they transit efficiently and at a low cost through production, use, inactive storage, disposal, or permanent retention phases. Furthermore, Mokhtar and Yusof [ 22 ] feel that records management may be viewed as a valuable asset in the same way that cash, personnel, and tangible assets like land and buildings can. Both primary and secondary functions enhance accountability and reduce risks by assisting in the decision-making process. As a result, the records management idea can be incorporated into the overall business management strategy. Many archivists and records management specialists have endorsed this notion. The cycle idea is claimed to be the most comprehensive and integrated method for records management.

This explains why it is frequently used as a framework for managing public sector documents in Eastern and Southern Africa Ngulube [ 23 ]. However, research on private sector records management has gotten little attention. This will help strengthen policies and position records management as a management tool and a means for corporate sustainability. Meanwhile, the private sector has been hailed as a source of economic progress and a pioneer in the field of sustainable development [ 2 ]. Individual and company decisions and behaviors are frequently said to be based on theory. As a result, the record continuum theory gives theoretical support for the retention and management of commercial records.

In a more simple term, Dikopoulou and Mihiotis [ 24 ] defined records as information generated by an organization or individual and preserved by them to fulfill a legal duty or conduct business. Experts argue that record management entails applying systematic and scientific control to all recorded information that a company needs to run its operations sustainably. The concept of company records management is worth accepting for sustaining the failure of most SMEs through sound decision-making based on record generation, information, accessibility, authenticity, and utilization. This will aid in legal compliance, commercial considerations, and sustainability issues [ 9 ]. As a result, this concept has been adopted, modified, and expressed in a more business-oriented context as a means of ensuring the survival and sustainability of small and medium-sized firms.

2.1 The concept of SMEs

The primary importance of SMEs in the industrialization process and development of countries throughout the world, for sustaining growth and creating jobs in developing economies, cannot be overstated [ 25 ]. The vast significance of SMEs has been recognized by most business researchers. Given the significant role, they play in the economic sectors and countries’ progress, they have been proclaimed as an engine of growth and a development-driven instrument for the domestic economy [ 26 ]. SMEs, however, have different definitions in different countries. These are defined by the quantity of money invested, the rate of turnover, and the strength of the employee or team.

From a broader viewpoint, most SMEs in Canada, according to Adjei [ 27 ], use the employee threshold method as a criterion for classification. As a result, small businesses are defined as those with less than (100) employees, while medium-sized businesses are defined as those with fewer than (500) employees. In the case of Ghana, the National Board for Small Scale Industries (NBSSI) classified small enterprises based on the number of employees and fixed assets. Micro enterprises are defined as businesses with fewer than five people, whereas small-scale businesses have no more than nine employees and a maximum of 10 million Ghana Cedis in machine and equipment for their operations, according to the NBSSI [ 28 ]. Businesses with fewer than ten employees are considered and defined as small-scale firms, according to Ghana Statistical Service [ 29 ]. Medium and large-sized businesses are defined as companies with more than 10 employees. The employee threshold strategy of grouping organizations, Osei, Baah-Nuakoh [ 30 ] cited in Ibrahim and Musah [ 9 ] pre-engineered this conceptual idea. A micro firm, according to them, is a company with fewer than six employees, but a company with six to nine employees is considered tiny. They also designate a company as "small" if it employs 10 to 29 people. According to the referenced source, a total of 29 employees have been assigned to SMEs’ business classes [ 9 ]. As a result, the scope of this academic discussion includes the classification of SMEs as well as the methodology employed.

2.2 The position of the business records management concept in SMEs

Record keeping also referred to as documentation, is an organizational function that is responsible for the management of information throughout the development process of an organization, from generation to disposal. Document recognition, categorization, preservation, protection, extraction, monitoring, and disposal or permanent preservation are all part of this operation. Per the ISO 15489–1: 2001 benchmark, documents management is a field of management that is responsible for the efficient and systematic control of the creation, receipt, maintenance, use, and disposition of records, as well as the processes for capturing and maintaining evidence of and information about business activities and transactions in the form of records. According to the United Nations (UN), records are "information made, received, and preserved as evidence and information by an organization or person in the course of legal duties or the conduct of business by Australian Records Management Standards [ 31 ]. In the context of our work, what does it mean to keep records? It means that whenever you create or receive a document as part of your job that contains evidence of activity, decision, or transaction, you must keep it in compliance with UN retention schedules. That piece of paper becomes a record, and it must be stored in a safe place for as long as it is needed. Data collected on a specific subject or activity that is kept for future use is referred to as a record. Preserving records assists organizations in making better judgments and developing appropriate policies, resulting in enhanced effectiveness and efficiency [ 32 ].

In line with the above, Okoli [ 33 ] suggests that small and medium businesses may use a variety of record-keeping systems to achieve various purposes. The link between proper record keeping and small-scale business is a profitable one. Some of these services include assisting firms with operations control, business protection, and profit and loss monitoring. As a result, these allow business owners and managers to strategically plan for new business directions based on data acquired. As previously said, good record-keeping is necessary to satisfy end-users such as company directors, shareholders, external auditors, investors, creditors, and other interested parties. Good business records reflect how authentic, real, and fair business activities are, and they provide value to the company. More importantly, accurate records assist external auditors and revenue collectors and a major fault in financial administration originate from a failure to combine accounting and records management systems, resulting in inaccuracies and the loss of vital data [ 34 ].

The problems with the poor state of, SMEs’ records management systems are also stated explicitly as one of the main reasons why accounting standards will not be easily applied in developing countries [ 35 ]. When accounting systems are weakened as a result of inadequate record-keeping and administration, records may be unavailable for decision-making [ 15 ].

In light of the foregoing literature, it is prudent to keep and manage essential records properly throughout the RM life cycle to enable entrepreneurs to identify internal and external problems and work them out properly and effectively, as well as to use them as strategic planning tools for expanding their businesses.

The study concludes that any company that overlooks the need for effective record management techniques will most likely go out of business after the fiscal year and will always have issues with external auditors. Due to the commercial prospects it represents, most entrepreneurs keep records of prior events or activities and include them in their business planning and control. It is difficult for enterprises or organizations to avoid risk, as stated by [ 15 ]. What matters is being able to recognize and resolve issues that the company faces. Records management is essential for recognizing and analyzing hazards. This strategy aids in the formation and administration of a successful business. Management is the process of planning, controlling, organizing, staffing, leading, coordinating, and directing resources [ 36 ].

As a result, business management can be described as the act of utilizing available resources to achieve an organizational goal at the company level. The following records are kept in a business setting: cashbook, inventory book, a statement of financial position (balance sheet), a ledger or journal, a statement of revenue and expenditure, a statement of comprehensive income, a cash flow statement, and a cash budget are all examples of financial statements. Receipts and payments are all examples of books that are kept. These records are classified as non-human resources in business operations, but they play an important part in corporate planning, growth, and good decision-making processes.

Users must comprehend what management comprises to better grasp and appreciate that record management affects business. Human and non-human resources are leveraged into the management process to attain corporate goals [ 36 ]. Records keeping can be defined as one of the non-human organizational resources that, if properly maintained, will contribute to the growth and development of SMEs.

2.3 The need for SMEs to keep and manage records

According to Ernest [ 37 ] records management programs aids in improving the effectiveness of records as a management memory that manages the hours, equipment, and space given for records, and in simplifying intra-organizational and communication challenges by coordinating and protecting an institution’s records. According to the aforementioned literature analysis, information and data derived from a successful and efficient records management program help businesses plan effectively and make informed decisions, as well as preserve facts and statistics for future use. As a result, the enterprise’s organization and management will be more efficient and effective. Further research Amoako [ 38 ] confirms that the success and growth of a corporation are influenced by financial accounting systems. Other academics agreed that the success of the SME sector will be determined by the quality of financial accounting data used [ 39 ]. As a result, there is a link between the quality of accounting systems used in a commercial setting and the performance of the business.

The majority of SMEs have failed, owing to the weak accounting processes used by these businesses. Systems of accounting are critical in assessing a company’s profitability and growth [ 26 , 38 , 40 ]. It is critical for a system of accounting to be supported due to the following reasons; SMEs must employ an accounting system that allows them to determine the volume of sales, profits and losses, assets, and liabilities at any given time to achieve maximum business growth [ 41 ]. Records-keeping practices can be factored into business decision-making processes and thereby can be used as a strategic approach to enterprise growth and development. The failure of most enterprises in Ghana and Africa may be traced back to a lack of good record-keeping in our industry. Some business units in Ghana ask for and use daily reports and records for their operations.

Research conducted by Davis, Dunn [ 42 ] re-emphasized the need for adequate record-keeping in allowing state agencies to effectively plan their initiatives. Misappropriation of resources occurs in the majority of situations as a result of a lack of records or data when it is required by management. Customers can get in a bind with SMEs because of inaccurate records that make it difficult to completely explain and ascertain transactional concerns. Furthermore, managers can use accurate and readily available data to clarify particular concerns with consumers, clients, and the broader public. This aids in the avoidance of conflict and the establishment of solid customer relationships, as well as business growth and strategic business planning.

2.4 Challenging issues in records keeping and management

The underpinning issues in records keeping have been outlined by [ 43 ]. Inadequate records management policies, trouble managing electronic records, issues with standard compliance, poor staffing, and professionalism, and poor disposition and retention of records are all key issues. Further literature divulges; inadequate knowledge on record keeping, low educational levels, the cost for hiring professional accountants and owners attempt to keep records in their memory are also challenges that result in poor records-keeping among SMEs [ 44 ].

Owing to the above, Yussif, Kusi [ 26 ] posited that the main challenges of record-keeping in the SME sector can be said to be lack of knowledge, education or technical competence, inadequate logistical capacity as well as failure to recognize the essence of records, poor regulatory framework or standardization.

Furthermore, it is self-evident that preserving records is critical in the SME sector. However, a significant proportion of these SMEs have been found to keep no records at all [ 9 ]. There are numerous arguments for the current situation. More so, Kyobe, Molai [ 45 ] outline some of the main obstacles for managing records which are related to policy issues, compliance with laws and regulations, the nature of the records held and used, where they are located, accountability, and responsibility of users, and the type of data held and utilized. Despite other challenging issues being suffered by SMEs, record-keeping has been frequently cited as a key driver of success [ 46 ]. Proper record-keeping has been distinguished as a domineering factor influencing the performance of business entities.

Also, Mwangi, Ng’etich [ 47 ], further explained that inefficiency and lack of records have been undisputable factors in the collapse of many SMEs. Research by Ibrahim and Musah [ 9 ] stated that many SMEs failed because owners and managers were unable to make timely and important managerial choices due to a lack of proper records. Many people have mentioned the advantages of keeping records. Some people wonder why certain SME owners don’t keep track of their finances. It appears that the importance of record-keeping in corporate decision-making, growth, and development is often overlooked by entrepreneurs. Without a doubt, most business owners are unaware of the need for keeping records.

2.5 Theoretical and conceptual framework: Records management and business sustainability

To have a thorough understanding of business records management and SMEs’ long-term viability. The records continuum model Evans, McKemmish [ 48 ], and the decision-making theory [ 49 ]. The study was guided by a conceptual understanding of business sustainability and business records management as a framework-specific philosophy. The goal is to better understand the interactions between business records management and SMEs’ long-term viability (businesses).

In addition, we have presented the conceptual perspective of business records management and business development, and we have concluded by drawing a link between business records keeping entrepreneurial growth and development, and the records continuum theory, decision-making theory, and resource-based theory. However, all theories were explored, established, and linked. (See Fig 1 ). The concept of business records management is now positioned as a cross-edge approach to track business growth.

• PPT PowerPoint slide
• PNG larger image
• TIFF original image

https://doi.org/10.1371/journal.pone.0264135.g001

We have situated business records management as a strategic management tool for corporate sustainability and growth, complementing and serving as a critical engine for tracking regional, economic, and social development in Ghana. Given the important role that these SMEs play in economic development, the continuity of this action will place SMEs on a sustainable development scale, ensuring economic prosperity, since accurate and timely records of information help make good business management and operation decisions [ 1 ]. Hence, we accept the concept of business records management as a business management strategy and means of making successful decisions that lead to business growth as a good idea. We have empirically tested and established the connection between the dependent and the independent variables, the outcome of this research has been elucidated in the conceptual framework below.

More crucially, having acknowledged and echoed the key purpose of SMEs, and the government effort in promoting SMEs growth [ 2 , 7 , 50 , 51 ]. We complement government effort by researching and designing business records management concept to safeguard and sustain SMEs in Ghana and across the globe, emphasizing their complete implementation and use as a check for business growth, decision-making, and survival. The findings of this research aid the survival and expansion of small enterprises to grow into multinational companies. This scholarly study is an addition to the body of knowledge on records management techniques. The findings benefit all SMEs around the world, not just in the context of Ghana. This research will provide investors or stakeholders in businesses with the groundwork needed to develop and adopt rules and practices that will assist them in better managing business records. The results establish strong support for records management and business tracking and growth.

Geographically, the research covered the Eastern region of Ghana.

This is an area where SMEs owners faced various challenges in their recordkeeping process including lack of accounting knowledge and absence of specific guidelines for bookkeeping and accounting recordkeeping, fear of discouragement in case of a loss, inadequate education and training skills, and cost and time constraints [ 50 ]. This has contributed to the swift failure of most businesses in the area. The main objective was to find out the impact of business records management on business.

Nonetheless, policymakers will have a starting point. The data reveal that company components that focus on spending have the greatest impact on business growth explanation. The study, on the other hand, SMEs ’ credit accessibility and records management compliance are critical variables that will drive economic progress. By embarking on this study, the importance of governments around the world using records management studies to guide policy changes has been stressed and echoed. After testing the hypotheses, the following observations were established:

• Hypothesis 1: Business records management training is positively related to business records management policies.
• Hypothesis 2: Business records management training is positively associated with business records management.
• Hypothesis 3: Business records management training is insignificantly associated with business growth.
• Hypothesis 4: Business records management policies are positively associated with business records management.
• Hypothesis 5: Business records management policies are insignificantly associated with business growth.
• Hypothesis 6: Business records management is positively associated with business growth (See Fig 2 ).

https://doi.org/10.1371/journal.pone.0264135.g002

3 Modeling, methodological framework, and data

3.1 model specification.

We looked into the link between business records management and long-term business viability and business growth. This is an exploratory research work that used the survey approach. Using partial least squares structural equation modeling (PLS-SEM) methods, the investigation followed a well-established pattern. Because it can test theoretically supported linear and additive causal models, structural equation modeling (SEM) is a popular tool in marketing research. It is a second-generation multivariate data analysis method that is often employed in marketing research [ 52 ]. Marketers may use SEM to visually investigate the links that exist among factors of interest to prioritize resources to better serve their clients, a technique known as visual analysis. Because SEM may be used to analyses unobservable and difficult-to-measure latent variables1, it is an excellent tool for handling business research difficulties Bollen [ 53 ] and Jöreskog and Sörbom [ 54 ] employed structural equation modeling (SEM) for the first time in social sciences, serving as academic advisors for Wold [ 55 ] who founded the LISREL CB-SEM software package. Then, PLS-SEM was significantly improved by Ringle, Wende [ 56 ]. Hair, Ringle [ 57 ] explain that CB-SEM is used to evaluate the goodness of fit, which is concerned with minimizing the disagreement (differences) between the observed and calculated covariance matrices. Its use is recommended for testing and confirmation in cases when the preceding theory is robust or there is a compelling reason to do so. However, when doing CB-SEM, researchers or practitioners should make the assumption. The first is that the sample size of the data should be substantial, at least 200. Hair, Ringle [ 57 ] recommend the smallest sample size possible based on the model’s complexity and fundamental measurement model properties. According to Goodhue, Lewis [ 58 ], the sample size should not be the primary justification for using PLS-SEM because it lacks enough statistical power when sample sizes are small. They advocate PLS as a more powerful approach than CB-SEM when modest sample size is feasible. CB-SEM statistical software is available in AMOS, LISREL, MPLUS, and EQS, whereas PLS-SEM is available in SMART PLS. However, we opted to use smart pls as it suited our research objectives see [ 58 – 61 ].

BG = Business Growth

α = Trend/Constant

β = Coefficients

RMP = Records Management Policy

BRM = Business Records Management

BRMT = Business Records Management Training

ε = Error of term

3.1.1. Ethical approval.

Ethical approval was sought from the Taiyuan University of Technology Institutional Review Board (TYUTIRB/SEM/2021/89) and the National Board for Small-Scale Industries (NBSSI) in Ghana to conduct the study. A recording device was used to take oral consent from participants as indicated by the ethics committee. The purpose of the study and other details were disclosed to the authorities and participants. Participants were not financially induced or coerced to take part in the study. It was explained to them that their participation was voluntary.

3.2 Empirical results and discussions

The results are shown in Table 1 specifies the descriptive statistics of our respondents.

https://doi.org/10.1371/journal.pone.0264135.t001

From the data obtained, most of our respondents were males, which accounts for 63% whereas37% were females. This is an indication that most men are actively involved in doing business in Ghana. Again, 16% of our respondents were between the ages of 31–40, 45% between the ages of 41–50, 10% between the ages of 20–30, 23% between the ages of 51–60, and 5% are 60+ years respectively. Our survey made use of the working group of 15 years or older as specified by the International Labor Organization. A vast majority of our respondents were within the active population of the country. Hence, valid data were gathered from the respondents to form the basis and justification for the research.

Of the respondents, 9% had a tertiary level of education, followed by 38% with secondary education, 41% with basic education, and 12% representing respondents with no educational background. This is an indication that a higher percentage of the respondents who graduate from both basic and secondary schools in Ghana are actively involved in businesses. The findings from the descriptive statistics show that a higher percentage of our respondents are single which accounted for 58%, 15% are married, whereas 9% and 18% are divorced and widowed respectively. A high percentage of our respondents, therefore, were single. Perhaps this could be an indication that most SME operators are single, energetic, or have enough time to enough time to do business in Ghana without family stress and responsibilities. The SME operators are engaged in businesses such as manufacturing, tailoring & dress-making, hairstyling, animal farming, cassava processing, petty trading, carpentry, and shoemaking (26%, 20%, 13%, 11%, 9%, 8%, 7%, and 6%) respectively.

More importantly, the research divulges that a greater percentage (71%) of the SME operators have registered their businesses whereas 29% have not registered their businesses. This indicates that the government is losing 29% of its tax revenue if businesses are operating without licenses. A higher percentage (30%) have registered their business at Registrar General Department, 22% of the SMEs operators have registered with the District Assembly, 19% with the NBSSI, and as high as 29% have not registered with any of the above institutions. We, therefore, call on the agencies responsible for the task.

The survey results show that 67% of the SME operators, manage the business themselves, whereas 27% and 5% play supervisory and clerical roles respectively. Therefore, tax officials can contact SME operators who are operating informally within the business sector and accrue all tax revenues owed by them to the state for developmental projects.

3.3 Measurement of reliability and validity

Table 2 shows the Cronbach’s alpha and composite reliability values which were examined to determine validity and reliability of the scale for the research—the results for Cronbach’s alpha were higher than the recommended value of 0.7. This indicates that the scale merits the assessment of the research items. Specifying the respective loadings, the scale objects in the measurement model contributed significantly to this study, with a value between 0.766–0.976. This depicts excellent internal reliability see Table 1 Bagozzi and Yi [ 62 ]. Inferring from Fornell and Larcker [ 63 ], he argued that an average variance above 0.50 convergent validity is best achieved. The Average Variance Extracted (AVE) of all variables met the minimum requirement as the least was 0.591and the highest 0.881. Both reliability and internal consistency of all variables or constructs are also confirmed by rho_A and composite reliability (CR) values.

https://doi.org/10.1371/journal.pone.0264135.t002

The result of the Fornell-Larcker criterion is shown in the lower triangle of Table 3 . The square roots of the average variance extracted are shown in diagonal elements, with the findings of HTMT.85 marked with an asterisk in the upper triangle.

https://doi.org/10.1371/journal.pone.0264135.t003

The results in Table 3 show that the tests are both valid and reliable. Heterotrait-Monotrait Ratio (HTMT) is a novel indicator for determining discriminant validity in variance-based measurement models like partial least squares (PLS). To be on the safer side, it is ideal to combine both testing methods to ascertain a reality despite Henseler’s demonstration regarding the latest method, HTMT, which outperforms the conventional Fornell-Larcker criterion [ 64 ]. The pairwise correlations between the other latent components were compared to the square roots of the AVE values using the Fornell-Larcker criterion. Discriminant validity is defined when the square root of the AVE is greater than the pairwise correlations for each construct of the measurement model, as was the case with the data reported in confirmed by rho_A and CR values.

Hypothesis result and consistent PLS. The partial least squares structural equation modeling is shown in Table 4 . The offered hypotheses were evaluated using the PLS-SEM technique since we are confident of in-depth results as suggested by PLS-SEM [ 65 ]. If the investigation is about the evolution of an emergent classical model, Hair suggests using PLS-SEM. Given that the current study model is a Ghanaian adaption of Bang’s model, it is permissible to investigate Lin’s approach utilizing PLS-SEM instead of covariance-based structural equation modeling. In addition, rather than employing traditional PLS, this study used consistent PLS (PLSc) to assess our suggested model [ 61 , 66 ]. Smart-PLS 3 evaluates the metric model’s construct validity and tests the structural model’s parameters.

https://doi.org/10.1371/journal.pone.0264135.t004

3.4 Empirical results on the relationship between the construct items

To assess the suitability of the model, the normalized root means square residual is what we utilized (SRMR) [ 67 ], which was 0.041, an indication that the model is fit for the purpose and therefore credible, as it is less than the 0.08 parameter which should not be crossed [ 67 , 68 ]. We also reported R² values in Table 5 above. The R² value for the appropriate variable was used to evaluate each structural path; in general, the R² values were acceptable, so the research model’s explanatory power was all generally acceptable: since it falls within the required limit.

https://doi.org/10.1371/journal.pone.0264135.t005

This finding is an indication that a mutual relationship exists between all the constructs within the research. Consequently, Q² was higher than 0. The results of Q² are a confirmation of the endogenous constructs’ predictive validity. Again, the Q² value greater than 0 specifies that the model is predictive.

Results of hypotheses (H1, H2, H3, H4, H5, and H6).

We had three distinctive results from the proposed test of the relationship between models, with two supported and vice versa.

The study’s findings reveal a positive and meaningful connection between business records management policies. (H1. 1.B.R.M. Training -> 2.B.R.M. Policies: β = 0.460 t = 6.582 p <0.000). We also tried to investigate the relationship between business records management training and business records management. The result shows that there exists a significant relationship (H2. B.R.M. Training -> 3.B.R.Mgt: β = 0.481 t = 6.885 p = 0.000). The relationship between business records management training and business growth as predicted is not statistically significant (H3.1.B.R.M. Training -> 4.B.Growth: β = 0.129 t = 1.442 p = 0.149).

Also, H4 evaluated the relationship between business records management policies and business records management. The relationship also reveals that the assertion is supported (H4. 2.B.R.M. Policies -> 3.B.R.Mgt: β = 0.194 t = 2.950 p = 0.003).

There exists a negative relationship between business records management and business growth (H5. 2.B.R.M. Policies -> 4.B.Growth: β = 0.026 t = 0.368 p = 0.713).

Again, the assessment of H6 (Business records management and business growth) established that there is a positive relationship between the construct items: H6. 3.B.R.Mgt -> 4.B.Growth β = 0.326 t = 3.904 p = 0.000).

We conducted mediation analysis in Table 5 to show how the role played by independent variables on independent variables and also to know their effects without a mediator looking at their total effects (without) mediation. All were significant except (H2 β = 0.012 t = 0.367 p = 0.713) where training had no indirect effect on records management and business growth.

However, the indirect effects of H1, H3, H4 and H5 were significant (H1: β = 0.089t = 2.525 p = 0.012), (H3: β = 0.157 t = 3.452 p = 0.001), (H4): β = 0.029 t = 1.979 p = 0.048, (H5: β = 0.063 t = 2.251 p = 0.024).

After conducting the mediation analysis, we further conducted another test in Table 6 shows the total effect of construct items to understand the overall or total role played by all interdependent variables on the independent variable. The result clearly shows that all were significant except (H5 β = 0.089 t = 1.248 p = 0.212) where business records management policies had no total effect on business growth. However, the total effects of H1, H2, H3, H4 and H6 were significant (H1: β = 0.46 t = 6.582 p = 0), (H2: β = 0.57 t = 9.02 p = 0), (H3: β = 0.327 t = 4.7362 p = 0), (H4: β = 0.194 t = 2.95 p = 0.003), (H6: β = 0.326 t = 3.904 p = 0).

https://doi.org/10.1371/journal.pone.0264135.t006

4 Discussion of result

Before the study, we established six hypotheses, to investigate the relationship between business records management and business growth in the Ghanaian context for SMEs.

To better understand the importance and mutual relationships that exist between business records management and the business growth of small and medium enterprises (SMEs) we placed the conceptualized business records management and positioned it’s as a business tracking and management strategy, means of competitive advantage by setting business records management as a defensive mechanism. Means of checking business growth, decision-making, and business survival.

The survival and growth of small-scale businesses can be promoted through these particular research findings because records management is vital to business management [ 69 ], having recognized the potential contribution of the SME sector to the growth of the Ghanaian economy in a wider perspective [ 9 ] due to the importance of SMEs in terms of job creation, government revenue generation, and poverty alleviation [ 70 ]. Hence, SMEs cannot be overlooked and allowed to fail within a few years of operation Ezejiofor, Olise [ 12 ] as a result of poor records management practices and continuous denial of access to credit facilities to finance their businesses [ 71 ]. The findings of this study make a significant contribution to existing information on record keeping, management, and business expansion. H1, H3, H4, and H5 have indirect effects on business growth, according to the findings. The P-values in the hypothetical scenarios are statistically significant. The results demonstrate that efficient company records management will have a positive impact on business growth. Second, the hypotheses’ combined effect (H1, H2, H3, H4, and H6) is statistically significant. This indicates that records management training has a favourable impact on the long-term viability of the company.

The test statistics have revealed that the mediating effect of business records management training through business records policies does not affect business growth because their values were insignificant. A follow-up test conducted on the total effect of construct items (business records management policies and business growth) also proved to be statistically insignificant. This shows that government policies on records keeping are unsuccessful in either supporting or enforcing the keeping and managing of records and sees records management as a field of interest in a business management approach that will be of benefit to economic growth. This research is in support of United Nations Sustainable Development Goal 8. Hence, a young entrepreneur should see business records management as a resource [ 22 , 72 – 74 ]. We, therefore, support the idea that entities must adapt to the proper maintenance of records to effectively deliver their services.

Our findings generally bring to bear that SMEs regard business records management due to its effect on business growth. Entrepreneurs must see business records management training, business records management policies, and business records management as considerable indicators for business growth and SMEs’ success. The application of these research findings could be a means of business appraisal and business management strategy, placing business at a competitive advantage, a defensive mechanism tool, and a tool for business decision-making, tracking business, performance, and survival.

The above test represents established proof that business records management improves the long-term viability of a company. We then support the idea that proper records management of SMEs and its effect on business growth is facilitated by the level of business records management training received and internally designed policies to keep business records. Hence, it is a business management concept that should be fully practiced by all SMEs; since business management and entrepreneurial success can be assured through such management processes to ensure the business sustenance, expansion, and growth of SMEs into multi-national companies which can enjoy economic prosperity in the future.

In this research, we, therefore, accept hypotheses (H1, H2, H4, and H6) due to their positive impact on business growth. We however reject hypotheses (H3 and H5) because policies do not significantly affect business growth, unless they are mediated through business records management training, business records management policies, and business records management to realize the total effect on business growth in this case.

5 Managerial implications and conclusion

Ensuring proper business records management within SMEs will leverage or aid policymakers, government officials, business managers, and young entrepreneurs to marshal or identify a laid down procedure and a means of business appraisal, management strategy, tax/audit, legal compliance, competitive advantage, a defensive mechanism tool, and business decision-making, tracking business profit and loss, and as a means to further plan, control, and direct business resources to target customers in Ghana.

In a broader sense, the records continuum theory ensures that records should be created, and become information and that information should be accessible, authentic, and can be used as when needed therefore supporting since its significance has been established in business sustainability. Hence, business records management is an influential variable and a driving indicator for business sustainability, having assessed its theoretical importance, testing of hypotheses, and practice. According to the survey results, business records management training, setting business records management policies and proper records management positively affect business growth. This will help business actors such as the government and, business owners/managers to make a decision based on business information available to either innovate or come up with new business plans to suit the taste and preferences of the changing business environment. This research is a call for policy concern for formal and informal businesses (SMEs) to position it as a daily routine and practiced within business frontiers.

In conclusion, the availability of business records and management of these will eventually help government officials to know of specific businesses that pay and invade taxes, to establish reasons for business failures and further direct policies and actions towards economic success. Finally, in literature, other variables such as personnel, finance, and technology are necessary factors that need to be considered in the quest to ensure business records management and its impact on business growth.

5.1 Limitations and future research

Our variables or construct items of analysis had some shortcomings, such as the possibility of some research questions not being answered due to the coronavirus disease COVID-19 pandemic which poses restrictions on collecting data from some areas, time limitations, and financial constraints in meeting the transportation cost of data collection. However, the researcher tried everything possible to engage respondents to elicit responses for the study. The research established strong policy support for business records management as a prerequisite and requirement for ensuring business growth due to its statistically significant relationship with other explanatory variables. But more importantly, further research can be conducted in other parts of Ghana by combining other variables such as personnel, finance, and technology which were not included in our hypotheses, these can also be tested to ascertain their significance on business growth.

5.2 Innovation of the paper

The study aimed at advocating and echoing strong business records keeping and management policy on the plausibility of business growth as a means of marshaling or identifying means of tracking business progress, a means of business appraisal, a means to develop a further plan, control, and direct business resources based on available business records to further position the business at a competitive advantage over other businesses within the same business environment. Having established this concept, it will eventually serve as a defensive mechanism tool, path for business decision-making and a means to target customers or consumers in Ghana. This will help maximize productivity and reduce the failure of most businesses as a result of improper records management practices. Hence, our findings are in support of the concept of business record-keeping and management and encourage it’s being fully practiced. After carefully assessing its importance in the business domain and its economic benefit.

At present, no such specific work has been done in Ghana to the extent of developing a conceptual framework for its adoption. This propels our interest in this area of research to investigate and develop such a concept as a practical means to manage and bring innovations into business management. Since records management is a field of management science, it is an area that needs attention and policy formation by focusing on its impact on business growth.

Supporting information

https://doi.org/10.1371/journal.pone.0264135.s001

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Records Management

Records Management 101: Why Is It Important?

Now, more than ever, it’s critical for organizations to have an effective records management program in place.  As the creation of infinite amounts of information continues to increase and regulatory laws evolve, the need for records management becomes only more imperative.

While many companies are familiar with the concept of records management for paper records, many are still not addressing the management of huge volumes of electronic documents. Business leaders need to understand the importance of managing all types of files – including both physical and electronic – to stay compliant. Additionally, they need to understand how implementing a comprehensive RIM program can help their organization reach long-term goals.

What Is Records Management?

Records management ,  also known as records information management (RIM) , is the process of supervising and administering information created, received, maintained, stored and disposed of, regardless of format. Simply put, records management is the management of an organization’s information throughout its lifecycle. Companies must follow approved policies, records management procedures , and retention schedules when creating, maintaining and sharing information.

The RIM life-cycle accounts for the management of all paper and digital files, including personnel files, financial reports, emails, social media and more:

Why Is Records Management Important?

According to IBM, 90% of the world’s data  was created in two years alone. Without the regular monitoring of your information, the management of massive volumes of data becomes nearly impossible.

In addition to data overload, the ever-evolving regulatory environment is a reason why records management is imperative for companies. Unenforced records management procedures and retention policies can result in unnecessary audits, lost productivity, and hefty penalties for noncompliance.

A comprehensive RIM program manages the growth of information over multiple repositories, keeping you in compliance with data privacy regulations for information governance (IG) and e-discovery . The following are extended benefits of implementing a good records management plan in your office:

Benefits of Records Management for Businesses

1) reduces records volume and storage costs.

Did you know that only 5-10% of business records have any significant value? Imagine the number of files, reports, and emails that are produced by your organization on a daily basis. Out of all that information, only a portion of it may be useful or necessary to keep.

With the proper management of records, an organization controls the growth of records and retains only relevant data. A RIM system follows a mandated retention schedule, outlining how long records need to be kept and when disposition needs to occur. Paper documents that are legally required to be stored can be stored cost-effectively with the help of document storage companies . Files that are accessed daily can be scanned and stored in an electronic document management system, opening up office space that can be reallocated to other business functions.

2) Allows Effective Retrieval of Records

Information is only useful when it can be retrieved. RIM accounts for the quick retrieval of documents by indexing and organizing them—making them accessible and reducing employee search times.

By scanning documents into an advanced  document management system , information can be gained quickly and accurately from a cloud-based repository. Data can be shared and updated remotely, eliminating unnecessary duplicates. With accessible information at hand, your organization is enabled to make smarter, better business decisions.

3) Enables Regulatory Compliance

With records management laws t(including HIPAA, FACTA, and the HITECH Act), the need for a well-structured records management system in business is paramount. Enforcement for noncompliance can be severe, including subpoenas, legal actions, and costly penalties.

Whether you have a paper or electronic records management system, it’s essential to track records throughout their lifecycle as evidence of their existence. The tracking of records permits your staff to know when and how to apply retention rules, such as legal hold or destruction.

4) Enables Business Continuity

Ensuring the preservation of your company’s assets is a critical component of an effective RIM program. Information delivers value to each part of your organization, and, if permanently lost, your business could suffer drastically.

Adopting a records management policy keeps sensitive data protected in the event of an emergency or natural disaster. Electronic records and data backups that are essential to continuity can be stored in secure  media vaults , protecting them from internal or external threats.

5) Automates Workflow

Most companies don’t analyze the time employees spend on storing or searching for records. When documents are stored onsite and disorganized, you must constantly sift through them to locate relevant information. After retrieval, you must undergo an additional refiling process.

With a unified records management system, content is stored in a centralized repository. Records are classified and categorized, cutting down on retrieval times and accelerating your organization’s ability to conduct business.

A Customized RIM Program for Your Business

A RIM program requires a well-organized, consistent plan of action structured around your long-term goals. At Vital Records Control (VRC), we aren’t only a document storage provider; we’re your partner to manage all your information assets throughout their entire lifecycle. Our team meets with you to understand your long-term objectives, customizing a RIM strategy that’s suited for you. Get in touch with us to learn more.

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Privacy Overview

7 Benefits of Record Keeping for Business

While there are many benefits to record keeping for business, especially in the long run. Creating and maintaining business records is essential to help analyze a business’s profitability, performance, maintain positive customer relationships and more.

What is Record Keeping?

Record Keeping is a framework by which the records of an organization are created and managed in a way that supports a business. Records are the source documents, both physical and electronic, that specify transaction dates and amounts, legal agreements, client, customer and business details.

Also Read:  7 Financial Best Practices to Starting your own Business

First and foremost, you need to begin by recording your business activities to avail the benefit of record keeping for business.  Developing a system to log, store and dispose of records can benefit your business by allowing you to manage better.

Increase The Quality of Business Management

Record Keeping for business in organization shall maintain records in a manner that ensures timely, efficient, and accurate retrieval of needed information. It can be used in tracking and managing stock, work in progress, customer’s orders, jobs or other details management requires to make quality decisions.

Analyze Business Performance

Analyzing records help you see your business’s performance and financial health. You can measure your company’s profitability & performance over time by looking at patterns in your records. You must analyze and track records to help make decisions, and see if you have enough capital to cover your expenses. Forecasts can be made from the record keeping data to predict the supply and demand gap to plan accordingly in advance to boost performance.

Beware of Fraud & Accidents

Record Keeping helps you verify that your business does not have any false accounts or fraud claims of debt. It is easy to even double check accounts to avoid any calculation errors, frauds, embezzlement or theft. It is after all your business and the live hoods of all other employees are at threat if a business goes bankrupt.

Also Read:  How to Survive a Natural Disaster as A Business?

Record Keeping of inspection reports for quality of product, maintenance of machinery, etc., can bring accountability in measuring safety. Which has the ability to prevent accidents due to negligence of maintenance. Generally, record keeping in business helps you beware of frauds and accidents.

Happy Customers

Record keeping on details of complaints about products, service, staff or anything else, and steps taken to resolve them can be used to provide better customer service. Keeping in mind the privacy , recording personal details, products purchased and product enquiries are useful in finding new customers and improve customer satisfaction by providing customized solutions.

Better Financial Accounting

Good accounts are the basis of a good business. If you don’t have an accurate grasp of your financial situation, your plans will be based on little more than guesswork. Investors or lenders will also want to see well-organized finances before they commit to funding your business. Businesses should keep detailed records of income and expenses to measure loss or profitability and cut down on unnecessary expenses. It also helps you do your taxes with ease.

Improve Legal Compliance

Depending on your type of business structure, you have different legal documents. For example, if you own an incorporated company, you should keep track of your articles of incorporation. Usually, a partnership has a partnership agreement. Sole proprietors and LLCs also have legal documents. Keep legal documents in your business records as proof that you own your company.

Also Read:  7 Numbers that Warn Your Going Out of Business

Your location and industry may require you to have a permit or license. Keep up-to-date records of all your permits and licenses. You need documentation of permits and licenses to show you follow regulations.

Managing Employees

Record Keeping gives you data with which to set your employees’ pay and benefits packages and make sure they’re still competitive. From losing track of people’s vacation days to failing to account the right amount of overtime, remuneration or other benefits makes your employees very unhappy. As an employer, you have a responsibility to keep certain records about your employees, such as contracts, pay details, performance reviews, and so on.

Do you know any other Benefits of Record Keeping for Business? Comment them on Trdinoo for others to learn. Please subscribe and share us with your friends and networks.

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The importance of keeping accurate financial records for your company.

As a business owner, keeping track of your company’s finances is vital to its success. Accurate financial records not only help you monitor the health of your business but also enable you to make informed decisions and comply with legal requirements. In this blog post , we’ll discuss the importance of keeping accurate financial records for your company, including the types of records you should keep and how long to keep them. We’ll also cover how proper record-keeping can benefit your company and offer tips on maintaining accurate financial records using software tools. So let’s dive in!

The types of financial records you should keep

When it comes to keeping accurate financial records for your company, there are several types of documents that you should maintain. These include:

1. Invoices and receipts – You should keep copies of all invoices and receipts related to business expenses , including those incurred by employees.

2. Bank statements – It’s important to keep track of all bank transactions, including deposits, withdrawals, transfers, and fees.

3. Business tax returns – Make sure to retain copies of your business tax returns for at least seven years in case they’re requested by the IRS.

4. Payroll records – Keep track of employee pay stubs, W-2 forms, and other payroll-related documents for at least three years.

5. Contracts and agreements – All contracts with clients or vendors should be kept on file in case any disputes arise.

6. Financial statements – Income statements, balance sheets, cash flow statements provide a clear picture of your company’s financial health over time.

Maintaining these financial records not only helps you stay organized but also enables you to identify areas where costs could be reduced or revenue increased through better decision-making processes based on sound data analysis techniques.

How long you should keep financial records

Proper financial record-keeping is not a one-time task. Keeping accurate financial records is an ongoing process that can come in handy when you need to make informed business decisions or during audits. But, how long should you keep the financial records of your company ?

The answer depends on the type of document and the regulations in your state. Generally, it’s recommended that you keep important documents such as tax returns, income statements , balance sheets, and bank statements for at least seven years.

On the other hand, it may be wise to retain contracts with suppliers or customers indefinitely as they could be useful if there are any disputes in the future. If your company deals with hazardous materials or has employee-related documentation such as injury reports and payroll information then these should be kept much longer – even up to 30 years in some cases.

In summary, always check local laws regarding record-keeping requirements but generally ensure that all documents which may have legal implications like taxes are kept for at least 7 years while others like employment related-documentation can be stored indefinitely depending on their relevance and potential use cases.

The benefits of keeping accurate financial records

Keeping accurate financial records is not only a legal obligation but also an important aspect of running a successful business. Accurate financial records provide crucial information about the company’s financial health , which can help in making informed decisions.

One of the primary benefits of keeping accurate financial records is that it helps to identify potential issues early on. By monitoring your finances regularly, you can quickly spot any discrepancies or irregularities and take corrective action before it becomes a problem.

Accurate financial records are also useful when applying for loans or seeking investors. Lenders and investors want to see that your business has solid financial footing, which means having well-organized and accurate financial statements .

Moreover, clear and concise record-keeping allows businesses to easily track expenses and income streams. This enables owners to make adjustments where necessary while ensuring sufficient cash flow throughout the year.

In addition, maintaining up-to-date accounting records makes tax filing much easier by providing all required details about revenue generated and expenses incurred during the year so that taxes can be filed accurately without any errors.

Keeping accurate financial records provides numerous benefits for companies of all sizes including better decision-making capabilities and improved relationships with lenders/investors while ensuring smooth operations through effective expense tracking mechanisms.

How to keep accurate financial records

Keeping accurate financial records is critical for the success of any business. To ensure that your company’s finances are in order, there are several steps you can take to maintain organized and precise records.

Firstly, it is essential to invest in a reliable accounting system that will help keep track of all financial transactions. This software should be able to generate financial statements such as balance sheets and income statements accurately.

Secondly, it is important to document every transaction by keeping receipts and invoices for purchases and sales . These documents provide evidence of expenses incurred or revenues earned , which may be necessary during audits or tax filings.

Thirdly, reconciliation of bank accounts should be done regularly to confirm that all transactions have been recorded correctly. It will also highlight any discrepancies between what has been recorded versus what was deposited or withdrawn.

Always backup your data regularly either on cloud storage or external hard drives just in case something goes wrong with the primary source.

These steps can help you maintain an accurate recordkeeping process for your business while reducing errors and ensuring compliance with legal requirements.

Financial record-keeping software

In today’s digital age, there are several financial record-keeping software options available for businesses of all sizes. These software tools are designed to help companies streamline their accounting processes and maintain accurate records.

One popular option is QuickBooks, which allows users to track expenses, create invoices, and generate financial reports . Another software tool is Xero, which offers similar features along with the ability to integrate with other business applications .

When choosing a financial record-keeping software , it’s important to consider factors such as cost, ease of use, and compatibility with your existing systems. Some software tools may also offer additional features like payroll processing or inventory management .

Investing in a reliable financial record-keeping software can save time and money by reducing errors and ensuring compliance with tax laws. It can also provide valuable insights into your company’s finances that can inform strategic decision-making.

Keeping accurate financial records is essential for the success of any business , regardless of its size or industry. By maintaining proper financial records, companies can make informed decisions about their finances and avoid costly mistakes.

In this article, we have discussed the types of financial records that businesses should keep, how long they should keep them, and the benefits of keeping accurate financial records. We have also explored some tips on how to maintain accurate financial records and recommended some software that can assist in record-keeping.

Remember that procurement departments are vital in ensuring that your company’s finances remain intact. Accurate recording helps ensure you stay within budgets while still paying suppliers properly for goods/services delivered. Your company’s bottom line will thank you if you take time to prioritize keeping an up-to-date record with a clear system so employees who need access always know where to find what they’re looking for.

By implementing these practices into your daily operations, you can help your business grow and thrive financially!

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Importance of Personnel Records

Introduction.

• Purpose of the report

Personnel Record System Benefits

Personnel records system effectiveness, conclusions, recommendations.

Personnel records are the documents that are used to show the history of an employee from the day he or she began to work with the employer to the time he or she retired or terminated employment. They are either organized as personal files in hard copy or electronic formats. They include such details as the day of appointment, memorandum, correspondence, job advertisements, resumes, application letters, reference letters, appointment letters and acceptance letters. The records also have various information like leaves, immigration, position, salary and salary changes, awards, contracts and relief and release times (Abrams, 1997).

This report will highlight the importance of the personnel record to various parties in any organization. The report will highlight the importance of the records to the employer and how he can keep good records for his own benefit. It will also highlight the importance of the records to the employee and why he should thrive to ensure that purely positive accounts are in the personnel records that highlights his or her dedication to the employment and the various successes that have been accounted in the records.

The report will also highlight the importance of keeping personnel records and why organizations should endeavor to keep the records of their personnel. The report will also show why when the personnel come to retirement or terminate the employment his or her records should be stored rather than being discarded or destroyed. This is because they might be very useful in the future on various occasions (Isaacs, 2003).

Purpose of the Report

The purpose of this report is to show the importance of the personnel files. The report will show why personnel files should be stored and their importance to both the employer and the employee. The report will also show why your company will benefit from keeping personnel files and how it will ensure effectiveness in your human resource department. The report will also show how the personnel records will enhance the performance of the staff in all departments as well as the human resource department (Whittaker, 1996).

All organizations need to implement policies and come up with new policies and formulations so as to keep up with the ever increasing competition in the market. They also need to keep up a good rapport with their publics, these being their clients and suppliers and other parties that are concerned with their trade. In order for the organization to achieve these objectives, planning is an essential part and plays a very crucial role. Plans depend entirely on the organization’s information and the personnel planning also are very helpful for organizations. Personnel planning depends entirely on the information the organization has on its personnel and this information should be accurate so as to enable an organization to recruit and develop a staff that is full of potential and a very effective personnel. This contributes very much to the organization’s realization of its objectives and targets (Blandford, 2001).

Good records help organization’s managers to make sound decisions which are based on facts and not estimations or guesswork. They help in enlightening the managers of the personnel resources at hand and availability so as to meet the organization’s demands in the production and delivery of services and products as to the requirements. They also help the organization’s managers in precisely assessing the levels of performance of the personnel and their productivity levels. They also help the managers to identify the proceedings and absence levels, sickness, lateness, labor turnover, accidents, disciplines and other forms of issues that prevent the personnel from performing their day to day tasks. This will also help the managers to take the appropriate action so as to enforce the performance of the organization’s personnel (Soper, 1976).

Personnel records are very important because they give the management all the information and help in formulation and implementation of policies concerning employment. They also help the management and the human resource department in creating good guidelines for the hiring and recruiting of new personnel. Personnel records will also help the management in making crucial decisions concerning firing and dismissal of various employees who are not realizing their targets. The records also help on future hiring of personnel on grounds of sex, age, race and disability because the personnel records will give a clear factual about the kind of workers that perform highly in the organization (Carroll, 1987).

Accurate records also help in ensuring that workers get the collect pay and all other benefits that are qualified by them. This means that the welfare of the workers will be highly focused and this means that the personnel will be satisfied with the organization’s way of doing things. The company will also keep a good record as to which employees should be rewarded with various forms like pay increases and promotion. This information will be taken from the personnel records (Rodden, 2003).

Personnel records also contribute very much towards national statistics about employment and this information will only be taken from the personnel records. Such statistics show labor turnover, earnings, overtime and other statistics. This helps other entities like trade unions, employer’s association, and independent organizations among other to formulate and implement their own policies (Isaacs, 2003).

The information that is stored in the organization’s personnel records system includes very important information that could be used in many occasions that may arise. One of the information that it contains is the personal details of all the employees. This information is necessary for the security of the company so that it can also find their employees through various means in case of fraud. The systems also contain other information which includes work details. In this part, the system contains details of the work patterns of the employee, work contacts and photographs. These are very helpful for the company because it can also have the information about the employees who are performing and those who are not performing (Dix, 2002).

The system also have the personnel’ job and salary details. This means that the system can access information about the working records of the personnel and also the salary records of the personnel. The system also has specific details of the personnel job detail and where he or she is working and at which department, branch et cetera. The hours that the personnel are supposed to work are also contained in the system and hence when the personnel need to be called in by the management it is easy to locate him or her. The system also contains such information about the emergency contacts of the personnel in case anything happens. This is very helpful because employee’s can have their emergencies handled by their families who will be called in by the organization’s administration (Whittaker, 1996).

The system also keeps such records as the employees’ absences and time keeping defaulting. This means that the most efficient employees are recorded and the less efficient ones are also known. This helps the management in reprimanding the people who do not keep their time or those who are habitual absentees. The system also keeps such records as the holiday entitlements for the personnel and hence the people who deserve a holiday are never denied. This also applies to other benefits as well which include retirement, health, disability and other benefits that are entitled to the personnel (Soper, 1976).

The system also keeps the contract information and so the management will be well updated if any contract is ending. The system will also give the management an idea if the personnel has been performing and hence if it is necessary for the contract to be renewed. This means that the management is updated on all the employees’ contracts and information about the people who are supposed to retire or those who are supposed to have their contracts renewed is also available to the management by the system. The record system also shows the various developments that the personnel have gone through since the appointment day. This helps in determining the various training the employees have gone through and how they are trained to optimize their productivity (Dix, 2002).

The personnel records system also contains the bank details of all the employees hence easing the mode of payment for the employees. This is both beneficial to the management and the employees because while the management will not have problems of the various payments methods, the employees will have easy access to their money (Rodden, 2003).

An effective personnel record system is very beneficial for both the management because it offers a good tracking of the personnel and also helps the human resource in determining which type of employees are best suited for the company. One of the importances of keeping personnel records is that they help the management in analysing what type of employee are best fit their companies. This is because the records will show what type of employees optimizes in the organization and how they can help the organization in achieving its objectives. Although it may seem as if the organization is victimizing some people, it is also true that certain people cannot perform as well as other. In this respect the management will do a demographic analysis which will help in determining which type of sex is better as employees, age and various other issues (Isaacs, 2003).

It will also help the management to plan well in terms of the benefits of the employees. This is because the records keep track of all the employees’ benefits and which employees qualify for some benefits and which. This will also help the management in ensuring that every employee gets his or her holiday, vacation or leave when it is due and that nobody is denied off their benefits. It will also help the management in analysing how many employees benefit with paid absences which are attributed to vacations, holiday and leaves. This helps in providing a well motivated personnel and this plays a very important role in the enhancement of the organization’s overall performance.

The records also play a very important role in the management decisions of firing and resigning some personnel. This is because the records show the personnel ability to cope with the ever increasing demands of the organization. A good example is where the organization keeps records of the personnel ability to meet targets and beat deadlines. It is also important for the personnel to keep record of the personnel that does not keep time and are often absent from the job. This means that when the company finds a certain employee is not good at keeping time, beating deadlines and meeting targets it will make a sound judgement on whether to lay off the employee or reprimand him or her (Whittaker, 1996).

The records also help very much when it comes to emergencies. Some employees may have accidents or have conditions that may require specialized medication or the help of a family member. The records have emergency contacts of the various employees in the organization and hence there is no need for the organization’s administration to go looking for the employees’ families or relations. This has helped in many instances when employees have had various conditions in the office and they have needed the assistance from their doctors or family members. This means that the organization will not be jeopardized by these scenarios (Carroll, 1987).

The information about the employees contracts are contained in the records. This helps the organization in determining which employee’s contract will be terminated, renewed or restored. The records about the performance of the individual employee will help in determining these facts. Organizations which do not have these records are sometimes faced with dilemmas when they have to lay off some of the employees. In order to evade such a scenario or avoid lying off some of the most productive personnel, it is important for the organization to keep the records so that they can refer to them when the necessity arises (Rodden, 2003).

For a company to be able to make policies that work and implement them it needs to keep a good record of their personnel. This will assist the companies in determining the companies’ weak points and also how they can handle it.

The companies also need to be updating their records from time to time so that anything new can be catered for by the best personnel. This will also help in the formulation and implementation of new policies for the organization (Dix, 2002).

The personnel records should be kept as confidential as possible. This implies that only the personnel and the management can access the information that is held within the records. Failure to this would jeopardize the privacy of the personnel (Isaacs, 2003).

The organization should invest a substantial amount of its resources in its record keeping so that they can have the best personnel record systems. This ensures that there records are well updated and that they are easy to access.

The Organization should also invest in the most modern means of record storage and retrieval systems. This ensures that their record systems are efficient and easily accessible. In the same respect the organization should ensure that their systems are secure and that they cannot be accessed without authorization (Whittaker, 1996).

The organization should also ensure that their systems can adapt to new changes with little jeopardy as possible. This means that the system should be able to adapt to new changes without affecting the normal running of the organization.

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Carroll, J. M. and Rosson, M. B. (1987). Paradox of the active user. In Interfacing thought: cognitive aspects of human-computer interaction, pages 80–111. MIT Press.

Dix, A. (2002). The ultimate interface and the sums of life? Interfaces, 50:16. 25.

Isaacs, E., Walendowski, A., Whittaker, S., Schiano, D. J., and Kamm, C. (2002). The character, functions, and styles of instant messaging in the workplace. In Proceedings of the 2002 ACM conference on Computer supported cooperative work, pages 11–20. ACM Press. 24.

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By Navisteps

Published January 29, 2021

7 reasons reason nice rekord keeping is vital with startups and SMEs

Record keeping is a process ensure most your cannot ignore - be itp in the private or audience industry . But what is record keeping and why is it key?

What are Record Keeping

Record keeping can the process of records minutes and events in an accounting system . Since who principles of accounting rely on accurate and thorough records, plot keeping is one of the basic foundations of accounting.

Importance of Record Keeping

So conundrum is recording keeping important and why shouldn EGO grooming about it as a business owner? 

1. Prevents deception or theft

Own a fraud prevention process by keeping detailed records starting thine business expenses or transactions is essential for your company - be it as a run, small and medium enterprise (SME) or large undertaking. Having an overview on your business cash flowing can allow you to understanding how much funds is next includes and out of your store additionally produce an accurate financial order for accounting or auditing purposes. Businesses operating inches a fast-paced and dynamic environ, the task concerning storage records can falls secondary to commonplace business operations. However, failing at efficiently keep up-to-date and comprehensive records can hurt your business’s long term operations. Probably the most important purpose behind sound record-keeping the the it allows you on learning furthermore grow of your…

2. Pay your taxes

With documentation and sound list keeping practices, you can pay your abgaben accurately, on zeiten, and save on penalties!

In Singapore, if ampere tax payment is not received before the due date, a 5% late payment fine will be imposed. Additional penalties von 1% per month may been imposed if the fax remains unpaid 60 days after the imposition of the 5% penalty. The 1% additional penalties will must imposed for each completed month that aforementioned tax remains unpaid, up to one maximum of 12% of the unpaid tax.

As a startup alternatively SME general owner, ever dollar accounts and it is important to stay prudent to such financial matters.

3. Match includes laws

Good record-keeping practices are significant because it helps companies comply with various laws in various countries. Company should establish good accounting and issue management systems up drive go rekord keeping practices and retrieve alternatively file records easily.

Increasingly, accounting and spending verwalten systems have linked other integrated in each other to ensure seaming data synchronization and provide accounting-friendly solutions this are affordable and user-friendly for startups additionally SMEs. 

4. Manage own cash flow

Cash is roy while itp comes to the financial management of a growing company. Because evidently portrayed through COVID-19, maintaining a healthy bar flow that can maintaining against pandemics and other unforeseen circumstances lives very important for you want your group to survive in the long start.

That is where record keeping arrives in. It helps you to identify and understand where your dollars are coming in and driving out for and have the correct projection of the health of your company’s finances. 

5. Create business decisions

Every dollar within a startup and SME is very precious and should be well-spent. Understanding find your dollars are coming from and headpiece to is crucial in helping you better understand and make data-driven business making. Why is Records Management Important? [Top 8 Benefits]

Expense management software can one numeral cloud solution ensure can help you breakdown your business total furthermore retrieve insights on your business disbursement. As ampere startup or SME property, you would wants to save as great time and money as possible and focus on other important business tasks to disk financial and achieving.

6. Save time and costs 

When you need till file reports and conduct finance price out closing, a good record keeping system- can allow you to save time additionally money more you do not have to panic and go through a last-minute rush to meet deadlines or hiring someone last minute to handle it. Record keeping is how you log, store and dispose of critical financial information for your business. Records are: source documents, both ...

Digitising your documents can lessen the hassle and ensure you stay compliant using regulations press deadlines. By putting your documents and records online , you can increase operational efficiency, reduce shipping and storage costs, search records faster and easily access records of multiple digital devices. 

Otherwise, you can also consider hiring a enterprise secretary . It is possible for startups both SMEs to do so in there are affordable corporate secretary our available in that market that can been less expensive than how an additional headcount! 

7. Prevented loopholes and oversight

Record keeping can help to justify and explains why the company management crafted secure decisions. Cashier flow problems are also found to be one von the leading causes of failure fork businesses and having consolidation records will enable businesses to make better decisions. With respective business survival with stake, the potential of having loopholes and supervision could be disabled over employment owners and preventive should be taken. 

Record Keeping Requirements

Different countries has varying regulation depending on the local actual stipulated by the government. It is crucial for you to doing substantive research and ensure that your company’s current record keeps system is compliant with the country regulatable requirements.  Get is the weight and benefits regarding keeping business records?​ - 10189638

Includes Singapore, the Inland Billing Authority the Republik (IRAS) has stated a set regarding requirements on the proper records that companies must maintain and total which companies shouldn retain their records about its website . Specified credentials are also required by levy deductions and tax record purposes.

Ways up Take Good Record Keeping

Now ensure we have understood the importance of record keeping, how can startups and SMEs instil a smooth and compliant record preservation system?

1. Organizes your records 

Records shoud must well-organised and segmented press clear manual should be presented such such employees can a clear idea turn how they can input company records. For example, expenses can be labelled upon subscription so that the total expenses across the entire company pot become deferred press filed into custom categories. 

2. Producing a digitalised netz

Digitalisation is somewhat that should be familiarity till most as talks of Industry 4.0 (the date of personal and automation and enhance it with smart and autonomous scheme fueled by data and engine learning) had begun as 2015 and we take since mobile towards Industry 5.0 (where humanity will work alongside robots and machines) since 2018.

With aforementioned rapid advancement in technology and systems, much companies out go are bid new ways to move traditional processes to digitalised online systems in which it includes expense management . 

Easy go online, search and compare for what you need, and you can start digitalising your processes almost immediately!

3. Outsource which work

Startups and SMEs have a small headcount and the exits staff may not have the knowledge, expertise or capacity to perform record preservation jobs timely and accurately. Outsource will a good procedure to get work do professionally and at an affordable cost.

Focusing on what you are good at press outsource the rest. Not good at accounting and record keeping? Get any to do it instead. Use your time and energy wisely by concentrating on corporate business that can how you drive productivity and profitability better. 

Not use issuing hours trying to figure out how to process is records when you can easily hire someone to doing it professionals to ampere fraction of the selling. 12 reasons why keeping good records benefits is trade - OZKAN Auditors

Start Having Good Record Keeping Practices

Buy that ourselves have gone through the importance of record keeping and provided thee with recommendations on how to do thus, ourselves hope that you bequeath remember to stay vigilant and ensure is the records are properly maintained or retained! 

If to are a startup or SME owner and have any tips and advice on like companies can maintain good record keeping, let us know and we will update to article apply. Let’s grow real build adenine holism business ecosystem together.

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