Document and record keeping – necessary evil or valuable business tool?

Record keeping is dull, or is it? Ask most business leaders about the skills they need to succeed and its unlikely they’ll say record keeping. But accurate documentation and record keeping is essential to run a successful business. It increases business efficiency and guards against legal and regulatory issues. Ensuring records are kept accurately and securely will protect your business and help it thrive – and it may even prove to be more valuable than you think.

The Importance of Accurate Record Keeping

Keeping accurate records enhances administrative operations and can boost productivity. Being able to quickly and easily retrieve information about your clients, products and services, past transactions and business trends, enables you to provide clients with excellent service. It avoids the need to repeat similar work and empowers you to spot emerging opportunities.

Ensuring Compliance with Legal and Regulatory Requirements 

It is also essential to ensure compliance with legal and regulatory requirements. Most regulators require firms to keep accurate records as a condition of trading. For example, under FCA rule 9.1 regulated firms must keep records of their businesses and internal organisations, services and transactions. This enables the regulator to monitor firms’ compliance and ensure they meet their obligations to clients. Failure to comply could lead to an investigation, fine or worse.

Legal Obligations for Financial Records and Anti-Money Laundering

It is a legal requirement to keep accurate financial records if you are running a limited company or partnership. What’s more, under money laundering regulations businesses must be able to prove they have carefully checked the provenance of any money received from clients.

Professional Indemnity and Record Keeping 

Professional Indemnity insurers will expect you to keep effective records of your dealings with clients. This enables them to defend against possible future claims. Imagine a client spuriously alleges negligence by your firm, but you don’t hold accurate records to prove they’re wrong? Being able to find accurate and contemporaneous notes will put you in a far better position to defend against possible claims.

Essential Records to Keep 

So, what records should you keep? Clearly all financial data needs to be carefully recorded. In addition, keep details of meeting and attendance notes, recommendations and advice given, plans, drawings, product details and specifications.

Using Templates and Standard Forms  

It is often helpful to use templates and standard forms to record client information. This will ensure consistency and make it easier to retrieve information. It can also provide a valuable record of developments and trends in the market which will help to plan your future business strategy.

Learning and Auditing from Your Records  

Records can serve as a training resource and help businesses learn from past mistakes. Regularly auditing record-keeping practices ensures that consistent standards are maintained.

Efficient Record Retrieval  

Records are only useful if they can be easily retrieved. Rather than relying on paper-based systems, use digital tools to streamline record organisation.

Determining How Long to Keep Data

Deciding how long to keep data depends on your business and market. Limitation periods vary from six years to up to 30 years for defective buildings. Generally, keeping records for at least six years is advisable.

GDPR Compliance and Personal Data Retention 

When holding personal data, consider GDPR guidelines. You cannot hold personal data longer than necessary. However, in the case of a contractual relationship, retention should align with your data policies.

Ensuring Security and Backup 

Records must be securely stored and fully backed up. Regularly reviewing security policies helps prevent data breaches and loss.

Accurate record keeping is essential for both compliance and operational success. If you’d like further guidance on how record-keeping impacts your firm, please contact our team.