Records management is a crucial component of every business. From employee files and time cards to contracts and insurance forms, there's a lot to keep track of. However, records management isn't just something you should do; in many cases, it's something you must do.
Legal requirements apply to many kinds of records, making it imperative for you to keep the best records you can. Here are three ways that records management legislation impacts your business.
Contract Law
Contracts exist for almost every business type, from schools to government to small businesses. When you create a contract, you are creating a legal document, and as soon as two parties enter into an official agreement, contract law applies. There are many facets of contract law that govern business relationships. Contract law helps to decide who was in the right and who was in the wrong if a dispute arises, and if you're on the wrong side of that decision it could cost you dearly. Keeping accurate and thorough records can help you obtain the best results possible should you ever find yourself caught in the crosshairs. Check contract law and records management legislation for your area, as certain states and counties have certain rules for how records need to be kept.
Insurance Coverage
If you have employees, even if you only have one, you're required by law to carry workers compensation insurance. Additionally, you're typically required to have a BOP, or business owner's policy, which helps protect you in the event that a customer or visitor to your establishment is injured. Another type of insurance you might have is E&O, or errors and omissions, which covers you in the event that you missed something when creating a contract. These insurance types, as well as property and casualty insurance for the physical items in your business, are critical to the protection of yourself and your business. However, records management legislation also applies to insurance since you'll be required to keep accurate records on injuries, complaints, visitors, damage to your property, maintenance, and other details.
Employee Record Management
You'll have to keep accurate records of employees, their information, their performance, time off requests, time cards, and more. If you run into the unfortunate situation of having to fire an employee or lay off employees, you'll need to have accurate records to facilitate the process. You'll also need to have accurate records of employee misconduct, or, on the other hand, significant achievements. Additionally, records management legislation typically requires you to keep tabs on your employees' use of insurance benefits, their retirement account, Social Security information, and other types of relevant information. Not keeping these records up to date can cost you if you run into an issue with an employee or if you're the subject of an audit.
As you can see, it may take some time to keep accurate records, but the time spent to ensure you're keeping the appropriate records can save you legal fees and even your business later on. Everything you do in regards to your business should be well-documented. Keeping manual files is a legitimate system of record-keeping and is one that some business owners prefer. However, electronic records keeping can help you keep more extensive and accurate records, and they're easier to access if you need them in a pinch. Always make sure you're doing what needs to be done so you stay on the right side of records management legislation, and keep up to date with your legal team so you're always in compliance with current laws.
