In accounting, there are often questions about the differences between document management and records management.
- How are these processes the same?
- In what ways are they unique?
- What do you really need to know about these processes to manage them effectively?
Below we will share what each of these terms means and the key differences between document and records management that we think you should know about.
What Does Document Management Mean?
Document management, also known as a document management system (or DMS for short), allows companies to store, manage, and track electronic documents and digital images of paper documents using computers and software.
Every business has processes they use to track, manage and store documents. It’s important to create an easy way to find and retrieve important documents that makes sense for your business workflow. This could be a combination of physical paper documents stored in a file cabinet or digital files stored locally or in the cloud. Having a good document management system can improve workflow and efficiency.
A traditional document management system does pose some limitations. A paper filing system or in-house network leaves sensitive data vulnerable to a data breach. They also aren’t easily accessible. With teams going remote in 2020, it’s important your team has access to the documents they need without having to track down a paper copy.
Paper storage systems require a lot of time and effort to maintain. Plus, it greatly limits the ability to share files and information.
You also run the risk of mother nature. A flood in your building can mean the loss of the most crucial documents your business stores and without a digital copy, you could be in trouble.
What Does Records Management Mean?
Important records need established procedures for organizing and filing as well. Records management is a means for systematically controlling the storage and retention of business records. Safeguarding these records is critical for the organization.
In our experience, we have seen common issues with an outdated records management system. It can be difficult to track and locate files. Paper records make it difficult to compile actionable reports. Being able to track files that are checked out is challenging and can result in lost records.
What Is The Difference Between Document and Records Management?
A document and a record must be treated differently to maintain compliance with legal retention requirements.
A record is a “proof of existence”. The biggest concern with records management is legal compliance. Records can be paper or digital documents. They are not editable. Types of business records include accounting records, bank statements, legal documents, permits and licenses, and insurance documents.
Other types of business records include:
- Proof of Income Received
- Documentation for Expenses
- Prior Tax Returns
- Employment Tax Forms
- Documentation for Assets
- Records for Purchases Made
On the other hand, a document is a content file. It can be edited and updated as needed. It can be paper or digital.
Key types of business documents include:
- Company bylaws
- Meeting minutes
- The operating agreement for LLCs
- Non-disclosure agreements
- Employment agreements
- Business plan
- Memorandum of understanding
- Online terms of use
While management of documents and records is important, they have requirements and regulations for being organized, stored, and handled in different ways to be compliant with the laws in your area and industry.
What the healthcare industry is required to do to store records and documents properly is different for someone in the manufacturing industry. How your business handles your document and records management will differ based on not only your industry and locale but the information you store and how your business operates day-to-day. Do you need to store some of this information only to be reviewed yearly or is it information you need on a daily basis? How often you use a document and record will change the process by which you store it.
Find Out More About How We Can Optimize your Document Processes
As a leading document solution provider conversion companies in the world, ACI will eliminate the hassle of manually managing documents and records by implementing digital solutions to meet your document management requirements. You will never need to worry about lost documents or about the security of sensitive information again. Your team can securely access the information they need from anywhere quickly and easily.
Connect with one of our document management specialists today to find the solution that’s right for you. Call Ash Conversions at 1-800-719-9621 or contact us by clicking the button below.
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