The Benefits of Implementing a Records Management System for Small Businesses

As a small business owner, you may think that records management doesn’t require much attention. Well, it is not the case as records management is a critical part of running any business. Without it, your business is at risk of operational inefficiencies, poor decision-making, and legal action. This article discusses the importance of records management system for small businesses.

Why Small Businesses Must Management Records Efficiently

There are several reasons such as:

1. Improve Reputation

In the business world, reputation is everything. If your business develops a reputation as someone who fails to protect customer or other organisational data, you will start losing customers. After all, would you go to a seller who has a reputation of selling poor-quality products?

The same reasoning applies to your business. If you wish to retain and take on customers, develop a good reputation by having good records management practices. Remember, your business may recover from a financial loss but recovering from reputational loss is quite difficult.

2. Customer Trust

Businesses invest in different strategies to improve customer trust. After all, there is a positive correlation between customer trust and sales. However, what businesses fail to understand there are much more simpler ways to win over your target market’s trust. For instance,

3. Intellectual Property

Another reason to have a robust records management system is to protect your intellectual property. Without a robust system, you cannot secure your intellectual property. It may be that you end up losing information that is critical to your organisation’s long-term success.

There is a possibility your intellectual property may fall into the wrong hands, including your competitors. They can use it to harm your business interests. Poor records may also prevent you from making use of your intellectual property as you may not know it exists. In some cases, the intellectual property may have expired as you failed to update the filings with the relevant authorities.

Furthermore, if an organisation does not have adequate records, it can face challenges in enforcing its intellectual property rights. For instance, how can a business claim that another is infringing upon its intellectual property rights when it cannot prove its ownership through records.

4. Compliance

Another benefit of an effective records management system is compliance with regulatory and other requirements. Nowadays, almost every business must report it complies with the set standards. Without it, a business is liable to regulatory action and lawsuits from other stakeholders. So, only by implementing a proper records management system, you can save yourself from regulatory action and other lawsuits.

5. Better Decision Making

What’s the best way to make a decision? Everyone agrees the best way to make a decision is by considering all the available data. Now, what if you don’t have access to the data due to poor records management. In such a situation, it is quite likely you will end up making a poor decision.

For a small business, such a decision can lead to business failure. For example, you need to forecast how many products you need to order for the upcoming season. Due to some reason, you don’t have the records for the sales in prior seasons. So, you decide to base your decision on whim.

Unfortunately, you end up with too much inventory. As there is a cost of holding inventory and inventory itself costs money, you don’t have enough cash to continue operations. Without enough cash, you may very well have to borrow money or close your business for good. It is why businesses must always base their decision after considering all the data.

6. Better Employee Productivity

Lastly, a records management system can improve employee productivity. How? Well, instead of thinking where to file a record, they must only follow the set process. It brings certainty to their job role and enables them to focus on their job description with full attention. Otherwise, they would keep wasting time on how and where to file a record which is not a value-addition nor rewarding tasks.

Moreover, employees don’t need to waste time retrieving data when they require it. For instance, if a customer wants to cancel their subscription, the employee can simply look up the information in the computer database or storage cabinet. Suppose the records are not stored properly. In such as case, the employee would waste valuable time on finding the record and responding to the customer.

So, if you want your employees to add value to your business by putting in the right effort, you need to have a robust records management system. They won’t have to waste time and can focus on their tasks which leads to greater productivity. Earlier studies indicate a positive relationship between employee productivity and business profitability. Therefore, take effective steps to provide a conducive environment to your employees.

Challenges in Records Management & How to Overcome Them

We acknowledge while records management may seem easy, it is not due to the various challenges. The foremost challenge for a small business is developing a robust process. Due to shortage of resources and lack of expertise, they don’t know which record to keep or destroy.

Secondly, cost is another challenge. A small business cannot spend on renting a large office to store records nor can it design an expensive system in-house. We believe the best way to deal with this challenge is by seeking the services of experts in record management.

There are several companies who specialise in records management. Due to the high competition, you can get good rates. They can help you design an effective and scalable system. Indeed, you will need to spend money to avail of their services, but it is a one-time investment. This investment will save you from considerable hassle over the long run.

Conclusion

It concludes our views on the benefits of implementing a records management system in a small business. We highly recommend small businesses to stop ignoring the importance of records management. It can save them from regulatory action, poor decision making, and bad reputation.

Categories : Business