How (& Why) You Should Keep Your Records Straight

Advice (and free templates) on records management for entrepreneurs.

Yes, you did it! You received the funding you needed to get your business idea up and running. You are excited, can’t wait to hit the ground running, to gallop towards becoming the next unicorn on the field. And of course you are most excited about making sure that you keep accurate records… Aren’t you?

Ok, yes, I’ll admit that this is not the most exciting topic, but I would like to point out a few things that if done now will make your life easier in the long run, save you time and headaches, and maybe keep you out of trouble with the authorities.

I am by no means a professional in this field, but after 8 years working at a law firm and 7 months in a startup environment, I have learned a few things about document and information management. And I promise to leave you with some simple steps and templates you can easily adopt to your needs.

What is a record, you ask?

A record is “a thin plastic disc carrying recorded sound in grooves on each surface, for reproduction by a record player” (source: Google Dictionary).

Well, not exactly what I am talking about here but it is a nice analogy. Instead of “recorded sound” you will find recorded information about your business in the “grooves” of the surface. The “grooves” are your documents (pdfs, google docs, Microsoft docs if you wish, or Apple’s numbers and pages). And the “reproduction” of this information will be done not by the “record player” but by you and your team.

Got it? Sound = information. Grooves = documents. Record player = your team.

OK, let’s go!

Some Tips for a Solid Records Management Strategy

Can you imagine having a record collection without labeling your plastic disks? Or without a designated space to keep them? How would you find your favorite David Bowie record? How would you tell apart your classic from your rock collection? Here is what you should be focusing on:

Naming Convention (for documents, folders, subfolders):

  1. Name — Give them a name that makes sense and that will capture the meaning of the given document or folder.
  2. Date — If there is a particular date relevant to the document, especially if it is a contract, it should be included directly in the document name. You will likely start collecting multiple contracts, so it makes it easier for you to identify the right one with one glance.
  3. Consistency — Find a consistent way of naming your documents. Do you write the name of the doc first or the date? Do you use abbreviations or not? Whatever you do stay consistent so sorting, and finding, is easier.
  4. Keywords — Think about keywords that identify the document and would make it easy for someone who does not know your system to find it.
  5. Ease of Use — Don’t make this overly complicated. Don’t use too many words and don’t create too many subfolders. Brevity is key!

Location:

Select one place to store your records. A cloud-based system is the most convenient because you can grant access to new employees easily and access your files from anywhere, at any time. We use Google’s G-Suite for our documents and it’s great! Easy to use and cost effective for a small team.

Procedure:

  1. Write down a brief guide on your procedure. The complexity of this depends on the size of your company and the variety of documents you keep. I’ve created a sample policy that is by no means exhaustive, but will give you a general idea on how to structure yours.
  2. Communicate the procedure to new employees so they know what to do starting day 1.

Volume — How loud is too loud? (Or how much is too much?)

  1. Because we are able to save our records electronically we sometimes tend to save way too many, and many duplicates. Since there are no boxes piling up in the back hallway or basement, it’s harder to keep an overview of what is there. Pruning is key! And when you save a document, think about why you are saving it (is it necessary?), and ask yourself whether or not someone else may have saved it already. If you have a big team (e.g. where everyone receives the same docs via email) you might want to designate one person in charge of saving documents.

Emails

A brief note on emails: Yes, we all know how to search for an email in our inbox of 1,000,000 emails. But sticking a label to emails, just as if you were to stick them in a folder on your google drive, is a helpful way to narrow down the searching by theme.

I also find it useful to save some emails to my google drive folder. For example if the email has pertinent information useful for the team or could be seen as an agreement between two parties.

Paper Records

Remember those white sheets? Yes, paper does still exist. You will receive paper invoice, paper contracts, maybe even letters! Scan and save all of them. Well, the ones that are important. And find out if there are requirements to hold on to the paper.

Good Record Keeping Day 1 = High ROI Over Time!

It’s the end of the year and your outside accountant is asking you about the year’s expenses. Business lunches, coffee beans, office furniture, you name it. Think hours and days spent sifting through receipts, invoices, order forms, etc. Not what you want to do while you are also working hard on the next round of fundraising and improving your client services. BUT, what if have a system in place whereby you track all expenses and save all receipts and invoices in the same place, all the time, as they happen. Wouldn’t that be easier?

You just hired 5 more people who create content, save documents, and possibly make purchases on behalf of the business. You will want to get new team members on board as quickly as possible. And wouldn’t it be great if they all followed the same guidelines (that you created) when it come to saving documents? If you have a logical system in place it won’t take your new hires any time to see how things are done at the company. Less training and a shorter learning curve = more time to do the important stuff, like developing your business and fundraising.

Unicorns are special, but they too might look into the face of an auditor one day. I can’t say I have much experience with this but I once witnessed a tax audit and clearly remember the look on the face of the CFO… let’s just say it was not pleasant. Not only do you need to have kept your records straight for a situation like this, but you also need to have compliant accounting (meaning tracking your expenses and paying taxes!) An audit will be much less painful if all documents and information you are being asked to produce are properly organized and saved.

A Brief Note on Information Management

Besides saving your important documents in an organized fashion, there is also some information you should be tracking as you start your new business. To name just a few:

  1. A list of your expenses. Here is a sample spreadsheet. It’s a simple way of tracking your expenses without having to get an expense management software (which you will want to get eventually). In addition you might want to use a service like Expensify to track all those little expenses your team makes on personal credit cards (business lunches, coffee meetings, taxis). Expensify lets you create expense reports in PDF, as well as CSV format for an easy import into your existing spreadsheet or software.
  2. Procedural Guides (well, maybe day 1 is pushing it a little, but let’s say year 1). Write down how you do things. For example: A guide on your document naming convention; how invoices are paid and expenses are reimbursed; a guideline on branding and marketing. Even if you start with just a few steps it can be useful in the long run (you will likely add more steps as your company grows). Again, this will make your life so much easier once you expand your team, because new employees can be onboarded super quickly.
  3. HR Stuff (Once you have your first employees.)
  4. Obviously you need to keep documents such as employment contracts, confidentiality agreements, insurance and tax documents for all of your employees (check your local laws on what is mandatory).
  5. You should document conversations you have with your employees about their performance. Because guess what, in a few months time you will have forgotten what had been said and you may want to access this information when it’s time for the annual performance review. And consider emailing the employee a recap to make sure everyone is on the same page.
  6. Think about creating an HR practices guideline and policy. For example, how many vacation days does everyone get; how will you handle parental leave; who gets which benefits (are they different for temporary and permanent employees)? Obviously this topic is very broad and becomes more important as your team grows. Employment and labor laws should always be consulted when making decisions about things such as benefits and HR procedures.

Resources

My sample Documents:

If you want to learn more about this topic:


Now, go have fun creating your new records selection, or sorting through those dusty old boxes of LPs. And feel free to reach out to me @ isabelle@daphni.com if you have any questions or comments.


Special thanks to Willy Braun for his great editing skills.
Photo by
Mr Cup / Fabien Barral on Unsplash