All businesses have a wide range of documents that they need to store and protect. Whether they are financial records, statements or personal data from your clients, making sure all this data is safe and secure is essential. There are a number of ways to store these documents, but there are two main categories; manual and electronic. Which method you prefer depends on your own personal preference as well as the nature of your business. The majority of businesses tend to use the electronic method of record keeping because they find it easier to get information, produce reports and meet legal and tax reporting obligations. Just like everything in life, there are pros and cons associated with both options of storing business documents. Today, we will be looking at the different methods of record keeping and will be discussing these advantages and disadvantages to help you decide what’s best for your business.
Electronic Storage Options
Storing documents electronically is the option most businesses decide to go for. Accounting software is usually used to help make electronic record keeping simpler and it also contributes to creating meaningful reports. Choosing accounting software can be tricky and will depend on your business. Some businesses require a number of different software programs to ensure all legal and tax needs are met. To make your decision, speaking to a financial advisor is advised before you purchase any kind of electronic record keeping software. You also need to make sure you have electronic or cloud backup (or both) to protect your records and to ensure they’re secure and safe.
Pros of Electronic Storage
One of the advantages of electronic document storage is that it is easier to record all the transactions of the business, including expenses and income, pay for employees and details of assets and stock. It is efficient and uses less space than manual storage. You have the option to record a sale when invoices are raised, not when you get a cash payment from a customer. Electronic storage makes it easier to generate invoices, orders, financial statements, debtor reports, inventory reports and pay records of employees. It keeps up to date with the latest tax laws, rulings and rates and reporting functions are automatically tallied. Records can be backed up and kept safe in the case of theft or fire.
Manual Storage Options
A paper-based system of storing documents is favoured by some businesses. There is a range of different storage options when it comes to manual record keeping and if you decide to store your documents in this way, then you should make sure you are streamlining the way you store them. Safestore has self storage options at many different locations across the country, where you can store old paper documents without cluttering up your office space.
Make sure you sort out and store all your paperwork, payments and receipts in twelve separate months. You need to make sure you keep all the original documents, date all the correspondence and note all the dates of transactions and the amounts you have paid out. It is highly advisable to backup all the documents electronically on some kind of external storage device other than a PC’s internal hard drive.
Pros of Manual Storage
Manual storage has its advantages. One of them is it is cheaper to set up than electronic storage. It is easier to alter and correct entries. Your data is less likely to be corrupted or lost, as long as it is stored safely. Generating duplicate copies of the same document is usually avoided. It is easier to implicate manual record keeping because the process is simpler than the electronic method because you don’t have to have any familiarity with how accounting software processes and handles your information.
With so many methods of document keeping, it’s best for you to do your research before you make a decision on what is best for you and your business by weighing out the pros and cons of each method and comparing this information with your business’s requirements.