5 Reasons Why Efficient Record-Keeping is So Important
Whether you’re self-employed, work for a small business or manage a large company, record–keeping is essential to the smooth running of your professional life, as you never know when an important document may be needed that you can’t find. However, whilst it is an important factor, convenience isn’t the only benefit to efficient record-keeping. Here are five reasons why efficient record-keeping is so important.
If your records are efficiently organized and safely stored, then it means that they are also protected. Keeping physical records in a disorderly manner in your home or office can increase the risk of them being lost or possibly stolen. This applies to electronic record-keeping as well, because if your records are not secure or protected online it can extremely easy for your personal and business information to get stolen. If your record-keeping is safe and efficient, however, your personal and professional information such as profit, cash flow, accounts, and even your personal bank details, name and address will be safe from thieves.
It is not as well-known as it should be that proper record-keeping is actually a legal requirement, as the invalid filing of tax or income is a criminal offense and could result in jail time. It is important that you check the legal requirements of record-keeping in your state, as every state has its own individual laws for many things, including record-keeping for documents such as tax returns.
Time is Money
In the event of an emergency, you may need to find a document extremely fast, which can be difficult if your records are kept in an organized manner. Law records and medical records should always be kept safe and well organized, as they may be needed in court cases and emergencies. As well as this, time is money. If you’re spending all your time searching through business records, you are wasting time that could be spent working and making a larger profit.
Well organized records can help to save money. If your records are efficiently kept, it will be easier from a business standpoint to prepare your accounts and monitor your cash flow. Once these tasks are better organized, profit can increase as it will be easier to notice where you are losing money and why. Without well–organized records, it is impossible to measure the success of your business and how this success can be maintained or improved.
Separate Life and Work
If your personal and business records are being kept in the same place, it can be difficult to accurately separate your life and work finances and contact information. As well as this, there is a possibility of misplacing important business information and contracts within your personal information if both categories are not separated and organized effectively. You can easily separate these two categories in both physical and digital document form, by using physical binders and secure online document holders.
Efficient record-keeping may seem like a chore at the time of organizing, however, in the future, it can make both your personal and business life a lot easier. As well as being a legal requirement, keeping your files well organized will also improve how efficient your overall business is because if one part of your business is disorganized, it can affect your entire work.