As a follow up to our last post about having a system of record to make audits seem like a walk in the park, there is more to it. Recall that a system of record document management solution holds the confirmed supporting documentation for your critical company data, such as, transactions, client accounts, vendor contracts, etc. If your current file storage solution is not working and you want to convert it to a system of record there are a few things that are required.
Like all good things, it will take some effort on the front end. But as we stated in the last post, it is well worth it. And the value is more than just having a better audit experience. Its worth it because you also have better information at your fingertips and that leads to better decisions. So what’s required? Be humble because you will likely learn that your organization is not perfect, be diligent and have some fun because you will discover nuggets of gold.
No company is 100% perfect but the ones that follow this approach are far better off. The first place to start is to determine what your source business systems are. Where do you have your client list, account list, vendor list, employee list, etc.? These lists should be the definitive, perfect source of data, right? It’s actually doubtful that its perfect. But nonetheless, this is the place to start by getting access to that data.
Next, for each item in the list, each client, each employee, each vendor and so on, determine what would constitute the required documentation to verify that item. Is that an account agreement or offer letter or contract. Then add to that set of documents, the other documentation that would create the complete “file” for the item. For an employee you also need an I-9. For a vendor you also need a W-9, and so on.
Armed with the lists of items and lists of documentation that support the existence of the items, go and gather the documentation. Find all the contracts and account setup forms and make sure that you have one for every client, account, employee, etc. There are many ways to do this and we believe the digital approach is the best. But paper does still exist so consider converting the paper to the digital as part of the process.
Now the fun begins. This is the point where you will find out how good or not so good your source lists are. The process of matching the lists to the documentation will show you items in the list that shouldn’t be and also items missing from the list. Also evident will be the list items that are partially accurate. For instance, the client name is correct, but the address is wrong or type of service they use is wrong. This clean-up process is the hidden value of this process.
When the entire process is completed, you will have cleaner, more accurate data and that data will be supported by documentation. Structure your new processes and procedures to keep it this way, ie. workflow. Yes, it is a process and does require resources but the payoff is huge for the organization. And now you are ready to bring on the auditors.
Millennia Group has been providing document archiving services and a system of record workflow and document management solution since 1996. For more information, contact us or visit our website.