Record keeping is keeping records, or ”units of preserved information in some permanent form (written documents, photographs, recordings, etc.).” Record can also refer to a collection of such items or a history in general.
Record keeping is typically used in the context of official accounting, especially for businesses or other organizations.
It can also be defined to as:
Record keeping is the process of recording transactions and events in an accounting system. Since the principles of accounting rely on accurate and thorough records, record keeping is the foundation accounting.
Records are important for their content and as evidence of communication, decisions, actions, and history. Records support openness and transparency by documenting and providing evidence of work activities and by making them available to the public.
An example of an accounting event would be the purchase of a company vehicle. The accounting or recordkeeping department would record the purchase of the vehicle as a debit to the vehicle asset account and a credit to cash or liability accounts in the general ledger.
Computerized accounting systems can then use this data to generate asset and liability reports.
For record keeping purposes, ABC limited will have to maintain daily cashbooks for maintaining the petty cash and bank balances.
At the end of the year, they have to prepare Profit and Loss A/c and Balance sheet to verify the profitability during the year. It is one of the simplest ways of maintaining the records of the business transaction.
Before computers and servers became widespread, accounting records were recorded on ledger paper by hand. Each account was manually transferred from the general ledger to T-accounts in order assembly reports and financial statements.
Today technology has change accounting systems and record keeping procedures. Most of these accounting processes that were done manually in the past are now automated. The time savings and reliability of accounting systems also help create more accurate records.
Read Also: What Is The Meaning Of Business Finance
What Does Record Keeping Mean?
Many times accounting and record keeping are used interchangeably, but this is incorrect. Accounting has a much more broad definition than simply recording transactions in an accounting system.
Accounting is used to identify events that need to be recorded, recording the transactions of these events, and communicating the effects of these transactions with people inside and outside of the company. As you can see, record keeping is only a small part of the broader definition of accounting.
According to a recent detailed research, Records Management ensures that institutional records of vital historical, fiscal, and legal value are identified and preserved, and that non-essential records are discarded in a timely manner according to established guidelines and identified legislation.
Benefits of Records Management include more effective management of your current records (both paper and electronic); a reduced / eliminated level of record-keeping redundancies; reduced costs for records storage equipment and supplies; and increased usable office space through the elimination of unnecessary file storage.
In addition, Records Management provides institutional accountability and timely access to information.
What is a Record?
All information created, sent and received in the course of your job is potentially a record. Records provide evidence of your unit’s business activities and function.
Whether something is a University record (as opposed to Faculty records pertaining to teaching / research or personal records) depends on the information it contains and the context of its creation.
Records can be in paper, digital or other formats. Some examples include:
• samples and objects
• social media sites
• maps and plans
• information in business systems
• text messages
• policy and briefing papers
• research data
Stages of Record Management
Following a recent research, below are the different stages of record management:
1. Creation of records
It is the first stage of record management. It is the most important stage. In this stage records are either created inside the organization or are received from outside the organization in form of letters or notices.
2. Storage of records
It is the second step of record management. Once records are created they must be retained or protected. This stage is also known as retention of records. It is the preservation of records for future reference. The records are recorded in such a way so that it can be easily located in the required time.
3. Use of records
It is the third stage of record management. In this step the stored records in the past are used for planning, organized, deciding, and preparation of accounts and so on.
4. Disposal of records
It is the fourth and last stage of record management. Records cannot be stored forever. Outdated records must be destroyed or disposed.
Importance of Record Keeping or Record management
1. Preservation of record
It helps in management and control of important records. It helps to protect necessary records with care and disposes useless records.
2. Evaluating progress
It helps in evaluating progress of organization. It helps in preservation of history of organization. The past records show direction to organization. It helps in finding out the weakness and strength of organization.
Record management gives the account of progress and direction in which organization is going on.
3. Facilitate comparison
Record management helps to evaluate business progress and performance. It helps in comparison between one period of time and another or between same times of business
4. Helpful in decision-making
Records are the memory of business. It is useful for future decisions making process. The study of past records shows direction for future. It supplies information to organization whenever it is needed. Therefore, it helps in taking decisions.
5. Efficiency in operation
Record management helps to provide required information with speed and accuracy. It helps to make office work efficiently and effectively. It helps to increase efficiency of the office.
Records acts as an evidence in the time of dispute. It is important for the settlement of dispute. It can be shown as proof in court.