Benefits of Electronic Record Keeping

Paperwork Paperwork Paperwork

In this blog, you will learn why paperwork is important in your business and for accounting purposes, but why it is not so important to allow your office, floor space, desk space or cabinets to be overtaken by paperwork, old and new. 

So, I wanted to share an experience of an office I attended recently. The owner needed help ‘sorting out’ his paperwork. Boy, did he?! In the first 15 minutes of being in his office and checking the folders and cabinets, I found lots!

I found paperwork dating back to 2008 – 13 years old! Remember, we only have to keep paperwork for six years.

I looked at the single computer in the room and checked it for software, in the hope that there may be a some sort of electronic system I could work with. There was none and this computer was not connected to the internet. I later found out that there is no internet connection at on the premises. Delving into the data I had, from desktop, I could see that sales invoices had been raised under Word and then saved on the desktop. 

Before I go on, I want to say that this owner is not alone in running accounting operations in this way, but its just not practical anymore and you will know why as you read on…

Losing Important Data

As I am working out what the system actually is for physical record keeping, the owner appears and asks me,  “if this computer broke today, everything would be gone?” I said, “yes, it would because everything is on desktop!”.

Now, I cannot remember the last time I saved to desktop as all of my documents are saved in the Cloud. The reason for this is because my data is secure and the risk of losing that data, very important client data, or risking that data falling into the wrong hands, is very very low. 

Prior to the Cloud, I used external hard drives and USB sticks. They were the next best thing to desktop and provided a good facility for holding a second copy, ‘just in case’. However, not always, these devices could become corrupted and data would be either irretrievable or would cost  a lot for someone to try to retrieve it. So not the most reliable. 

And then before that, we had CDs and Floppy Disks….do you remember those? 

In all honesty, anything that I had to carry around with me and to ensure that I did not leave them anywhere was another risk which I was glad to do away with when the ability to save in the Cloud arrived. 

And I haven’t looked back since and in fact, the added features and developments over the years is testament to technological advances making our lives easier and as business owners, more efficient and productive.

The Key Benefits of Electronic Storage

I am going to list out my 7 key benefits of electronic record keeping for ease and I am sure you will then agree, its a no brainer.

1. Secure Records – Choose Google Drive, One Drive or Dropbox (the top players) which have free and paid subscriptions and your data will be secure. Remember to choose a highly protected password and never opt to save password if using a public computer.

2. Increased Productivity – If you have an accounting software like Quickbooks and you choose to invoice your customers through the software, these invoices can be emailed direct to the customer, same with statements and auto reminders, helping you with cashflow automatically which means you have more time to focus on driving your business forward. Equally, using the snap feature to record purchase documents, takes a matter of seconds (the time it takes to take a photo) and you now have an electronic copy AND your accountant has gained instant access. No need to collect all the paperwork, put it in a folder, organise it, travel to your accountant to drop it off. All that time saved to spend on…whatever you want. So we can do more, if we have an electronic record keeping system. 

3. Cost Savings – as you probably gather, less printing, less paper, less travel, less time needed are all ways you can save money. 

4. Validity of document – an electronic version of an invoice is treated as an acceptable record by HMRC. You can keep the original or rely on the electronic version, it is up to you. 

5. Electronic version is better than a physical version – you can keep the electronic record as long as you want to as the storage levels offered on the free subscriptions means you will probably not run out of space within your cloud account and you won’t feel overwhelmed with paperwork like before.  Also, I know you will have experienced this more than once – when you go into a shop such as Tesco and you are given a till receipt for your purchase, have you noticed that the ink of the receipt may last a matter of months if you are lucky? so this is a risk in itself because it is supposed to act as proof of purchase for at least six years! so saving an electronic copy does guarantee that your proof of purchase will still be around in six years’ time should HMRC require it. 

6. Easy & Quick Data Access – by saving in the Cloud, I have really benefited from being able to access data from any device. So I have my electronic storing facility on my phone, iPad and laptop so I can respond quicker to client requests for copy paperwork or if they have questions. It makes me more productive too.  

7. Shareable – all cloud documents can be shared to another email address, whether to the business owner, a third party etc. This saves time, paper, money and postage if I had to print and send to a third party or to the business owner. And again, it improves efficiency in business. 

Now, whilst I promote electronic record keeping, I am very accustomed to clients who need a bit more guidance to make the transition. I am also very aware of those business owners that are afraid of change and find comfort in the physical holding. And that’s fine. We would suggest assisting with putting systems in place and then providing training so the business owner and/or appointed workers are comfortable and know what to do. Or for those who really do not want to make the change, we tend to suggest that we will keep an electronic copy. This has been made easier with clients who take up our Quickbooks subscription as we can now store electronic copy of invoices against transactions through the Receipt Snap feature. 

To finish