Electronic Documentation Considerations | Maillie LLP

Electronic Documentation Considerations

by Amanda Bernard, CPA, CFE, CMA


Converting your paper documents and data into electronic format may seem like a daunting task, but it is one that should be considered now more than ever.  Documents previously maintained in paper format are being converted to electronic data files for easier access and sharing.  One study  found, on average, 7.5% of paper documents are lost completely while 3% of the remaining documents are misfiled, and the cost of maintaining a single-four-drawer filing cabinet is estimated to be $2,000 annually.  The remote working environment has also created an accelerated need for better data management technologies. 

A proper electronic document management system (EDMS) can help fulfill legal requirements, facilitate records retrieval, reduce the cost of storing obsolete records, and ensure data and documents remain accurate, complete, and reliable.  Here are some key steps in developing a proper EDMS system:

• Define and identify all records, documents, and data that are either already in electronic format and/or those you wish to convert to electronic format.  Select a naming function that will allow for easy identification and future retrieval without opening the document.  Consider whether a date or index is needed as part of the document name. 

• Determine document storage methods, keeping in mind future search and retrieval needs.  Maintaining files on a local drive is not appropriate if more than one individual needs to access the documents.  On the other hand, making documents publicly available to the entire organization would not always be appropriate either. 

• Evaluate record retention requirements.  These requirements may be governed by business need, legal or regulatory requirements, or potential litigation response.  Purging old records frequently reduces storage costs and ensures the records are not on file if presented with a legal subpoena, for example.

• Data protection and privacy concerns

     o Electronic records should be protected from accidental or intentional alteration and from deletion while the record still has value. 

     o Only authorized personnel should be permitted to create, access or purge electronic records.

     o Evaluate personally identifiable information (PII) concerns.  Maintaining social security numbers and other PII may require security methods            such as encryption or redaction.

     o Maintain adequate system controls, including audit trails and procedures for measuring the accuracy of data input and output.

     o Perform routine data backups.

• Develop and document an overall information governance strategy.  Also consider maintaining an outline of where electronic materials and hard copy documents are stored, how long they will be retained, and who has access to them. 

Many of the concepts involved with maintaining electronic records are not new, for example, there has always been a need to evaluate data retention and disposition requirements and to determine proper classification of paper records, but these concepts are now being applied to electronic documents and records.  The best way to reduce filing errors and the cost of maintaining data is to explore electronic document management options while continuing to maintain good data governance policies.

Axios HR, October 11, 2018.  https://axioshr.com/the-burden-of-paper-employee-files-and-how-to-relieve-it/