How to Ensure Safe Records Management for Accounting Firms

Wed, Nov 30, 2022
By: Jim Beran
How to Ensure Safe Records Management for Accounting Firms

A client's financial data is what makes an accounting firm go 'round. Thus, they should have a great records management system. Missing records, poor documentation, and regulatory write-ups can be a nightmare. One missing spreadsheet could mean an expensive mistake for the client and the accounting firm. Nintex found that 49 percent of respondents to a study said that locating documents was a problem in their organizations. Some accounting firms keep boxes and boxes of records – records they don't really need to keep. Creating a records retention schedule helps keep your clients' records organized. It also significantly reduces the risk of identity thieves hitting the jackpot if they break into your business.

What Documents an Accounting Firm Needs to Retain

You might consider keeping client evaluation processes, including signed engagement letters, client checklists, approvals, and disengagement letters. Billing records, CPE attendance records, and individual licensing information should also be kept.

You should also keep any records that provide you documentation of the client's engagement in the event that the client tries to sue you – you'll be able to prove that your services are similar to other accountants' services. Finally, you should keep work product and transmittal letters. Only keep the final version of these documents.

How Long Should an Accounting Firm Keep Documents?

An accounting firm most likely knows how long to keep client information, such as receipts, tax returns and accounting books. However, the length of time you need to keep other information depends on several factors, including:

  • The client's area of practice. For example, some bar rules require lawyers to keep records for seven years.
  • The length of the discovery rule for a professional liability claim.
  • Regulatory and / or contractual requirements. For example, doctors and lawyers are required to keep records, including financial records, for a certain amount of time. Clients who receive government funding must also keep records for a certain period of time.

Your retention schedule for the same type of document might vary from client to client.

Records Management at Gilmore

Creating a records management system helps manage all the paper an accounting firm deals with. Gilmore provides a records storage system for documents you need to keep. With a good records storage system, you'll be able to:

  • Track any document with a bar code.
  • Prevent the loss of important documents.
  • Minimize identity theft and fraud and the legal exposure associated with them.
  • Protect against the elements.
  • Protect against emergencies.

Finally, using a records management system with a third party like Gilmore frees up office space and removes filing cabinet clutter, so you have more room for new clients. You can also search for documents and download a digital version if you use our scanning services in conjunction with our records storage management services.

Contact Gilmore

To protect your business and your clients' documents – and to impress clients with how fast you can locate a document in years of filings, contact Gilmore to discuss records management and scanning services. Once a document outlives its retention date, it's easy enough to pull the document and have us shred it so that you and your clients have less risk of having private information stolen.