Tips & Resources

The Complete Guide to Records Management System

Pohan Lin
By Pohan Lin
29 July, 2022

Learn what is records management system and how it can help you keep track of your piling customer information.


Businesses generate large volumes of data daily, both digital and paper. These documents can be hard to keep tracking. For instance, 46% of workers say it is often or always challenging to find the right information. Poor records management reduces productivity by over 20%. It could cost a business $20,000 per worker each year.

The solution? Businesses need a record management system to keep track of important company documents. A records management system boosts productivity and ensures you meet regulations.  In this article, we’ll look at the meaning of a records management system, why it’s essential, and how to create a records management process for your business.

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What Is Records Management?

Records are information a business creates in-house or receives from an external source. Usually, you keep them for compliance requirements or to show evidence of business transactions. Examples include financial documents, social media reports, and company emails.  There are many records required for storage for a set period of time一for instance, tax returns are in storage for at least five years.

Records management involves creating, maintaining, using, and disposing of records. Records management aims to ensure you can access records to support business decisions and maintain records in compliance with the law. 


What is the difference between records management and document management?

The main difference is you can change documents but not records. For instance, an invoice changes while you work on it, but once you complete it, it becomes a record. Not every type of document becomes a record, though.

A document management system (DMS) handles document storage, modification, and sharing. A records management system stores and maintains records based on established policies. Records management is a subdivision of document management that includes paper and electronic records management.

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The Records Management Lifecycle

This refers to all the stages a record goes through, from creation to disposal. According to the UN, there are four key stages:

  • Creation phase
  • Active phase
  • Inactive phase
  • Disposition phase

1. Creation phase

The creation phase starts as soon as a record is received or created. If you create records in-house, you should ensure the record is complete and accurate. For all records, this stage involves storage in the correct place (physically or electronically). It is also critical to assign an appropriate security level.


2. Active phase

The activate phase involves record usage, sharing, retrieval, and referral. You must preserve the integrity of the record and make it available for current business processes. Some records have a short active phase, such as payroll records, while others have a long active phase. 


3. Inactive phase 

The inactive phase begins when records are no longer in active use but must be kept for legal or other reasons. You should identify and list records you no longer need to keep handy in the office or shared systems. You can then transfer them to onsite storage or offsite commercial records centers. 


4. Disposition phase

The final phase is the disposition of records. Disposal of records may involve deleting digital records, destroying physical records, or the records may be archived. If disposal involves destruction, you have to get the necessary permissions first. 

What Is Records Management System?

In 2020, the global market for records management systems was $3.9 billion, and this could reach $8.8 billion by 2027. With these systems, you can securely manage and store records while maintaining access and leaving an audit trail. Records management systems may be fully or partially digital. But both involve using document scanners to scan physical records.

86% of workers say they experience challenges when searching for information. A records management system can help since you can quickly find records like company invoices with a built-in search engine. To organize your records, you can add metadata and labels. The software also comes with built-in security and access authentication, and will contain much more detailed information than your call management system.

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Types of Records Management Software

There are two main types of records management software: on-premises and cloud-based. They offer the same features but differ in how they store and maintain data. 


On-premises records management systems 

On-premises records management systems are hosted in your servers and storage facilities.

  • Pros: You’re in control of your data, and you won’t be dependent on your internet connection to access records. You also won’t have to pay a fee to a third-party system provider.
  • Cons: On-premises systems may not be viable for small companies due to the substantial upfront costs. You’ll have to keep backups of your data, and you will be responsible for record security and maintenance.


Cloud-based records management systems 

Cloud-based systems are hosted online by a software provider for a monthly or annual fee. The cost varies by provider and the number and type of features you need.

  • Pros: There are no upfront costs, and you won’t have to perform in-house maintenance. Your provider will handle security, and you can access records from anywhere as long as there’s an internet connection.
  • Cons: Most cloud-based systems have limited storage. If the internet goes down or your provider experiences a problem, you can’t access your data. Plus, the subscription cost could be expensive if you need a lot of features.

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Records Management Software Features

When choosing records management software, you should look for features like:

  • Keyword search: 88% of workers would benefit if they could search for records from one place. So you need a system that lets you search for records based on keywords or tags.
  • Tiered access: The system should have different classification levels, like “public” or “confidential”, with corresponding access permissions. That way, only authorized employees can access records.
  • Mobile access: 43% of workers can’t access company records on a mobile device. But since so many people use their phones, a system that allows mobile access is a must-have.
  • Software integrations: It’s also helpful if you can integrate records management into business systems like your CRM or PySpark DataFrame to pandas software. 
  • Scanner compatibility: Ensure the software is compatible with your document scanners.

Benefits of a Records Management System

Records management systems allow you to easily access and manage your business records. They also save time and let you focus more on critical business functions. Other benefits are:

  • Scalability: You can add users and features to support data-driven business growth.
  • Security: Only those with the correct level of authentication can access critical records.
  • Collaboration: With record management software, it’s easy to share records with coworkers on many devices.
  • Efficiency: Some systems automatically tag records, which 82% of workers say would benefit them. Most software also has keyword search features, so you don’t waste time trying to track down data.

How to Create a Records Management Process

Now let’s look at how to create proper records management practices for your business. You should:

  • Create a records retention schedule
  • Establish records management policies
  • Create a procedure for records disposal


1. Create a records retention schedule 

First, you must decide how long to keep records as part of a records retention schedule. You could determine how long to store records through an analysis of business needs or legal requirements. Or it could be determined by the central government or other entities. Either way, a record retention schedule should include:

  • How long you should preserve different types of records
  • Who handles electronic record retention and storage for paper records
  • How to dispose of records

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2. Establish records management policies

Next, you should put policies in place so everyone in the company knows how to manage records. You should base your policies on International Organization for Standardization (ISO) 15489 for records management. Your policies should include:

  • Who has access to records and for how long?
  • Electronic document management, including the labeling and tracking of records
  • Who should handle the monitoring and management of records?
  • Software security measures, such as Azure data lake security
  • When you will transfer records to offsite storage or destroy them


3. Create a procedure for records disposal

Lastly, you should determine how your company will destroy physical records and delete digital records. For paper records, you should:

  • Decide how to shred records (for instance, in-house or via a shredding company)
  • Ensure only authorized personnel can destroy records
  • Provide a certificate of destruction when required

For digital records, you should delete all copies of a record, including those on USB drives, CDs, computers, or mobile phones. And, like paper records, you should ensure that only authorized employees can delete records.

The Takeaway

In order to keep track of your piling customer information, you need a records management system. A records management system saves time and improves efficiency with features like keyword search and software integrations.

You should also create policies to manage your records in line with legal requirements and business needs. These policies should cover all stages of the record lifecycle, from creation to storage and disposal. That way, your employees will always have the correct information at the right time.

Pohan Lin

About the author

Pohan Lin

Pohan Lin is the Senior Web Marketing and Localizations Manager at Databricks, a global Data and AI provider connecting the features of data warehouses and data lakes to create lakehouse architecture along with Databricks HDFS architecture. With over 18 years of experience in web marketing, online SaaS business, and ecommerce growth. Pohan is passionate about innovation and is dedicated to communicating the significant impact data has in marketing. Pohan Lin also published articles for domains such as Landbot and PPC Hero.

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