Information is important to the operation of a company. A system. Records Management. C h a p t e r Introduction to Records Management

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1 C h a p t e r 11 Records Management 11-1 Introduction to Records Management 11-2 Managing Physical Records 11-3 Managing Electronic Records Wire_man/Shutterstock.com Heath Korvola/Digital Vision/Jupiter Images Information is important to the operation of a company. A system is needed for organizing, storing, and retrieving records and for removing outdated records. As an office worker, you will need to follow records management procedures carefully. These procedures include how to organize, store, retrieve, and dispose of records. This series of steps is known as the record life cycle. This chapter will give you the latest information about the various media used for storing records and the skills to use the most common filing systems. 372

2 11-1 Introduction to Records Management Outcomes 11-1a Classify records according to their value to an organization. 11-1b Describe the activities in each phase of the record life cycle. 11-1c Apply procedures of a records management system. Value of Records A record is stored information that has continuing value and is made or received by an organization. Records are valuable because they are used for daily operations or provide a history of the organization. Employees use the information contained in records to make decisions, complete tasks, and plan for the future. For example, each time an item is sold by a company, a record is made that shows details of the sale. This record can be referred to later when shipping the item to the customer or sending an invoice for the item. This record, along with others, will provide a sales history for the item. The sales history will help employees predict how many items may be sold in the coming year. Some records are more valuable to an organization than others. Records are classified according to their usefulness and importance as described below. Examples of each type of record are shown in Figure Key Terms record p. 373 record life cycle p. 374 records management p. 375 physical records p. 375 electronic records p. 375 filing p. 376 alphabetic filing system p. 376 numeric filing system p. 377 archive p. 378 retention schedule p. 378 record stored information that has continuing value and is made or received by an organization Vital records are essential to the company. These records are often not replaceable. They may be stored permanently in a secure location. Important records are needed for the business to operate smoothly. These records would be expensive to replace. They may be stored for a long term in a secure location. Useful records are convenient to have but are replaceable. They are stored in a location that is easy to access for as long as they are referenced often. Nonessential records have one-time or very limited usefulness. They may be kept only for a few days or weeks until they are no longer needed. Figure Records Class by Value CLASS Vital records Important records Useful records Nonessential records Cengage Learning 2013 EXAMPLES Articles of incorporation, deeds, copyrights, reports to shareholders, and mortgages Financial statements, tax returns, personnel files, and contracts Business letters, purchase orders, policy manuals, banking records, and customer addresses Meeting announcements, routine telephone messages, and advertisements Check point Why are records valuable to an organization? 11-1: Introduction to Records Management 373

3 Record Life Cycle record life cycle the creation, distribution, use, maintenance, and disposition of a record The usefulness of each record has a beginning and an end. Therefore, each record has a life cycle. The record life cycle consists of the creation, distribution, use, maintenance, and disposition of a record. Different activities occur in the different phases of the life cycle. The phases of the record life cycle are the same regardless of whether the records are kept on paper or microfilm or in computer files. The phases of the record life cycle are listed here in numerical order. However, the distribution, use, and maintenance phases may occur several times for one record. For example, a record may be sent to a person who requests information, used to complete a task, and then filed. Later the same record may be needed again by someone else, so the process will be repeated. 1. Creation or collection. The cycle begins when records are created or collected. 2. Distribution. During this phase, records are sent to the persons who will use them. 3. Use. Records are commonly used in decision making, for reference, in answering inquiries, or for satisfying legal requirements. 4. Maintenance. When records are kept for later use, they must be organized and stored, retrieved as needed, stored again, and protected from damage or loss. The exact procedure you use in this phase will vary depending on the type of record. 5. Disposition. Records are disposed of either by destroying the records or by moving them to permanent storage, often at less expensive storage sites. Check point What happens to records in the disposition phase of the record life cycle? Records are stored and retrieved in the maintenance phase of the record life cycle. James Hardy/Jupiter Images 374 CHAPTER 11 Records Management

4 Records Management Systems Records management is the control of records from creation or receipt to their final disposal. Because records are valuable, being able to store and retrieve records quickly and easily is very important. Using a records management system makes this possible. To make wise decisions or complete a task well, workers need accurate, current information. For example, to prepare a monthly sales report, you need to have the sales figures for each salesperson. Before you pay an invoice, you should check your records to be sure the charges are correct. Before you can mail a package, you need to know the recipient s complete address. You must be able to access needed records easily and quickly. An effective records management system will help you be more productive. You will not waste valuable time searching for information that should be easily available. A records management system includes procedures for: records management the control of records from the creation or receipt to final disposal Selecting storage media and equipment Filing and retrieving records Retaining and disposing of records Storage Media and Equipment Records are stored on a variety of media. The most common storage medium is paper. Although other storage media are becoming more popular, paper records will likely remain a major part of filing systems for years to come. Many records are stored on microfilm, magnetic media, and optical disks. These records require less space to store than paper records. Data stored on paper and microfilm are called physical records. Data stored on magnetic media, such as a computer hard drive, on flash drives, and on optical disks (CDs and DVDs) are called electronic records. You will learn more about these storage media later in this chapter. Storage equipment, such as filing cabinets, should be chosen with specific storage media in mind. For example, if your records are on paper, you might use file folders and a filing cabinet. However, the same cabinet might not be appropriate for filing DVDs that contain records. Valuable records can be kept in fireproof cabinets or vaults. A good records management system includes policies that help you decide which records require special protection. For example, you may need to protect original copies of contracts by storing them in a fireproof vault. Vertical file cabinets, lateral file cabinets, and shelf files are the most common types of equipment for storing paper records. These are described below. physical records data stored on paper and microfilm electronic records data stored on magnetic media, flash drives, and optical disks Vertical file cabinets contain one to five drawers. Five-drawer cabinets provide the most filing space for the amount of floor space used. Vertical file cabinets must be arranged so there is space in front of each one to allow drawers to be opened fully. Lateral file cabinets are made in a variety of drawer heights, widths, and depths to fit different office needs. Fully opened drawers in such a cabinet do not open as far out into the room as do drawers in a vertical file cabinet. 11-1: Introduction to Records Management 375

5 File cabinets are common storage equipment for paper records. AbleStock.com/Getty Images/Jupiter Images Shelf files store records on open shelves instead of in drawers. They come in a wide variety of sizes. Records on open shelves can be removed easily. Shelf filing is most appropriate for filing and retrieving entire folders and is ideally suited for numeric filing systems. Each drawer in a file cabinet or shelf contains two different kinds of filing supplies: file folders and guides. A folder is a container made of strong, durable paper and is used to hold papers. Each folder is larger than the papers it contains so that it will protect the contents. Guides are heavy cardboard sheets that are the same size as or slightly larger than the file folders. The guides divide the drawer into sections and serve as signposts for quick reference. They also provide support for the folders and their contents. Labels are attached to file folders and guides to identify the files. Labels are also placed on the file cabinet drawers to identify the contents. Check point What media are used for physical records? for electronic records? filing the process of storing records in an orderly manner within an organized system alphabetic filing system an arrangement of records according to letters of the alphabet Filing Procedures Filing is the process of storing records in an orderly manner within an organized system. The procedure used to file records varies. It depends on the storage media and the filing system used. Records can be arranged in a filing system by various methods, depending on the needs of the organization. Alphabetic Filing Systems In an alphabetic filing system, records are arranged according to the letters of the alphabet. Letters and words are used as captions on the 376 CHAPTER 11 Records Management

6 guides and folders. These words may be names, subjects, or geographic locations. Both guides and folders are arranged in alphabetic order according to the captions. In an alphabetic filing system, records may be arranged alphabetically by correspondents names, by subjects, or by geographic locations. For example, in an alphabetic name filing system, each record is reviewed to determine the name by which it should be filed. The names are marked and the records are placed in order according to standard filing rules. (Rules for alphabetic filing are presented later in this chapter.) When records are arranged by subject or geographic locations, employees must refer to an index to find the subject title or the location assigned to a person or organization. Then records are filed or retrieved at that location in the files. Numeric Filing Systems In a numeric filing system, records are stored by number. The numeric method of filing is often used when records are already assigned numbers. For example, insurance companies may arrange their records according to policy number. Utility companies often identify records by customer account number. Some companies file records by number even though they are not already numbered. A number would be assigned to the person or organization for which records are kept. Having records labeled with numbers rather than names helps keep information confidential. For example, a visitor to a medical office who sees three file folders placed on a desk would see only numbers not the names of patients. Several arrangements can be used for numeric files. Three common types of numeric files are described in the following list. numeric filing system an arrangement of records according to numbers In a consecutive numeric file, records are arranged in simple numeric order. In a chronologic file, records are arranged by date. In a terminal-digit numeric file, groups of digits in a number are read from right to left when placing numbers in order (rather than from left to right as with consecutive numbers). WORKPLACE CONNECTIONS Today is Carlos s first day of work. Mimi Yung, Carlos s supervisor, briefed him on the filing system they use: Carlos, the records in our department are confidential. We use a numeric filing system so that unauthorized people cannot locate specific records easily. To keep these files secure, we have a policy that allows only workers in our department to have access to the name index and the records. What types of records might a company want to keep confidential? 11-1: Introduction to Records Management 377

7 Charging Out Records Regardless of the filing system used by the company, employees often remove records from the files for use in their work. Retrieving a record from the files and noting information about the record is called charging out. Company procedures should provide guidelines for charging out records. The following information is usually recorded when a record is removed from the files: Name and department of the worker who is taking the record Date the record was retrieved Date the record will be returned Charge-out information is kept in case someone else must locate the record while it is out of the files. A retrieval procedure also should indicate whether all workers or only certain staff members have free access to the records. Check point What information is recorded when a record is charged out? archive a storage area dedicated to organizing and preserving vital or historical records Records Retention Records that are used often are kept in active storage. When records should be kept but are not used often, they are moved to inactive or permanent storage. This transfer leaves more space for active records. Many businesses, particularly small ones, store inactive records in commercial records centers. Services may include pickup and delivery of records, initial storage, and destruction at appointed times. Customers are often required to use boxes of a standard size to make the best use of storage space. Vital records or special records of historical value are often stored apart from other records. An archive is a storage area dedicated to organizing and preserving historical records. These archived records may be in the form of paper, computer files, or microfilm. WORKPLACE CONNECTIONS Carla Nagai works in the Accounts Payable Department. Workers in this department often refer to vendor invoices from the current or the previous year. The company keeps invoices in active storage for two years. A new calendar year has just started. Carla collected the invoices from the year before last for transfer to inactive storage. According to the retention schedule, invoices are kept for a total of seven years. Any invoices in inactive storage that are more than seven years old will be collected and destroyed. In what phase of the record life cycle does transferring records to inactive storage fall? retention schedule a document that shows how long particular types of records should be kept A retention schedule is a document that shows how long particular types of records should be kept. Figure shows a partial example of a retention schedule. The retention period (how long the record should be kept in each type of storage) is given for each type of record. 378 CHAPTER 11 Records Management

8 Government authority dictates how long certain records, such as tax returns, should be kept. Company managers may set policies for how long to keep other records, such as bank statements, expense reports, budgets, and correspondence. Therefore, retention schedules will vary from company to company. Check point What is the purpose of a retention schedule? Figure Retention Schedule Cengage Learning : Introduction to Records Management 379

9 Focus on BUSINESS Disaster Recovery Plans A disaster recovery plan provides procedures to be followed in case of an event that causes serious harm or damage. Every business may not be involved in a major crisis. However, every business needs a disaster recovery plan. A disaster may be caused by a natural event such as a hurricane, tornado, or earthquake. Disasters may be due to fires, computer viruses, bombs, or even human error. Disaster recovery planning can help prepare a business to deal with a crisis situation and to resume normal business operations as soon as possible. Companies must be concerned about the disaster recovery plans of partners and suppliers. If a partner or supplier cannot operate normally, this situation can have a serious effect on a company. Companies that work closely together may coordinate their plans. A disaster recovery plan should include phases for prevention, readiness, reaction, and recovery. Prevention involves taking action to avoid a disaster. For example, antivirus programs can prevent damage to computer data. Buildings can be checked regularly for fire hazards. Important data files can be stored in secure locations to prevent loss. Many companies use off-site records storage to limit data loss. Readiness is being prepared for a disaster. Companies must try to judge the damage that events may cause and plan to minimize the damage. The plan should be updated and tested regularly. Training for employees on putting the plan into action is an important part of readiness. Reaction is setting a disaster plan in motion. Companies may move to backup sites when a dis aster happens. They may use alternate means of communication, such as home addresses, pagers, and cell phones. Reaction also involves taking steps to begin recovering from the event and to prevent further damage. Recovery means getting back to normal operations. In the area of records management, recovery involves replacing data lost in a disaster. Computer data may be restored from backup copies. Computers and other office equipment may be repaired or replaced. Many organizations and companies promote awareness and education about disaster recovery. The Disaster Recovery Institute International has a professional certification program for business continuity/disaster recovery planners. What four phases are covered in a dis aster recovery plan? Which phase do you think is the most important? Why? 380 CHAPTER 11 Records Management

10 REVIEW st Century Skills Interacting with Others An important folder is missing from the central files. You discover that someone in your department has signed it out. You go to this person, who is above your level in the company, and he says that he does not have it. The folder is essential for your work. What should you do? 1. Should you confront the higher-ranking person and insist that he give you the file? Why or why not? 2. Should you go to your supervisor and ask her to help resolve the situation? Why or why not? 3. Should you attempt to do your work without the folder and make mistakes because you do not have the information you need? Why or why not? Making Academic Connections Reinforcing Math Skills 1. A single file drawer contains 75 folders. Documents from 15 of these folders were converted to microfilm. The records were transferred to inactive storage. Of the remaining active folders, six had their contents divided into two folders each. a. How many active folders are now in the file drawer? b. What is the percentage of decrease in the number of folders in the active file? 2. Eight departments have requested file folders. Folders are ordered from the supply company in boxes, each containing 25 folders. The number of folders each department needs is shown below. a. How many folders are required to meet the needs of all the departments? b. How many boxes of folders should be ordered? c. How many folders will be left after each department has received the number of folders requested? Accounting 21 Production 175 Finance 48 Public Relations 100 Human Resources 99 Marketing 260 Information Systems 125 Customer Service : Introduction to Records Management 381

11 11-1 Activity 1 Value of Records (Outcome 11-1a) Classify the records below according to their value to an organization (vital, important, useful, or nonessential). 1. Filing procedures manual 2. Job termination record 3. Contract to supply services to a customer 4. Bank statement 5. Deed to property 6. Routine telephone message 7. Mortgage 8. Advertisement for a sale on office equipment 9. Income statement for the previous year 10. Purchase order 11-1 Activity 2 Record Life Cycle (Outcome 11-1b) 1. Review the activities that occur in each phase of the record life cycle. 2. Create a flow chart that illustrates the record life cycle. Give the chart an appropriate title. Use chart elements to show the order in which the activities occur (for one cycle). Include a brief list of the activities with each phase. Add a footnote to indicate the phases that may be repeated several times for one record. 382 CHAPTER 11 Records Management