6 best practices for proper documentation and filing

When working in HR, you’re going to come across a whole lot of documentation. From health insurance benefits records to staff background checks, every company is built on stacks of legal documents and professional files. Because of that, one document that’s filed incorrectly can bring the entire system down, leading to compliance headaches and even potential lawsuits. Make sure all of your documents are filed according to regulations with these best practices.

Understand that errors are common

Before getting into best practices, it’s important to understand that errors are everywhere in filing and documentation. Third parties and other members of staff can easily make mistakes, invalidating entire documents or leading to unexpected results. As Fair Credit points out, “1 in 4 credit reports contain errors from at least one of the three main credit bureaus”, proving just how common mistakes are on important documents.

Fortunately, though, a thorough HR audit and following company-wide protocols can minimize mistakes. Now that you’re aware of the abundance of errors in legal documents, let’s start looking at best practices to avoid them.

1. Keep track of your documentation

A common compliance headache in businesses is missing documentation. When you have thousands of sheets of paper and online files, it’s easy to misplace one or two. However, this can have devastating impacts on the company – particularly if it’s an important document, like details of tax-deductible expenses or employee health benefits records – and must be taken seriously. Compliance auditors will take missing documentation to be proof that something you said happened didn’t actually happen, leaving you in hot water.

After filing any document, keep a record of it in your system. This can be physical or digital. The exact location of the document should then be added to a secondary digital file, like a spreadsheet, that can be easily searched through to source the document’s location. For example, you may detail:

Benefits file Z : Area 12, Cabinet 2

If you ever need to find the file again, you’ll simply get up the spreadsheet, search for the correct file name, and there it is. 

2. Go paperless

Over 60% of sales teams and just under 50% of marketing teams in companies are taking advantage of digital documentation tools. We know, however, that this figure should really be 100%. 

Companies must be able to easily control who can edit, view, and get rid of documentation to meet compliance requirements. It’s also smart to have a history of every revision made in case you’re obliged to provide this information. This ensures your business maintains a structured record of all your documentation and actions taken around your filing of documents, and guarantees that the information is readily available as required by law and policies.

To do this with ease, your documents should be digitized. Electronic submission and filing of documents allows the owner to retain complete control, minimizing who has access to the documents and what they can do. This vastly reduces the chance of another employee messing with the information in your documentation and drastically reduces risk.

3. Develop a retention strategy

When submitting documentation or receiving important files from outside your company, you must have a retention strategy. This allows all staff to quickly understand which documents must be kept and which can be destroyed.

For example, any physical document that you’ve also got a digital company off can be destroyed along with any non-tax deductible receipts, whilst anything else must be retained unless directly specified by the CEO. This ensures that all relevant documentation is ready when you need it and prevents your filing from becoming bogged down with useless information.

4. Keep up to date with policy and regulation changes

Policies are changing constantly, with updates to nationwide and industry-specific compliance frequent in the U.S. – like the recent changes to the Corporate Compliance Program Evaluation Criteria.

As an HR professional, make sure you stay up to date with any changes and implement them within your business. Keep tabs on compliance blogs that’ll inform you of any news and look out for changes on the government website.

When a change comes into force, update your systems accordingly and amend any documentation that’s yet to be filed to ensure compliance. Send out an email to relevant employees, too, updating them on the policy change.

5. Ensure consistent information

Your documents must be consistent to ensure compliance. When you have supporting documentation or connected files, double-check that the information within them corresponds to one another. This includes specified dates and times of events, as well as information like income, credit scores, and anything else that’s important.

Inconsistent documents are a sign of a disorganized company and would be a red flag to a compliance auditor. Mismatched information may even invalidate entire collections of documents. Check your information as you complete documentation to ensure a rock-solid system. 

6. Always learn from your mistakes

Even with best practices in place, mistakes are going to happen from time to time. A wrongly filed document or a typographical error in a benefits file isn’t going to be the end of the world – or even of your business! But, it can cause compliance issues that are costly and time-consuming to fix.

The vital thing to do when a mistake happens is to first correct it and alert relevant employees and officials, and then to learn from it.

If you didn’t double-check an employee’s financial history and it’s led to an issue, for example, always double-check in the future. If you misplaced an important file, create a more thorough storing system and brush up on your file management. 

Related: More than half of surveyed companies find ACA compliance burdensome

HR employees aren’t perfect, but by learning from your mistakes you can become a better employee every day.

Compliance headaches are something that every HR professional wants to avoid. Hopefully, these best practices have given you some steadfast procedures and protocols to implement, ensuring proper documentation and filing throughout the company.