Does your electronic Document Management System Comply?

Keeping your business records in an electronic document management system (DMS) is a great way to manage your files securely, cost effectively and reduce your paper usage in the office.

In recognition of the growing number of businesses implementing electronic document management systems the Australian Taxation Office (ATO) has created a document outlining ‘Record Keeping for Small Business’. Today we look at the simple steps you need to follow to ensure your DMS is legally compliant.

Certain requirements have always been in place for on-premises paper files and electronic document management systems are no different. As with paper records, business owners must keep electronic records for five years after they are prepared, obtained or transactions completed (whichever occurs latest). The records similarly must be in English or in a form that the ATO can access and understand in order to work out how much tax business owners are liable to pay.

No-brainers right? Keep your documents for 5 years and in English. Easy.

Keeping paper records electronically is possible whether you use a manual or electronic system. The ATO accepts the imaging of business paper records onto an electronic storage medium as long as they’re a true reproduction of the original paper records, kept for five years and accessible by the ATO at all times.

Hardly rocket science. Basically, keep your docs off photoshop for five years and available to the ATO.

System Security

While on-premises documents are subject to security methods, electronic document management systems have a set of rules all of their own. These standards make sure your DMS and computer are secure and the records inside are accurate.

To meet ATO electronic record keeping standards you must be able to show you have:

• Control over access to your computer (aka set a password!)
• Control over incoming and outgoing information (secure your email inbox)
• Control over processing information
• Back-up copies of your computer files and the ability to recover records if your computer system fails (Back-up often!)
  (Guide for Small Business Operators, ATO, May 2011)

Once these standards have been met and the original paper records have been copied across to your approved DMS the documents can be destroyed. Woohoo! You’re ready to be paper free!