M&M Monday · Uncategorized

M&M Monday: Document and keep good records!

In the past two weeks I’ve been approached by several business owners seeking help with legal issues that could have been either avoided or greatly mitigated by accurate (or in one case, any) documentation and/or record keeping.  Time is a precious commodity to small business owners and entrepreneurs in startup mode and documentation and record keeping is a tedious and time-consuming task.  Thus, when time is running short, documentation and record keeping are easy items to neglect.  After all, you can get back to the paperwork later . . . right?  But if you don’t “get back to it” later, you’ve exposed yourself to a host of problems.  It is important to be disciplined to ensure that you have the paper trail and legal documents necessary to protect your interests.

Following are some tips to keep you on track:

  • Employment Processes:
    • create and use checklists for hiring, payroll (see Financial Records below as well), performance reviews, and performance improvement plans
    • using the checklists will reinforce both procedural and documentation consistency across human resource functions, which are critical if your actions are challenged
  • Contract Management:
    • create standard negotiation term sheets and document the processes for obtaining approval for non-standard terms
    • document and clearly communicate signing authorities
    • keep a centralized list of contracts, expiration dates, and renewal and termination clauses
    • add key contract dates into either your own or a designated employee’s calendar and set automated alerts to give you enough time to assess whether you want to invoke a termination or renewal clause or to plan for an alternate solution in the case of an expiring contract
  • Financial Records:  If you find yourself falling behind in your financial records HIRE A BOOKKEEPER!  Falling behind in your financial reporting can not only lead to lost income but can also have serious legal consequences (tax, wage & hour, etc.).  Further, maintaining accurate records allows you to efficiently and effectively manage your inventory, cash flow, and receivables and can provide an early insight into both positive and negative trends.

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