What is a Business Record?

A business record is a document that records any type of business dealing. The terms is often used to encompass all documents that provide background on interactions with customers and potential clients, as well as records that relate to specific transactions occurring between a vendor or supplier and a customer. The purpose of maintaining a business record is to be able to produce documentation that is related to a specific transaction and identify the exact sequence of events that occurred as part of that transaction. Many governments require companies that operate within their borders to develop a records management strategy that maintains a wide range of records that cover just about every aspect of the business operation.

Within a company, a business record may relate to several different functions. While many people tend to think of this type of business document as having to do with sales made to customers, the fact is that the term is also applied to a wide range of documents. This includes accounting source documents like requisitions, purchase orders, packing lists, invoices, and the payments issued for those invoices. Employment contracts and personnel folder are also considered to fit the basic criteria of a business record, since those documents do present significant transactions in the life of the company. Even interoffice memorandums, minutes of board or investor meetings, and press releases are often considered to fall into the broad category of a business record.

The main function of any business record is to document the history behind specific events in the life of the company. For example, the personnel file of an employee will provide valuable data regarding the hiring of the individual, any awards or disciplinary actions that are taken, adjustments to wages or salary, and the circumstances surrounding the resignation or termination of the employment. Records of this type protect the

employer

from claims of unlawful termination or other types of charges that an employee may bring. At the same time, the detail in a personnel folder may also work to the advantage of the employee if the employer has failed to document certain events or takes actions that are outside the scope of current employment laws.

Maintaining accurate records is essential to providing documentation related to revenue generated, operational expenses and the preparation of tax returns. In the event of an audit, a company with a solid business record policy will find it easy to produce documents that support the figures submitted on the returns. Doing so makes it easier to verify each line item on the tax return and avoid the imposition of late fees and other penalties that would apply if the business could not provide documents to back up those figures.