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Faulty records cost a fortune

On Behalf of | Apr 26, 2018 | Business Transactions And Litigation |

Faulty records have been the downfall for many a business owner. Fallout from recordkeeping mistakes is no respecter of business size either. Large corporations, small establishments, mid-size companies – all California organizations and their leadership must prioritize stringent documenting of business transactions. 

Examples of some who misstepped on this mandate include Kaiser Foundation Health System Inc. The U.S. Department of Justice reported in 2017, Kaiser paid $850,000 to settle a case of inaccurate records. Accusations ranged from incomplete prescriptions to discrepancies in documented purchases and distributions of controlled substances. 

A few years earlier, the California Public Utilities Commission had conducted an investigation into PG&E Distribution System. Among the violations investigators looked into were “failure to follow procedures” and “failure to keep the records secure.” It is worth noting that both fall into the category of faulty recordkeeping.

To help executives avoid these expensive errors, the Small Business Association offers advice. It typically aims services, as its name suggests, to small business owners, but the recommendations about keeping the books can apply to leaders in any organization of any size.

Do not wait to pick a system of organization, the SBA says. Start from day one. Many options of systems exist, but which one a manager chooses is not as important as how much he or she uses it. Pick one and stick to it.

Also, the SBA points out three main areas of focus for those systems: accounting, email and spreadsheets. Again, there are a number of accounting programs, spreadsheet options and email varieties. Modern technology provides choices of cloud-based software versus downloadable products, too.

Still, the particular program matters little. What does matter is that owners choose a method they feel comfortable using to maintain accounting and other records. That way they can keep their records on track from the first day they are in business.

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