Best Practices for Record Management in the Construction Industry

by Mary Varano

Keeping thorough and organized records is vital to maintaining a successful construction business. Unfortunately, the job of record management often falls through the cracks for many contractors. Poorly organized or incomplete records can have serious consequences. A construction business involved in a dispute with a client or subcontractor might not be able to prove their case, for example, without up-to-date copies of the contract and all amendments or change orders. Code inspectors expect construction companies to have thorough files. How can a construction business manage its records most effectively? The following best practices can help companies develop and implement record retention systems using the latest technologies.

What Is Record Management in the Construction Industry?

Record management is the process of organizing and storing important documents, such as:

  • Contracts;
  • Invoices;
  • Permits;
  • Blueprints; and
  • Tax and financial records.

This process once involved filing cabinets and massive quantities of paper. Today, many businesses have gone as close to “paperless” as possible, choosing to digitize their records. Going paperless has both benefits and drawbacks. Whether or not a construction company chooses to minimize the amount of paper it uses and stores, a thorough record management policy is essential.

What Are the Advantages of a Record Management System?

The following are only a few of the advantages of a strong record management system:

  • Ensures accuracy: Contracts in the construction industry often go through multiple revisions, both before and during a job. Companies and their crews need ready access to the most up-to-date version of the contract at all times.
  • Facilitates communication and compliance: With access to necessary documents, construction companies are better able to communicate with work crews, customers, subcontractors and perhaps most importantly, city permit offices.
  • Prevents waste: Construction companies can exercise greater control over their money when they have a complete set of financial records available. They can avoid unnecessary expenditures and cut down on inefficiencies.


Best Practices for Record Management

Designate a Responsible Person

A successful record management system needs accountability. Someone must be responsible for maintaining the system. Almost everyone in a construction company may have a part to play in record management, but the proverbial buck must stop somewhere. This person, perhaps known as the document manager, must be on-call to make sure the system is running efficiently and troubleshoot problems as they arise.

Know What Is and Is Not Important

Good record management is largely about retaining important information and discarding unnecessary documents. Construction is a complicated industry, but companies should work to keep their record management systems as simple as possible. Important documents include the following, although each company may have unique needs:

  • Financial statements
  • Contracts
  • Permits and licenses
  • Insurance policies
  • Tax records
  • Employment records

Take Advantage of Technology

Cloud computing technology has created more possibilities for record management than ever before. Until very recently, all filing systems relied on filing cabinets and storage boxes. It is now possible for businesses to store many or most of their records digitally, without the need for extensive on-site computer storage. Construction companies should carefully research the available options to see what might meet their needs.

Keep Everything Central

One of the main goals of record management is to make documents easy to find. Centralizing document and data storage ensures that everyone in the business will know where to look when they need a particular document or file. This could be a central storage area for physical files, a cloud-based application or both.

Keep Everything Secure

A construction company’s records may include personal, proprietary or confidential information. The company has a responsibility to keep this information secure. Data security should be a top priority. Cloud-based service providers can assist with this.

Make Regular Backups

Regular data backups can be all that stands between a construction company and disaster. Even with cloud computing, which provides convenience in the form of accessible off-site storage, businesses should hedge their bets by making regular backups of all essential data.

Shred Unnecessary Documents

Disposing of clutter should be central to any record management system. Some types of paper can go straight to the trash—or the recycling bin. Other documents should go through a shredder first. Cross-cut shredders can help prevent anything with sensitive or private data from falling into the wrong hands.

Have a Written Record Management Policy with Workflows

A written policy for document retention ensures that a construction company’s record management system can endure. If the document manager suddenly quits, for example, their replacement can look to the written policy for guidance.

Adapt Your Record Management Policy and Practices to New Circumstances

A company’s record management system is not written in stone. Companies should modify their systems to change whatever does not work and meet new challenges as they arise.

Corrigan Krause Specializes in Construction Accounting

The Construction Services team at Corrigan Krause can help support your construction company as you improve your processes, policies, and workflows. Email to learn how to become a client.