If you’re an organization considering the move to cloud document management, you might be wondering about the differences between self-hosted and SaaS solutions. Some organizations want complete control over their software and hardware. Others prefer lower maintenance costs, pre-configured security features and automatic software updates.
Read on to see how SaaS and self-hosted solutions differ, so you can make a more informed decision on how to deploy a document management system for your organization.
Software as a service (SaaS)
SaaS offers customers access to software over the internet on a subscription basis, with the software hosted by the vendor or another third-party.
There’s no installation required, and resources such as servers or storage capacity can typically be scaled up automatically, or via a quick conversation with the SaaS vendor. On top of that, using SaaS generally means you don’t need to worry about the costs of maintenance, server space or hardware that you’d need if you were maintaining your own solution in-house.
Built-in security is also a particularly attractive benefit of SaaS products. The right vendor will have security controls already in place that are continually assessed, updated and improved to respond to the latest threats. Some vendors can also provide specialized security services to support compliance concerns and industry regulations, so customers have peace of mind that they’re abiding by the rules. Some of these features and services may include:
Automatic and on-demand detection of system threats and vulnerabilities
Penetration testing and other services that simulate real-world threats
Security controls that restrict access to sensitive content and features
Software as a service platforms can also be well-suited for organizations wanting built-in business continuity measures. In many cases data stored in these solutions is replicated and encrypted in real time to multiple sites at different geographical locations, so if disaster strikes in one location, your data is safe and sound in others.
Especially as technology improves with vendors innovating on their platforms year after year, SaaS is proving to be a convenient and cost-effective solution for the modern enterprise.
Self-hosted solutions
Unlike a SaaS platform, where your back-end infrastructure is managed by experienced IT professionals outside your organization, these deployments offer ways for you to take more control of your hardware, software and updates. Organizations in certain industries, such as government or finance, may also be subject to certain regulations that restrict how they can store information, thus preventing them from deploying a SaaS solution for the time being.
However, a self-hosted solution can still be cloud-based, and therefore share some of the advantages of a SaaS platform. Let’s take a look at each of the self-hosted solution types.
On-premises
Before cloud technology systems, on-premises deployments were the de-facto standard for document management. The most notable differentiator for this type of deployment is owning and maintaining hardware, and the need to manually deploy software updates. Here’s a look at advantages and disadvantages:
Advantages
Ability to purchase the highest-performance or most-specialized machines for your purposes
Security that can be configured for your organization, in-house by your own IT staff
More control over computing resource usage
Capability to increase access points for custom integrations and other add-ons
Disadvantages
Top-of-the-line hardware can be expensive
Managing backups and associated sites can be labor-intensive and time-consuming
Need to spend money and time to upgrade hardware to keep up with pace of technology
IT will need to spend time and resources to implement even basic security settings
Recurring costs such as maintenance, server rooms and extra electricity usage
Self-hosted cloud
A self-hosted cloud deployment operates in largely the same way as an on-premises deployment with the exception of maintaining your own hardware. In fact, the applications themselves are the same and simply hosted on a vendor’s servers — most of the popular platforms, such as Amazon AWS and Microsoft Azure, allow you to run standard computer operating systems on them. Here are some of the advantages and disadvantages:
Advantages
Scalability and flexibility to grow the solution with your business
Reduced system downtime after a disruption with built-in security and backup features
Hardware infrastructure maintained by experienced IT professionals outside your organization
Capability to increase access points for integrations and other add-ons
Disadvantages
Costs of renting hardware and specialized support services can add up
Implementations aren’t completely configurable as hardware isn’t on-site or owned by you
Hardware might not be optimized for your needs (or customizable to do so)
IT will need to spend time and resources to implement even basic security settings
Recurring costs such as maintenance, server rooms and extra electricity usage
Finding the right solution
The first question you really need to ask is if you need control over the hardware itself. These days, SaaS solutions offer so many valuable benefits, like managed security, disaster recovery and automatic updates that they are a worthwhile choice unless you absolutely need to use your own hardware. Modern cloud applications offer flexibility without any of the hassle setting up hardware or paying for extra space, power or cooling for your server room. They can give your IT team extra time and resources to keep your business running smoothly.
Digital process automation is a staple of operational success in the modern workplace. Forward-thinking businesses have prioritized automation technology in their digital transformation initiatives for its ability to increase efficiency, transparency and accuracy of information circulated throughout an organization.
Read on to learn what digital process automation is and why it’s an important component of the modern business landscape.
What is digital process automation?
Digital process automation (DPA) is a method of digitizing processes by eliminating manual steps and improving user experience for customers, vendors and staff. Like business process automation, DPA as a methodology is meant to accelerate workflows while decreasing human error. DPA is a core component of enterprise content management (ECM) software in that it supports the routing, modifying and storing of important data traveling in and out of an organization.
What is a digital process automation platform?
A digital process automation platform captures information from electronic forms and other sources to launch digital business processes. These platforms also enable users to customize digital business processes to automatically complete a variety of tasks within the scope of regular business processes, such as public records requests, travel and expense requests and job application reviews.
Most digital process automation solutions enable you to design these processes as a diagram using a WYSIWYG (what-you-see-is-what-you-get) interface. More advanced solutions offer extensive business process template libraries that are essentially plug-and-play. One example of this is the Laserfiche Solution Marketplace. Watch the below video to learn more about the Laserfiche Solution Marketplace.
Also be sure to check out the below infographic “Laserfiche 4 Steps to Innovation” to see how Laserfiche users can not only deploy solutions quickly, but get involved with a larger community of innovators.
Why is digital process automation important?
DPA software helps eliminate redundant busywork, freeing up time for staff to focus on strategic business priorities. A few immediate benefits of DPA software include:
Accelerate workflows
Users can revise, approve and complete document revisions faster with automated routing and task notifications. Users can also easily reassign tasks if someone is out of office.
Increase transparency
Custom business process reports enable process managers to measure success and eliminate workflow bottlenecks. Administrators can also get a clear picture of employee workloads with process monitoring dashboards.
Improve accessibility
Advanced DPA software solutions enable users to complete tasks from their phones as well as their desktops to keep processes moving, saving time and helping to reduce duplicate data entry by users in different locations.
What is the difference between DPA and RPA?
While both DPA and robotic process automation (RPA) technologies are designed to automate and streamline processes, they are different in one key way: how they integrate with outside applications. While a DPA will generally use a specialized API or native integration for a particular application, an RPA solution usually interacts with applications like a human would, using a user interface (UI). This makes the possibility for integrations almost endless for an RPA solution. Because RPA solutions can also be integrated into a DPA solution, to provide last-mile integrations with applications that lack traditional integration points, this means that RPA opens up the integration possibilities for DPA solutions as well.
Choosing the right DPA software solution
When selecting a DPA software solution for your business, it’s important to consider:
Scalability: Your DPA solution should be able to grow with your business.
Ease-of-use: A simple-to-learn system is key to business adoption. Be sure to look for a provider with substantial system support.
Integration capabilities: Your DPA solution should be able to complement existing systems within your digital ecosystem.
Innovative technology: If your DPA software provider isn’t prioritizing innovation, your business won’t be able to evolve at the rate it should be. Stay competitive with vendors that consistently improves upon its technology.
Further reading
Ready to learn more about DPA technology? Download this free guide to learn how process automation improves workplace efficiency and saves time and resources across the enterprise.
Researching digital process automation platforms? Check out the G2 grid to compare top vendors.
Accounts payable (AP) has been an essential part of business for decades. However, today’s organizations have more expected of them in the digital age – vendors now often want payment almost instantly and at the same time completely without error.
To keep up with the changing demands thrust upon modern AP departments, many organizations have used automation software to streamline their processes. However, AP is an incredibly complex process that may still require some manual work.
One of the largest challenges for traditional AP automation is processing data from invoices when the format changes from document to document. Oftentimes organizations design custom solutions to solve this problem. Still, they may take months of setup before AP teams can see value.
However, technology is always evolving. New software can now harness the power of artificial intelligence to recognize not just one type of invoice, but virtually any invoice format sent its way. These new, cutting-edge tools are a boon to organizations looking for a more thoroughly automated AP process, freeing up staff to focus on strategic initiatives and new ideas instead of occupying themselves with busywork.
How AI Makes AP Better
Machine learning is a specific type of AI, used across a variety of industries, from healthcare, to government, technology and finance. The most common way for ML to work is to examine a large data set (say, for example, 1,000,000 photos of various animals) and then find patterns that result in a desired output (for example, which of those photos featured a dog.)
Going back to the challenge of processing invoices, the machine learning solution to this problem works similarly. By examining a wide variety of invoices, the ML algorithm can be trained or instructed to recognize particular patterns, learn from them, and understand fundamentally what makes an invoice, an invoice.
With this knowledge, the ML algorithm, given a group of invoices where no two are formatted the same, would still be able to identify and extract data – such as invoice number, invoice date and vendor name – from each document in the set.
Benefits of using AI for Invoice Processing
Using process automation software with AI technology offers a wide variety of tangible benefits for your organization, such as:
Accurate information: Easily extract invoice information such as invoice date, PO number, invoice number and total due.
Realize ROI faster: Implement a faster AP solution that doesn’t require extra effort to recognize different invoice formats.
Boost productivity: Minimize error-prone data entry by automatically pushing invoice data to enterprise applications.
Protect against fraud: Identify invoice discrepancies early with automated data validation against previously approved POs.
Improve cash flow: Shorten payment cycles and avoid late fees by automating reminders and streamlining payment processing.
Go Beyond What Was Possible with AI
AI technology allows you to go beyond what was possible before with AP automation. Adding the ability to recognize different invoice formats to your workflows can enable your organization to be more agile, adaptive, and efficient when it comes to paying out to vendors.
Want to see for yourself how Laserfiche® can transform your AP department with AI? Test out this technology with our invoice examples or one of your own on our smart invoice capture page.
Optical character recognition (OCR) is a technological process which converts text in a scanned or photographed image into text that can be edited, stored or searched for electronically.
OCR is an important tool for businesses working to digitize information gathered from documents or photographs into an electronic system, and it’s especially useful for processing information in large quantities of documents.
What is OCR Used For?
OCR is used across industries and departments for a variety of business processes due to its flexibility and efficiency as a scanning tool. In the context of digital content management, OCR has two primary functionalities that are applicable to any business: eliminating data entry and capturing information.
The newly captured information can then be searched for and even be used to initiate or fill in data as part of a business process workflow.
OCR Eliminates Data Entry
Data entry is a standard part of many job roles — but it doesn’t need to be manual task. OCR eliminates data entry by recognizing characters (letters, numbers and symbols) in a scanned document or photograph, and pulls the information from those images into your computer or mobile device. That information can then be dealt with on a digital platform, and even stored in a digital repository for ease of search and retrieval.
One such example of OCR’s powerful capabilities is within local government administrative tasks, such as historical document preservation. Tompkins County, NY scanned over 9,000 boxes of important documents and records from 1817 to present day. Meeting agendas, deeds, citizen records and more were digitized, saving the county over $5.5 million in storage costs alone. When scanning these historical documents, employees at Tompkins County used OCR to pull important information into their electronic records management system, making the history of the county easy to access for county workers and citizens alike.
OCR Enables Intelligent Capture and Search
OCR is important to intelligent capture, or the process of retrieving specific information from a scanned or digitized image. “Intelligent capture with OCR is not just taking in all the characters on an image, it’s recognizing which words you need and grabbing the exact information you need,” says Tessa Adair, Technical Product Manager at Laserfiche.
Take, for example, you’to receive a reimbursement from your AP department. Rather than manually typing out information from the scan, OCR can pull the characters from the receipt for you. Intelligent capture with OCR takes it a step further by only targeting and saving the information you need on the receipt, such as the date and total, and ignoring the sections for the receipt you don’t need, such as the phone number or the “thank you for your business” note at the bottom. With this technology, OCR is applied in a way that enables employees to take action only the most relevant information for your business.
Once information is imported with OCR into a computer or mobile device, that data can be stored and routed to fellow employees via an electronic document management system. When users within an organization search for specific keywords within their digital repository, that information can be made readily available with the click of a mouse.
For more information on how OCR technology enables improved search and retrieval of documents and records, click here.
OCR is Powering the Future of Work
In addition to improving file searchability and speed of data entry, OCR is also enabling developing technologies like machine learning to improve the jobs of employees dealing with information-heavy business processes. In the context of document management, machine learning is an important and evolving tool for eliminating redundant and time-consuming manual tasks.
OCR is an important component of evolving tech across industries and business functions. In addition to aiding in machine learning, OCR is a keystone element of:
Intelligent character recognition (for handwriting).
Sentiment analysis.
Object recognition.
Data privacy protection.
As the digital workplace continues to grow, OCR will continue to enable businesses to automate and simplify tasks across departments to help employees do more of the work that matters.
OCR Empowers Digital Transformation
OCR is an important component in an organization’s digital transformation journey. Phase 1 of a successful digital transformation involves digitizing documents for proper storage and access across an organization, and OCR enables businesses to gather information from non-digital sources like meeting notes, agendas, photographs, letters and more for use within a digital content management system. From phase 1, the benefits only increase.
“Storing and sharing the information in an ECM system isn’t the only benefit of OCR. The bigger benefit is getting the necessary inputs needed to kick off workflow automation, inform AI-powered decision making, and enable insightful reporting,” says Tessa Adair, Technical Product Manager at Laserfiche.
A digital filing system, as you might expect, primarily serves the purpose of converting your more traditional filing systems, such as filing cabinets and stacks of folders, into a digital format that makes it easier to search for and store documents.
An enterprise content management (ECM) system does everything digital filing system software can do and more. It adds additional layers of security, administration and collaboration that make it ideal for offices that want to become not only more organized, but also more scalable and efficient.
One of the most obvious advantages of any digital system is the ability to scan and capture digital or paper documents. Digital filing systems can reduce clutter and create more space around the office, while being able to store documents almost indefinitely, which can be crucial for the proper preservation of historical records.
Along with being able to scan documents, most digital filing systems allow users to fill out information about each entry — frequently referred to as metadata — that makes content more searchable and thus easy to find. This can include anything from time stamps to receipt amounts and invoice numbers, information that many organizations find essential for business operations.
Compared to a standard digital filing system, quality ECM systems include optical character recognition (OCR) technology, which can pull information directly from a document to auto-generate its associated metadata. For example, accounts payable departments across industries regularly process invoices and compare them to purchase orders sent out to vendors. With OCR, they would be able to streamline the matching process, and with the help of other technologies, likely create an entirely automated process.
Search and Storage
A key advantage of a digital filing system over a paper one is the ability to more easily search for documents. In a digital filing system, you can search for documents based on name, contents and associated metadata. Digital folders are also incredibly more flexible than physical ones, being able to expand with your organization’s needs.
ECM solutions go beyond simply making documents easy to find and store, however.ECM systems also make information easier to share and keep track of, with features such as co-authoring and version control. Most enterprises face challenges dealing with collaboration — whether multiple teams need to sign off on a document or work together, documents can be lost or contain errors if communication isn’t a priority. The collaboration features of ECM help teams collectively agree on the formatting and content of documents, while version controls assist in efforts to provide an accurate history of them. This is a boon for highly regulated industries, such as finance. An ECM solution can support these firms in their efforts to stay in compliance while providing their own staff and auditors up-to-date and correct information.
Ease of Access
With so many devices at the disposal of today’s users, most digital filing systems feature a variety of ways to access their content. A digital filing system may include different clients for desktop, web and even mobile. This is a boon for expanding enterprises as it keeps documents, ideas and projects moving.
Of course, the more accessible information is, the harder it is to control what is public or private. However, ECM systems offer tools to restrict or open up document access to meet your organization’s needs. For example, if you’re a government agency that needs to retain transparency, you can host a public portal with an ECM system that supports compliance with FOIA and allows constituents to stay informed about agency projects, initiatives, meeting minutes and more. On the other hand, the same agency can use an ECM system to restrict access to confidential documents, such as staff records.
Choosing the Best Solution for You
Although a digital system can fulfill many of your organization’s needs and facilitate the move towards a paperless office,the right enterprise content management system may be your best solution as it can offer even more benefits.
With the ability to pull data from scanned documents, foster collaboration and provide the tools to support compliance, ECM can help your organization more clearly manage its information in order to propel itself towards success.
Ready to learn more about the benefits of an enterprise content management system?
WORM storage is data archiving technology that prevents information from being edited or deleted, while allowing it to be read as many times as needed. An acronym for “write once, read many”, WORM enables businesses to lock down records to ensure that no unauthorized changes can been made.
Organizations primarily use WORM storage to comply with recordkeeping regulations, address information security concerns and ensure data integrity. For example, in the event of an SEC audit, companies can use WORM to prove that they have not altered or tampered with the records in question.
The costs associated with poor data management are high, and proper utilization of WORM storage can help mitigate the risk of incurring expensive fines. Today’s financial firms risk millions of dollars’ worth of fines and lawsuits if they do not meet regulatory requirements.
For example, FINRA fined 12 firms a total of $14.4 million in 2016 for failing to protect financial records in a format that prevents alteration. From a business perspective, unsecure, lost and inaccurate data will lessen credibility with, and increase skepticism from, current and future clients. Additionally, corrupted data can cause businesses to make strategic decisions or even change the direction of the firm based on incorrect or skewed information.
Making Compliance Simple
Firms focused on improving records retention should consider using WORM-compliant technology to add an extra layer of security to their records.
A few industries that can especially benefit from using WORM storage include:
Education: Student records have strict retention rules for how long they’re stored. Storing records in a WORM-compliant format can ensure you’re not editing or moving a student’s records around—so when it’s time to dispose of records or present them upon request, you know you’re doing so accurately and in good faith.
Healthcare: The Health Insurance Portability and Accountability Act (HIPAA) has its own set of retention rules for the healthcare industry. These rules, combined with the need to ensure patient privacy, makes WORM storage an attractive option, as it can help in efforts to limit access to and support retention of sensitive information.
Financial Services: As mentioned before, SEC Rule 17a-4 requires by law that wealth management firms such as broker-dealers use specific technology for their records, including WORM-format. In addition, as of 2022, audit trails are now an alternative for broker-dealers to preserve records. For this industry, the consequences for non-compliance can be damaging to their reputation and their bottom line due to expensive fines.
There are two ways to implement WORM storage in your organization. The first way is through hardware, using tape or another type of medium that permanently keeps data, making the only deletion method physical destruction of the WORM storage device.
Still, with many solutions moving to cloud and SaaS services, choosing specific hardware can be problematic. However, many providers of these services now provide software-defined WORM solutions that provide the flexibility of software with the strictness, security and indelibility expected from a hardware-based WORM solution.
Whether you use software or hardware to support your compliance goals, the concept works in much the same way. When someone adds data to a WORM drive, it stays there indefinitely. The idea that you cannot edit a WORM drive’s data only applies to data already stored there—the potential to add new data is always there, provided you have enough storage space left on the drive.
Figure 1: WORM storage allows authorized users to add to or read information from a device, but not delete or edit its existing information.
As you can see in the diagram above, it’s quite simple—user A adds data to the drive, then user B, then user C. Now, users A, B and C can presumably read all the data on the drive—barring any other security settings or access rights—but none of them can edit what’s already there. It’s read-only for everyone involved. This way, when auditors or administrative staff want to pull up retained records, they have the peace of mind of knowing the records are in the same condition as they came in when they entered their retention period.
A Worthwhile Solution
WORM storage, along with the right records management system can go far in assisting professionals in the financial, education, healthcare, and government industries meet their toughest compliance challenges.
For those in the financial services industry facing some of the strictest regulations, WORM storage can provide a secure and accurate system of record. Combining WORM storage with records management software can give broker-dealers additional tools to support broker-dealer compliance with SEC Rule 17a-4, such as the requirements for records retention, records quality and accuracy, audit reporting, and a designated third party.
Records management solutions and WORM storage can help broker-dealers and compliance-minded professionals across industries gain confidence and peace of mind in the face of stringent compliance requirements. With this confidence, they can better focus on meeting client needs and growing their businesses.
Established as part of the Securities Exchange Act of 1934, SEC 17a-4 defines a set of records preservation and retention requirements for registered broker-dealers. SEC 17a-4 itself became part of the law in 1997, and in recent years, enforcement of this rule—along with the consequences for violating it—have increased significantly.
Outlined in this 14-page PDF released by the SEC, the implications of 17a-4 can mean a lot for your business and its bottom line. Read below to see how you can step up to the challenges presented by each section of 17a-4, saving your organization time, money and staff resources:
Retention Periods – Rule 17a-4 (a), (b), (c), (d)
This section of the rule outlines records retention requirements for today’s broker-dealers. It requires that firms retain most of their records for 3-6 years, whether they’re hard-copy documents or electronically stored information (ESI) such as emails.
Figure 1: The standard records management lifecycle for most broker-dealer record.
To meet these requirements, most organizations need a way to classify and track records throughout their lifecycle, from the date they’re created, through their time in use, their retention period and eventually final disposition or archival. They’ll also need a solution that is able to put all these documents in the right place.
This is where document and records management tools come in. A document management system can help you gain control over all the different types of information you need to keep track of and even capture your paper documents for storage in a digital format. Many records management solutions offer the ability to monitor record lifecycles and notify you when records need to move from one stage to the next. In addition, advanced records management systems allow you to define retention schedules and policies at the folder level, saving records managers from having to store or move records through their lifecycles one at a time.
Audit Trail OR Write-Once-Read-Many (WORM) – Rule 17a-4(f)(2)(ii)(A)
Audit Trail
SEC recently made its first changes to Rule 17a-4 in 2022. The most significant change is allowing broker-dealers to adopt an electronic recordkeeping system that meets either the audit trail requirement OR the WORM requirement. It should provide a complete time-stamped audit trail to preserve electronic records in a manner that permits the recreation of an original record if it is altered, overwritten or erased; defined terms extracted from the final rule include:
All modifications to and deletions of a record or any part thereof
The date and time of actions that create, modify or delete the record
If applicable, the identity of the individual(s) who created, modified or deleted the record
Any other information needed to maintain an audit trail of each distinct record to ensure the authenticity and reliability of the record will permit the re-creation of the original record and interim iterations of the record
The audit trail requirement particularly applies to final records required pursuant to the rules, in lieu of drafts or iterations of records that would not otherwise be required to be maintained and preserved under Rule 17a-3 and 17a-4 or Rules 18a-5 and 18a-6. Moreover, the electronic recordkeeping system used by the firms must automatically verify the completeness and accuracy of its processes for storing and retaining records electronically.
WORM-compliant
WORM-format has been a long-time exclusive requirement for broker-dealers to preserve record in a non-rewritable, non-erasable format. This means that once a firm finish using a record and is ready to put it into retention, they must retain the record in a format where it cannot be changed, moved or deleted.
The best part of using records management software to assist with this is that you can support record content integrity even before the record enters retention. Even when actively working with files, a good records management solution can set up read-only restrictions for particular records, which can assist in preventing their modification, relocation, and deletion. Read this blog post to learn more how to create a WORM environment with cloud and SaaS solutions to support compliance.
Quality and Accuracy of Recording Process – Rule 17a-4(f)(2)(ii)(B)
In addition to the setting standards for records themselves, SEC Rule 17a-4 also requires that broker-dealers “verify automatically the quality and accuracy of the records process.” This means that you must preserve data integrity and quality for examination by auditors. The right records management solution would have the tools necessary to keep logs of these processes and catch input or output errors. To preserve business continuity—in case of disaster recovery or otherwise—some solutions even automate the process of data replication and creating backups. Most importantly, the best solutions detect file corruption, degradation of records and file tampering, which gives you peace of mind that you’re presenting auditors with up-to-date, valid and accessible information.
Serialized Original and Duplicates – Rule 17a-4(f)(2)(ii)(C)
SEC 17a-4 further requests that broker-dealers serialize their electronic recordkeeping system and time-date this media for its required retention period. This makes it easy for auditors to identify records and establish a timeline for each record as it goes through its lifecycle.
To assist broker-dealers in fulfilling this request, the right records management solution can make records easy to identify and place chronologically. Many of them assign unique numeric entry IDs to each record, and then store the record’s entry date and last modified date in the system. Some records management solutions even allow you to locate records by their assigned entry ID, their creation date, or any retention policies that may pertain to them. This search-ability makes it easy to generate reports that auditors can review.
Downloading Indexes and Records – Rule 17a-4(f)(2)(ii)(D)
To comply with SEC 17a-4, a firm’s electronic recordkeeping system must “have the capacity to readily download and transfer copies of a record and its audit trail (if applicable) in a human readable format and in a reasonable usable electronic format, as required by the staffs of the Commission and other relevant securities regulators” under Rule 17a-4(f). This means that the records management solution you choose needs to make its records downloadable in an accessible format.
A robust records management solution will allow you to download files in a variety of formats, from TIFF to PDF, or in its original, unedited format. Those that are a step above may even permit the download of multiple records in an archive file format such as a ZIP file. These download format options give auditors flexibility in how they view records, which minimizes the risk of having format readability issues that could delay the audit process.
Easily Readable – Rule 17a-4(f)(3)(i)
Further emphasizing the need for auditors to be able to read from your records, 17a-4 states that firms “at all times have available, for examination by the staffs of the Commission and self-regulatory organizations of which it is a member, for immediate production of records preserved by means of the electronic recordkeeping system and for producing copies of those records.” Similar to how 17a-4 (f)(3)(i) establishes format readability, this part of the rule focuses on the need for firms to give auditors the proper mediums to review records.
An accessible records management solution will give auditors choices on how to view your records, whether it’s from a desktop, web-based or mobile application. Others will go a step further and include built-in document viewers and the ability for authorized users to export documents, giving auditors even more options.
Facsimile Enlargement – Rule 17a-4(f)(3)(ii)
This section declares that a broker-dealer must “be ready at all times to immediately address the production of records” that may be requested by the governing authorities. This statement takes the issue of readability in a direct way—it demands that broker dealers not only make files accessible, but also ensure that auditors can physically read the files with ease.
Records management software can offer zoom functionality to assist in meeting these demands, and even support record printing for more scrutinizing review.
Separate Duplicate Copies – Rule 17a-4(f)(3)(iii)
According to amended SEC Rule 17a-4, broker-dealers must use “either a backup recordkeeping system or other redundancy capabilities”.
This requirement requires firms to preserve a second set of records that can be accessed and examined if the primary electronic recordkeeping system storing the primary set of records is disrupted, malfunctions or otherwise becomes inaccessible. Other redundancy capabilities, for example, creating two copies on an optical disk, using a different server or group of servers to store a duplicate set of records. A proper records management solution can assist you in efforts to both preserve business continuity and meet compliance requirements by replicating contents across multiple geographic locations and monitoring data storage for durability.
Organize and Index Original and Duplicate Records – Rule 17a-4(f)(3)(iv)
Under 17a-4, firms are required to “organize and index accurately all information maintained on both original and any duplicate system and maintain information necessary to locate records maintained within the system.” This means that as a broker-dealer, you need to have information searchable and easy to locate.
Most records management software solutions allow you to search records by keywords or an ID number, and index scanned documents using optical character recognition (OCR). The best solutions even allow you to share links to records securely in custom-made reports. These features can give auditors a quick reference of records presented to them, with the added ability to search for records if necessary.
Audit System – Rule 17a-4(f)(3)(v)
This section requests that broker-dealers “must have in place an audit system providing for accountability regarding inputting of records required to be maintained and preserved and must at all times be able to have the results of the audit system available for examination”. Simply put, broker-dealers need an audit trail that keeps track of changes made to records and other activities taking place where records are stored.
Records management software can offer extensive auditing capabilities to track system activity. Some solutions even allow you to view, filter and sort audit information and export it in the form of convenient reports. In addition, the right records management software would attempt to keep track of what has happened to a record, even after it has entered disposition or finished its lifecycle.
Access to Records by Regulators – Rule 17a-4(f)(3)(vi)
According to SEC Rule 17a-4, upon request, a broker-dealer must provide prompt access to records and indexes stored on electronic recordkeeping system. This means that even if you stop using a records management solution for any reason, the SEC may still ask you for the records stored on the associated system.
Still, the best software vendors out there will offer to keep your data after you stop using their services, at least for a short time. This can give you the peace of mind that you’ll be able to present information to auditors when they request it.
A Comprehensive Package
With the right records management solution, you can make meeting the compliance challenges presented by SEC Rule 17a-4 a breeze. However, to achieve the best results, you need to choose the right records management software that fits your needs and the requirements set by auditors.
Organizations are mandated by law to retain confidential client, employee and company information for a minimum period of time. So, what do you do once a document outlives its purpose?
Holding onto such a document for too long poses a security risk, and can put your business in non-compliance with current privacy regulations.
Records retention is a practice by which organizations maintain confidential records for set lengths of time, and then employ a system of actions to either redirect, store or dispose of them. Records can be considered evidence of a decision or transaction that took place within your business operations, and should be kept as long as required—or for as short a period as necessary–by regulatory, legal or business governance.
The record lifecycle encompasses the following phases: the creation, distribution, active storage, inactive storage and retention, disposition and archiving of an organization’s records.
For example, in the U.S., many accounting and tax documents are kept for up to 7 years as mandated by IRS requirements. Depending on your industry regulations or business needs, you may choose to keep certain records longer, or even store them in a different manner than other records you maintain.
Records retention is driven by a system of policies, scheduling and infrastructure that enable administrators to comply with governing regulations, laws and business best practices.
Here are three major components of a successful records retention strategy:
1. A retention schedule
A retention schedule is a system of classification that standardizes the different types of records your organization manages and how long they need to be kept. A successful retention schedule is routinely updated to ensure that rules for records retention included in the schedule comply with all laws and regulations which pertain to them.
Here is a simplified example of a retention schedule for a higher education institution, which includes the codes, document types, retention periods and mediums of the records in question.
2. Retention policies
Records retention policies govern the classification, storage, preservation and destruction of all records in an organization. These policies help to ensure that important records are not mishandled, and that temporary records are discarded promptly in an effort to reduce risk and keep the records management system clean, coordinated and secure.
Powerful records management systems enable organizations to monitor records throughout their lifecycle, specifying when a record was originally filed and when it will be eligible for destruction.
3. Records infrastructure
Records are only as good as they are accessible. The records your organization maintains should be easy to search, retrieve and update at all times. Whether preparing for an audit, accessing client information, or making changes to important documents, having a centralized, organized, digital records management system in place ensures that your retention schedule and policies are easily and consistently followed.
Easy-to-use records management systems allow organizations to filter records searches based on whether the record is eligible for cutoff, eligible for disposition or in need of review.
Qualities of a successful records management system should include:
Configurable security: Levels of access to specific documents or folders should be easy to manage by records administrators, to aid in security for clients and your business.
Simple search and retrieval: Records should be accessible immediately upon request, whether by business professionals, or via public portals for clients.
Centralized storage: Whether on-premises or in the cloud, records should be organized in an intuitive, easy-to-maintain digital repository.
Intuitive audit support: Often it’s as (or more) important to be able to demonstrate that your organizations followed regulations correctly after the end of the retention period than being able to find something during it. A system that supports the auditing process can be invaluable in any organization.
Automated records management processes: The life-cycle of any type of records should be tracked and maintained with process automation technology built into the infrastructure, resulting in seamless, transparent storage, access, archiving and classification of any and all records in an organization.
“The best records management solution is one you don’t need to think about,” says Justin Pava, Principal Technical Product Manager at Laserfiche. When considering your records infrastructure, be sure to prioritize simplicity, ease of use and reliability in your records management system.
Records retention is a necessary part of a successful records management practice, supported by a system of rules, regulations and organization the helps businesses run smarter.
To learn how digital records management supports compliance, transparency, security and ease of access, download the Ultimate Guide to Records Management.
STEM Advantage—a nonprofit organization that funds college scholarships, and provides internships and mentors for women and underserved communities—announced that it has successfully expanded to Cal Poly Pomona this year. The award-winning program has reached over 6,200 students and plans to expand to all 23 California State University schools by 2023.
“When we launched STEM Advantage in 2012 at one college in South LA, we never imagined the impact it would have today,” said Lee Ann Kline, co-founder and president of STEM Advantage. “The program now has an unprecedented 100 percent graduation and hire rate post-graduation. The students we work with continue to prove that there is a pool of talented, diverse students at less prominent schools who deserve a chance to be recruited by top companies.”
STEM Advantage will celebrate the accomplishments of students and recognize scholarship donors at the 7th Annual Scholarship Gala. The event will be held April 27 at the California Science Center, Samuel Oschin Space Shuttle Endeavour Pavilion.
George L. Pla, founder, president and CEO of Cordoba Corporation, will be the keynote speaker. In 2012, Pla was responsible for transporting the Space Shuttle Endeavour through the streets of Los Angeles. He is also on the board of trustees for the California Science Center and is an alumnus of California State University, Los Angeles.
“We give often overlooked—and yet, remarkable—students a platform with paid internships to increase their confidence and experience,” said Marlo Donate, head of enterprise marketing and digital IT for Farmers Insurance Group, which works with STEM Advantage to provide internships and is a sponsor of the gala.
“The work of STEM Advantage levels the playing field and helps students who do not have access to the same opportunities and networks,” said Thomas Phelps IV, CIO of Laserfiche, and executive board member for Southern California, Society for Information Management (SCSIM), both of which are also sponsoring the gala. “As an IT leadership organization, SCSIM believes that STEM Advantage helps solves a critical talent shortage at our member companies, while helping well-deserving students.”
For more information or media inquiries, contact leeann@stemadvantage.org.
About STEM Advantage
STEM Advantage’s mission is to mentor, prepare and inspire women and underserved communities to pursue careers in science, technology, engineering and math. STEM Advantage provides scholarships and paid internships to help students graduate with less debt, along with pairing mentors with students who typically are first generation and low income college students. The program is currently offered to STEM students at California State University Dominguez Hills; California State University, Los Angeles; California State University, Long Beach; California State University, Northridge; and Cal Poly Pomona—with the strategic “23 by 2023” goal to expand to STEM students at all 23 California State University campuses by 2023.
One reason organizations don’t take advantage of vendor discounts is that they don’t have a defined workflow to consistently identify, flag and process invoices in the required time frame to qualify for the discount.
2. Reduce the Costs of Long-term Data Preservation
Put an end to the paper chase! Depending on how you currently handle data preservation, records retention and disposal, your savings can be significant.
Storage and Transportation: Keeping documents in offsite storage (along with transporting them to and from a location) can be costly. Electronic document management virtually eliminates this overhead, directly affecting the bottom line.
Filing and Locating Documents: AP staff can spend hours looking for files and filing them when they could be working on more strategic tasks and initiatives. Reducing the labor hours required for these time-consuming and tedious tasks can also boost employee morale and reduce turnaround time for document processing.
Repurposing Space: Use less space for filing cabinets and more space for people. Thanks to electronic document management, onsite storage space is drastically reduced or eliminated, allowing you to reclaim and repurpose the space to support revenue-generating and productive activities, whether it’s offices, work and collaboration areas or a new indoor recreational area.
3. Ease of Access
It’s no secret that our world is more interconnected than ever, and that organizations need to think globally when it comes to their needs, whether it’s for their own staff or their clients.
Digital document management solutions address this by allowing for ease of access. Instead of sending physical invoices through an inconsistent, manual workflow to acquire approvals, a digital document management solution makes invoices, forms, contracts, and support documents easier to track, locate, view, share and approve for payment in a timely and efficient manner.
In addition, a complete digital document management solution should support un-tethered access to processes and documents from a mobile app. This way authorized users can view, review and approve invoices with the touch of a button, as well as access forms or documents on the go, anytime, anywhere.
Digital document management can make the compliance process easier for both AP staff and auditors by allowing you to:
Create an audit trail that logs all activity on critical documents.
Automatically flag suspicious or unauthorized modifications to data or configuration settings
Index documents for easy search and retrieval.
Automate document capture and classification to reduce input errors that slow down audits
Support—with the help of security controls—that auditors are viewing authentic and reliable information.
Facilitate ease of access for all stakeholders, including auditors.
Support consistent implementation of regulatory compliance requirements by automating records management and enforcing best practices for secure access.
5. Increase Process Visibility and Oversight
Visibility and oversight of processes are essential to keep AP running efficiently, but sometimes this can be a challenge without the right tools. This is where digital document management comes in. With a solution that can keep track of documents, where they go and the status, it’s never been easier to review and approve documents with the appropriate oversight.
In addition, digital document management solutions can gather data on workflows and how documents are being processed with reporting and analytics dashboards. See the whole process history of a document at a glance, including who approved it, when and how long the approval took. This gives AP staff insight into process bottlenecks, along with theability to identify inefficiencies and hidden opportunities for improvement.
6. Leverage AP Staff Resources on Higher–Value Activities
Knowledge gained from increased process visibility goes beyond identifying staff needs. It’s a tool your AP staff can use for forecasting, analysis and reporting. With this data, they can make more informed and strategic decisions as they manage cash flow and allocate resources.
With the right digital document management solution, AP staff can spend more time on strategic initiatives in addition to expanding, maintaining, and enhancing relationships with vendors and cross-functional lines of business.
Want to learn more about the strategic advantages that can be gained by implementing an AP automation solution? Check out this infographic and see how process automation can help your organization gain a strategic advantage and tackle the challenges of invoice processing.
