Records management system: Definition and importance

Every day, your company handles physical and digital files, each with its own rules for organization and retention. For example, you may need to store financial documents for seven years, while you can discard emails once they’re no longer useful.

With a clear records management system, you can build a strategy for governing your business records from creation to disposal, deleting them based on compliance requirements. What’s at stake goes beyond content organization — proper management helps build an infrastructure to reduce the risk of legal liabilities while meeting compliance standards.

Key highlights:

• A records management system is a software solution your organization can use to govern the full records lifecycle, from file creation to archival
• Records management software allows you to organize and secure your business data, which helps reduce legal risk and support compliance with industry regulations
• With Box, you can manage your records securely, automate retention schedules, and stay compliant

What is a records management system (RMS)?

A records management system (RMS) is a digital solution designed to coordinate the entire records lifecycle, including creation, categorization, storage, retrieval, and compliant disposal, regardless of file format. These platforms help organize electronic assets and keep them secure thanks to automated retention, document audit trails, and other features.

A records management system is also:

• A component of your organization’s data governance strategy, protecting records for audits or disputes while supporting business continuity
• A critical factor in your digital transformation process, making it easier for team members to find and access the information they need

The most common business records for management

Business records include any piece of content, whether paper documentation or electronic files, related to your legal, financial, or operational activities. Examples of items you can maintain in records management systems include:

• Employee records
• Tax filings
• Workplace safety documentation
• Financial statements
• Audit reports
• Medical and healthcare records
• Personally identifiable information (PII)
• Product development documents

Implementing a records management program involves developing a policy with rules for storage, retrieval, access, and security of all of these kinds of files, along with a retention schedule for their appropriate disposal.

Understanding the records management lifecycle

Let’s walk through the stages of the records management lifecycle.

1. Creation and capture: When you create or receive a new document, asset, or record, the right platform can extract key data using intelligent document processing technologies like AI 
2. Categorization: Automated technology can also categorize documents based on subject, department, file type, and sensitivity levels, facilitating retrieval and simplifying the application of retention policies
3. Storage: A cloud storage solution that balances accessibility with data protection will keep your records organized and secure
4. Access and use: Applying file and folder permissions through records management software will limit who can view, edit, and share documents to only authorized people
5. Retention: This practice preserves business records for a specific amount of time, depending on legal requirements or operational needs — for example, your employee records management process might involve disposing of former staff files after a few years to meet regulatory standards
6. Disposition and archiving: In the final stage, you create guidelines for what happens to records once they reach the end of their retention period, whether that means secure destruction or long-term archival for operational or legal reasons

Understand the three main goals of data lifecycle management.

Why is records management important?

Records management is how you control your most critical data and protect your organization from non-compliance penalties and legal fallout. 

Take a government agency in charge of workplace safety. With government document management, they can sort incident reports by industry and date, making it easier to track repeated incidents linked to the same supplier or location. But without the security controls records management for government provides, they could accidentally delete something that needs to be preserved, putting their credibility and the information itself at risk. 

The same goes for your business. Even if you use a document management system, you should integrate a records management solution to ensure data integrity and protection.

Compare document management vs. records management to understand the differences.

What are the benefits of a records management program?

You can realize many benefits of a records management program, including compliance with industry standards, faster information retrieval, and more efficient business processes — not to mention the cost savings associated with reduced storage use and streamlined workflows.

Let’s explore each benefit of records management in detail.

• Regulatory compliance: Records management systems let you preserve and use relevant documentation whenever you need it, so you can easily pull out an audit log or a report when a regulatory agency makes a request. Best-of-breed platforms have certifications that prove their commitment to data privacy laws and industry standards.
• Faster information retrieval: Gartner shows that 47% of digital workers regularly spend hours looking for files, and when they do, it’s your company that loses productivity. Electronic records management prevents this waste of time by integrating advanced search capabilities that enable instant document retrieval, avoiding frustration.
• Streamlined business processes: Instead of organizing files by hand, consider using a system to standardize procedures for every stage of the records management lifecycle. For example, you can control document retention schedules to comply with sector-specific regulations and use AI to receive alerts of malware or other cyber threats.
• Lower operational costs: With more efficient workflows, the financial benefits of a records management program are hard to ignore. Beyond preventing costly fines for non-compliance, you can also reduce storage use by clearing out files you don’t need and save time by automating tasks like document indexing and tracking.

Why implement a records management program

Here are three reasons why you should invest in a records management program.

1. The purpose of managing records is to protect your business from risks, and using a system makes that easier

Suppose an ex-employee takes legal action for wrongful termination. If your company has access to all internal communications and performance reviews from their first day on the job to their last, it’s easy to make a case for their hiring. Making these files easily available could be vital to your defense, but handling the process manually is time consuming.

Records management solutions enable file storage, retrieval, security, and the eventual elimination of these records at the right time. You can quickly find all necessary documents with a few clicks and track document updates, making your legal team’s life easier.

Other business risks you can mitigate by having a system for managing records:

• Data loss during disruptions: Online backup automatically creates copies of your business documents on secure, cloud-based servers for easy restoring
• Overwriting: Document version control within a records management system saves previous versions, preventing someone, whether accidentally or intentionally, from replacing document records with incorrect or outdated data
• Unauthorized access: A secure system restricts access to sensitive documents through file encryption and user authentication, preventing data breaches and leaks

2. Records management programs help you comply with industry regulations

In a survey by Secoda, 42% of organizations said ensuring data security and compliance is a key governance challenge for 2025. The complexity of business records management lies in handling a massive amount of documents with different sensitivity levels, requiring robust security and compliance measures to maintain regulatory standards.

 A report from Precisely and Drexel University shows that 52% of organizations use cloud technology in their data initiatives. Choosing a cloud-based records management system allows you to: 

• Develop records management guidelines and modify them later to meet new compliance requirements
• Preserve content for litigation by putting folders or users on hold for a set period of time, helping adhere to legal records retention requirements
• Automatically apply records management policies and procedures based on trigger dates to streamline business workflows

Check our cloud data compliance guide and learn strategies to safeguard your content.

3. Using records management solutions facilitates the enforcement of retention schedules

A records retention schedule outlines how long you should keep each type of record before deletion, archival, or transfer. According to AIIM’s 2024 State of the Intelligent Information Management, 64% of information management professionals say they’re somehow involved in retention schedule development, while 35% are extremely involved in this activity, which means you should take this practice seriously.

A comprehensive schedule cuts down time spent searching for records and eliminates the guesswork about deleting old stored files. But without an automated records management system to enforce these schedules, even the best-planned policies can fall short.

Examples of how you can use a platform with records management and retention capabilities:

• Enable admin users to control the records management process permanently, deleting or retaining files when needed
• Adjust your cloud storage capacity to accommodate growing records as needed
• Apply specific records management rules to a single file or a folder
• Integrate your records with other applications to get work done faster
• Automate the way you apply metadata to tag, categorize, and retain your unstructured data

Who is responsible for records management?

While a records manager often leads this process, you should involve everyone, from leaders to team members. Below are the main roles and responsibilities involved in managing records.

• Records manager (or information governance manager): The person who develops and oversees the records management framework, creating all the policies and procedures for recordkeeping
• IT department: The team that sets up electronic records management systems and is responsible for effective data backup and recovery
• Legal and compliance departments: Together, these areas work with the records manager to develop policies, providing guidance on legal holds
• Senior leadership: Managers are responsible for making records management part of broader risk mitigation and data governance efforts, ensuring it stays a priority
• Employees: Each member of your team should know how to create accurate records and follow procedures for proper storage and use

Types of records management systems

The right solution for your company’s records management depends on specific needs. For instance, if you work with a massive volume of physical files, jumping straight to a paperless system might not make the most sense right away.

To help you choose the best platform, we’ve put together the most common records management software examples.

Get the best records management software with Box

With Box, you leverage the power of AI to manage, store, and collaborate securely on your content. Our Intelligent Content Management platform enables you to protect your data across its entire lifecycle and automate workflows with agentic AI to make your business more efficient and productive, all while following compliance requirements. 

If you need hassle-free organization and governance, we’ve got you covered with our document management software. You’ll gain:

• Unlimited storage to preserve your files
• AI-powered features that surface documents and extract the insights you need
• Flexible retention schedules to meet regulatory standards
• Automated disposition management to handle retention and disposal for you

Plus, you can integrate Box with 1,500+ apps to put your business productivity first — accessing and working on your most sensitive documents without compromising security.

Contact us and see the best native capabilities to integrate into your records management system.

*While we maintain our steadfast commitment to offering products and services with best-in-class privacy, security, and compliance, the information provided in this blog post is not intended to constitute legal advice. We strongly encourage prospective and current customers to perform their own due diligence when assessing compliance with applicable laws.