Page 198 - Accounting Best Practices

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10–3 Archive Computer Files
10–2 ARCHIVE CANCELED CHECKS ON CD-ROM 187
The filing and retrieval of canceled checks is a continuing problem for the account-
ing department. Typically, the canceled checks for one month are wrapped up,
tagged with the date, and stored in a box that contains all of the checks for a given
year. This works well, unless someone wants to find a check. Then a staff person
must make a guess as to the month in which the check cleared, root through the
storage box to find the checks that were canceled in that month, open the packet,
and find the check. It may take several tries to even find the correct bundle of
checks, since the date on which a check was printed and the date it was canceled
may be several months apart, depending on the travels of the check in the interim.
After the check has been found, the entire process shifts into reverse in order to re-
store all of the checks. After several such check retrievals, one can expect the qual-
ity of the check filing system to have been downgraded considerably. Several
national banks have surmounted this problem by digitizing the checks.
The new approach is to scan the front and back of every check, digitize the
images, and then store them on a CD-ROM, which is issued on a periodic basis to
the company that cut the checks. Best of all, the CD-ROM comes with an index,
so that one can retrieve checks based on the dollar amount, a range of amounts,
the paid date, issue date, or check number. Given so many search criteria, it is
quite difficult not to find a check copy, and to do so in a matter of moments. Also,
there are no longer any check hard copies left on the premises, so storage issues
are reduced. The only troubles with this best practice are that it is offered by only
a few banks, and that an extra fee is charged for the service.

Cost: Installation time:

10–3 ARCHIVE COMPUTER FILES
Some companies have elected to use computer records as a direct replacement for
their paper documents (see the group of best practices shown later in Exhibit
10.4). When this happens, they have certainly eliminated the majority (if not all)
of their filing work, but they have also put themselves at risk of losing electronic
documents if they are not archiving computer records. In a typical organization,
all records are purged from the computer system after one or two years, usually
because maintaining a larger on-line database will require an inordinate amount
of expensive storage space. However, purging these records runs counter to the
document-destruction policies noted later in the section, ‘‘Adopt a Document-
Destruction Policy,” in which nearly all documents must be retained for longer
than one or two years. Consequently, storing all documents on a computer system
is not legally possible if the system is to be systematically purged of all records
from time to time.