Modern organizations have huge demands for regulatory compliance, which means a huge amount of documentation that your business must generate and manage to show that it is fulfilling those compliance obligations. 

As such, a document management system is crucial for an effective compliance program. This article will review what document management systems should be able to do, common challenges in building a document management system, and how to get started with doing so.

What Is a Compliance Document Management System?

A document management system (DMS) is software that stores, manages, and tracks electronic documents or electronic images of paper documents. These systems are also sometimes known as an “electronic filing cabinet,” harkening back to early days when they began as systems to convert paper documents into digital ones. 

Today, of course, a DMS has many more sophisticated features. Document management systems can capture, distribute, and track documents; and manage channel workflows, output systems, and information retrieval systems.

How Effective Document Management Supports Compliance

Document management systems support compliance in several important ways. For example, they increase data protection, automate procedures to consistency, provide audit trails, and standardize employee workflows. 

Strengthening Data Protection

Perhaps the easiest method to safeguard data is to limit who has access to it. Document management systems can do that. 

For example, a GoogleDoc can be accessed by anybody who receives a link to it. That might be safe in theory, but one incorrect click grants access to everyone on a particular team member’s contact list.

Document management software restricts access to those who should have it. This assures compliance with confidentiality rules such as HIPAA, the GDPR, and other statutes or rules.

Automating Processes

Inconsistency in standard operating procedures (SOPs) can lead to blunders that put your firm out of compliance. An automated document management system eliminates discrepancies by enforcing standard SOPs across departments and organizations.

When your processes are developed and automated with compliance in mind, the likelihood of a single team member violating compliance falls, often sharply.

Providing Auditing Trails

The capacity to audit is critical to the compliance function. Document management systems allow users to sift through files swiftly and efficiently. The DMS will typically record every change made to a document, by whom, and at what time. Auditors can use that level of visibility to trace the evidence they need to form an opinion about the strength of your compliance program. 

Enforcing Workflows

Standardized workflows help to guide employee behavior and keep operations efficient. Document management systems can enforce the workflows you design to maintain that efficiency. 

For example, consider an approval request procedure. Employees might request approval for some action by email, which could lead to conflicting responses from  multiple managers. A DMS can enforce workflows so that approvals go to the first manager first, the second manager second, and so forth.

Common Challenges in Compliance Document Management

Implementing a document management system does have its challenges. We’ve listed some of them below.

  • Misfiling. Critical papers to go misplaced or filed in the wrong location, resulting in irritation and lost time.
  • Lack of organization. Without a clear structure, locating the papers you want might be challenging when you need them.
  • Security risks. Storing sensitive information in physical files or on insecure computers increases your company’s risk of data breaches and theft.
  • Time-consuming procedures. Paper-based document management can be time-consuming, from filing to retrieval.
  • Limited accessibility. If your papers are not digital, they may be challenging to view remotely or share with others.
  • Compliance issues. If your company handles sensitive information or is subject to restrictions, you must verify that your document management methods meet compliance standards.

Best Practices for Managing a Document Repository

A document management system provides workflow capabilities to help your company stay compliant and avoid penalties and litigation.

Ditch Manual Processes

Transform your procedures by no longer relying on paper, unstructured electronic files, or Excel spreadsheets to track and save compliance documents. Business processes that rely on error-prone methods, such as retyping data into a spreadsheet, are dangerous, especially when performed by several people.

Embrace Cloud Automation

Advanced security and disaster recovery planning are critical components of any compliance program. Cloud-based platforms establish defined security and privacy standards and regularly meet them.

These solutions provide cutting-edge document and internet communication encryption, protecting cloud services from cookie hijacking, malware, and other cyber threats.

Cloud-based solutions also offer secure backup by mirroring data in off-site data centers. Moving your DMS to the cloud assures that the company meets compliance standards while lowering the burden on internal IT resources.

Control Access and Permissions

If anyone at all can access and change papers and reports, the situation will likely spiral out of control. A DMS uses a rights-based control structure to control document access and process information.

Rights-based control limits the documents and index data that each user is allowed to save, retrieve, edit, change, and delete, based on that user’s role in the organization. Sensitive data is safeguarded to preserve its authenticity and to prevent unauthorized changes and workarounds.

Manage the Entire Document Lifecycle

Because each document category has its own retention timeline, manual procedures to enforce that timeline can be time-consuming and error-prone. Your organization needs a plan, and a document management system makes its execution easier.

A DMS controls retention schedules by automatically deleting files or emailing a staff person before deleting them. Automation based on your business rules simplifies compliance with Sarbanes-Oxley, HIPAA, GDPR, FINRA, FERPA, and other federal and state standards.

Implement Version Control

Store documents with version control enabled. Look for a document management system with a list view that displays when a document was last modified and who did it. Limiting access to prior versions helps to avoid misunderstanding and unneeded adjustments.

When you send a document for review, you may provide a link to the working version rather than the document itself, so you don’t have to deal with several versions being changed by various team members simultaneously.

Assure Audit Preparedness

Audits can be conducted on government agencies, nonprofit organizations, and other private and public businesses. A compliance audit examines the acts of a company, corporation, or specialized department to see whether its regulations and processes are following corporate policy. Some compliance audits also determine whether a company’s actions align with external standards, such as government or business regulations.

A document management system assures compliance with company policies and practices by generating reports that certify the implementation of an organization’s standard operating procedures. A DMS allows for the speedy assembly of reports and efficient distribution to auditors.

Prioritize Data Privacy Initiatives

Data privacy is becoming increasingly important to all organizations. In addition to the compliance obligations stated by HIPAA, GDPR, the Shield Act, COPPA, and industry-specific legislation, be prepared for new (and perhaps stricter) ones to emerge in the future. Compliance with these rules requires your company to have a comprehensive view of the condition of your data and the means to keep it secure, confidential, and up to date.

A document management system allows you to assure high data integrity and demonstrate that information is complete, correct, and preserved with administrative, physical, and technical protections to prevent it from being inappropriately edited, destroyed, or deleted.

In addition to assuring internal security, the system protects customer and membership information. Electronic procedures can also respond swiftly to changing regulations or new legislation. And centralizing the enforcement of company-wide rules is far more efficient than applying them department by department.

How Do You Establish a Compliant Document Repository for Sensitive Information?

Consider these seven factors to build an effective, and compliance, document repository.

  • Establish and implement written policies, procedures, and codes of conduct. Set a goal to attain and promote consistency among your personnel.
  • Implement program oversight. Assign a team to manage, monitor, and enforce the compliance program. This squad is frequently called your company’s “watchdog.”
  • Offer training and education. Every employee needs training regardless of job title. Employees should get initial training and yearly refresher courses so that they know the company’s compliance procedures.
  • Foster two-way communication. It is vital to communicate with the company’s compliance department and “watchdogs” on time. Communicate inquiries and report non-compliance actions and ethical concerns in the workplace to assure adequate compliance documentation.
  • Monitor and audit. You want your compliance program to succeed. Monitoring the frequency of compliance breaches, perform audits to identify potential weaknesses, and then rectify problems as you find them.

ZenGRC Offers an Integrated Solution Document Management

Document management is one of the most critical components of a successful compliance program, and it is also one of the most effective ways for your company to demonstrate that compliance is taken seriously.

ZenGRC allows you to track, manage, and analyze your documentation and identify and resolve issues. It offers a unified, automated platform that integrates with your current business apps and procedures. It automatically gathers audit trail evidence from all the business apps you use to offer proof to auditors and regulators, so you don’t have to.

ZenGRC integrates all your business systems for continuous risk and compliance monitoring, allowing you to retrieve stored documents instantly through our “Single Source of Truth” repository — no more searching for documentation to verify your compliance efforts.

Schedule a demo to learn how ZenGRC can help you develop your company’s compliance program.