Put everything you do in writing.
Everyone seems to understand the importance of formal contracts with key suppliers and key volume customers. No one would expect to borrow or loan money without a fistful of paper. Everyone understands purchase orders and shipping documents. Other important parts of the paper trail are often ignored or mishandled. It might be worthwhile to look at some of the areas where businesses put themselves at risk by not using paper (electronic communications can count as paper).
Personnel. Most employers keep some records, but they don’t go far enough. On the day an employee first reports for work (or orientation) he or she should sign a work contract that includes duties and a code of contact. Every violation of that code should receive a written warning, preferably signed by the employee. The absence of these documents will make it four times harder to terminate a bad employee. You should also keep an attendance log, which shows every absence and tardy arrival (that’s what time clocks do). When an employee asks for a day off or a specific vacation period, reply in writing, even if you respond verbally at the time of inquiry. Notify employees in writing of planned store events. The more you write down, the less employee-employer misunderstandings you will have.
Customers. Respond in writing to all customer inquiries. Maintain a customer service log in which you record all customer complaints and planned resolution. Make all delivery schedule changes in writing. Notify regular customers of planned price changes as far in advance as possible. Notify them also of planned changes in delivery procedures or timing.
Suppliers. Back up all verbal requests with written purchase orders. Notify them in writing if you need to pull in or push out request dates. If you plan a promotion around a particular supplier’s products, submit your plan in writing far enough in advance to change your plans if there are any objections. Ensure your supplier understands your plans. Request written concurrence. If you are planning to change suppliers, give the old supplier adequate written notice.
Leave no verbal communications undocumented. What you write down protects you from the bad memory (or intentional misinterpretation) of others. It is hard for anyone to use what you can disprove against you.