Records Retention — Taming the Paper Beast

Records retention is the elephant in many offices that nobody wants to own and tame. That’s certainly understandable. After all, there’s a lot of confusion about what needs to be kept and for how long. Certainly, the definitive answer on records retention for any particular company or organization must come from its legal counsel. The following are some general guidelines for records retention that give you a place to start in the meantime.

Certain records should be kept forever. These include tax returns; legal, investment and retirement records; patents; licenses and the like. Plan on keeping cancelled checks, dividend checks, payroll checks, sales and purchase records, utilities records and other bills for at least six years. Most job applications and expired insurance policies can be gotten rid of after just three years. Again, it is best to check with your lawyer and/or accountant to know for sure about records retention.

Here’s something else to consider. You can actually hold on to a record too long. In certain instances, you are legally required to destroy a record after a certain period of time. To do otherwise is considered a privacy breach.

A lot of companies hold on to everything forever—a records retention black hole. Maybe yours is one of these organizations. This can be almost as big a problem as keeping too little for too short a time. I doubt that a year from now anyone will need to review the email that discusses the accounting department’s decision to go to Chili’s for lunch last Monday. Yet, some companies will have emails like this on file 5, 10, even 20 years from now. The accountants themselves may be dead, but their email about lunch lives on through eternity. Many emails, certainly the accountants’ back and forth about lunch, should get the boot almost immediately.

The truth is every organization needs a policy about records retention. There needs to be someone in charge of administering the policy and it needs to be something that employees can easily understand and follow. Most important of all, you need a good document management system behind your records retention plan.

A good document management system can be adapted to meet the unique needs of your business and industry. It should be flexible enough for you to set up the categories and criteria you need so you can easily locate documents once they are stored. It should allow records retention across a broad range of media. For example, spreadsheets, pdfs, emails, photos, PowerPoint presentations, Word documents and more must all be able to be included.

Your records retention system must also be secure. You need to be able to give certain people full access and restrict that access from others. You need to have the assurance that come flood, tornado, hurricane, fire—you name it, your records will be secure. The building may be gone, but your records are ready to use, so theoretically you can dig right in amid the rubble.

When you have an effective document management system in place, you will never again be hit with that awful gut-wrenching feeling that comes when you can’t find a critical document. There will be no more hours spent searching through files, tearing your hair out, hoping for a miracle. You’ll be able to instantly put your finger on every item you’ve stored. That’s the best of records retention!

Did you know that not being able to quickly put your fingers on critical documents could actually land you in legal trouble? It’s true. Sometimes a court will give you 24 hours, sometimes they expect you to have it now—and you’d better be able to deliver the goods when they are expected.

Records retention is serious business, but it doesn’t need to keep you awake at night. Tame the beast with a good document management system and sleep easy knowing you’ll be prepared whatever tomorrow throws your way.