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Should you have a record retention policy for document management?

By now, you’ve probably heard the term ‘record retention policy’ or ‘document retention policy’. But do you have one? Or are you asking if you should have one? From our research, if you have any kind of business, (no matter the size or how many employees you have), you should definitely have a written policy for your document management and record keeping.

Many professions set their own legal guidelines for records retention, and you may have some unusual or extenuating circumstance in your life — so check with your accountant or attorney when creating a written policy for you and your business, as well as before pitching out any important legal, business, or financial paperwork when in doubt.

You might ask, “Why does it need to be written? I have a small business.” The simple fact that there are so many rules and regulations and requirements, from federal employment law, IRS, to state laws for different kinds of records, it is really hard to keep up with what you need to keep and for how long. Some records need to be kept permanently, and some only 3 years. Do you know what they are? It’s virtually impossible to remember, so do yourself a favor and create a written policy for the types of records you create, paper or electronic.

For individuals, it would be a good practice to have a written policy for maintaining record retention as well, because we all need to know what needs to be kept and for how long.

You’ll have a well-thought document to refer to and a methodical plan for maintaining your document management system.  You won’t have to rethink the ‘how long should I keep this file’ every year. You can actually feel good when it’s time for a year-end purge of your files, because you’ll know what can be tossed and when.

You don’t want to get rid of a document, then find out later you need it. On the other hand, if you don’t have to keep documents for legal or tax reasons, and if you don’t have a good reason for keeping it, get rid of it. When in doubt, ask yourself some basic questions about why you might keep the paper file:

  • Is the information relevant to my life, personal interests, or job?
  • Has this information become outdated? Can I find a more current document?
  • How easy would it be to replace this if I needed the information later?
  • What is the worst thing that could happen if I got rid of it?

Just as important, for the documents you need to keep, is knowing how to file it in a way that is organized, but makes it easy to retrieve in a moment when you need it again. The fear of losing something important can cause anxiety. The fear of putting documents in the file cabinet instead of out where you can see it, can also be paralyzing when it comes to filing. The problem with that is there are too many paper files to leave out, and everything gets buried as the stacks grow and you lose it anyway.

None of what you keep will do you any good if you can’t find what you need at the moment you need it. See Customize Your Filing System With Paper Tiger’s Indexing Method for help getting started with an organized system for easy paper file retrieval. You will most likely be able to locate electronic files needed with a search in your email system or on your desktop or in your cloud digital file storage system.

Guide to Creating a Document Retention Policy

There are several things you need to think about when creating a document retention policy. We’ve found a great Guide to Creating a Document Retention Policy (this guide will download to your downloads folder), from the National Federation of Independent Business, in which you will find what a document retention policy is and why you need one, as well as a step-by-step guide to creating your policy, including identifying what types of documents you produce that needs to be maintained, suggested retention timelines, and how documents should be destroyed when time limit has expired.

As stated, “A document retention policy (DRP) provides for the systematic review, retention, and destruction of documents received or created in the course of business. A DRP will identify documents that need to be maintained, contain guidelines for how long certain documents should be kept, and save your company valuable computer and physical storage space. In addition, a well-crafted DRP that is followed by your employees may assist your company in the event of litigation.” This is only a guide, so it is important that you identify the specific federal, state or local document retention provisions that apply specifically to your business and circumstances.

There is also a sample document retention policy from (this document will download to your downloads folder), that you might find helpful.

retention period

Make Sure Employees Know Your Retention Policy

You may have your employees help you create your document retention policy, or you may have assigned the job to a manager. Whether the job of creating and maintaining a records policy is yours personally or someone in your organization, it should be championed and taken seriously when developing. Then when you have a written policy completed and approved, be sure that all employees know what to do with the records they create. Inconsistency of records management and destruction can be portrayed by opposing counsel as selective or arbitrary destruction of documents and can lead to serious legal damage rewards. It is important that all employees understand and be consistent in following the policy.

Employees will need to know:

  • who the responsible manager of ensuring the retention policy is accountable, consistent across departments, and kept up to date for both paper records and digital records, emails, etc. Since retention policies are mainly necessary to reflect the legislative and regulatory requirements, a maintenance plan is important for keeping the policy up to date with changes in the law, as well as remain current with organizational, operational and technological changes in your company.
  • if there is a central location to file certain types of files,
  • when the records should be destroyed, tossed or recycled,
  • what types of documents need to be destroyed, and types that can simply be trashed or recycled,
  • what it means when they are notified to freeze destruction on certain types of files because of litigation,
  • create a system to remind employees when records are eligible to be destroyed, (this could be input in a calendar as an appointment, such as, on date 12/31/2017 “destroy credit card statements (and other records that only need to be kept for 3 years) from 2014.” Or maybe simply a calendar reminder to “check archives for files eligible to be destroyed.”
  • when files are boxed for archiving until the destruction date, make sure to label the box with the contents and the date in which the contents can be destroyed, (examples are shown in the images in this article). Archiving document types with the same destruction date together in one box will make it easier when the time comes.

For more information on record retention and document management, see our blog article:

Document Management – How Long Do I Have To Keep My Paper Files?

document management

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