When it comes to document retention, your organization can’t afford to let employees make judgment calls. Record retention schedules set clear expectations. Everyone on staff can look at a document and know whether it can be shredded right away or should be kept in the records. Following a good record retention schedule should keep your lawyers and accounting folks happy, too. It’s a pretty simple document to create and there’s really no downside to having one.
WHY ARE RECORD RETENTION SCHEDULES IMPORTANT?
There are a lot of benefits to standardizing your organization’s approach to document retention, including:
- Compliance and limiting data breach liability. The number one reason to maintain a record retention schedule is to make sure you don’t prematurely get rid of any documents that you might need later on. The IRS and other agencies require employers to comply with record retention timelines for certain documents like payroll and tax records. Employers may not have retention requirements for other types of records, like personnel files and correspondence with customers, but they could be important for internal purposes. Retaining certain records might also have future value if you’re audited, or if a prospective buyer is evaluating the business.
Following a record retention schedule ensures you don’t let go of important documents too soon. At the same time, it gives you permission to purge records once you’re no longer legally required to keep them. There’s no point in using your resources to safeguard sensitive information that you don’t even need.
- Employees come and go. Record retention schedules spell out clear standards for whoever is on the current staff. No organization should rely on employees’ institutional knowledge when it comes to matters of data security. Policies must be recorded and standardized.
- Record retention schedules save time when you’re doing annual office clean-outs or reorganizing your files. Anyone weeding out old records can pull the right ones quickly using dates rather than having to study each document to make a decision. Efficiency of storage is another benefit. Routinely clearing out records you no longer need streamlines your physical and digital filing systems.
RECORD RETENTION SCHEDULES: FAQs
We’re a small business; do we really need a record retention schedule?
Yes. No matter what kind of work your organization does, you’re guaranteed to have private information in your records. Even a one-person business should have a record retention schedule.
Who should be involved in creating record retention schedules?
If you’re creating your retention schedule from scratch, it’s always a good idea to consult your attorneys, HR, accounting or bookkeeping team, and top managers for their input. Most organizations can use a fairly boilerplate retention schedule. But, your business may have specific compliance requirements or keep specific types of records that need to be addressed on your schedule. You may also want to hold onto certain internal records for research or archival purposes. Consulting legal advisors and trusted members of your team helps avoid any oversights.
How do we train employees?
A record retention schedule is typically included as part of an organization’s data security/data destruction policy. New employees should receive a copy of the data security policy and data retention schedule before beginning work.
What does a good record retention schedule look like?
The most user-friendly way to structure the schedule is as a simple table with document types listed alphabetically. Every document on the schedule should be labeled with either a number of years it should be kept, or the word “permanently.” Things like legal documents and ownership records should typically be kept permanently. Tax and banking records should typically be kept for seven years, while payroll records and sales records may typically be discarded after three years.
There are many sample record retention schedules available online to use as a template. Again, consult your lawyer and internal teams to finalize your organization’s specific record retention schedule.
What else should we include in a record retention schedule?
There are at least two more key topics to address somewhere in the document.
- First, direction about what employees should do if they have questions about record retention.
- Second, information on the proper way to dispose of records when they safe to get rid of. Paper records should be placed in locked collection bins for secure document shredding. Digital records can be wiped or overwritten, following your own internal IT policies. When disposing of hard drives or other data-storing devices, those devices should also be collected in locked bins until they can be shredded.
Record Retention Schedules Are a Crucial Part of Data Security
Northeast Data Destruction handles all the heavy lifting of secure document disposal. Your organization can maintain its own record retention schedule and train employees to follow it, and we’ll take care of the rest. Contact us today.