Just like changing the clocks makes us think about smoke alarm batteries, tax time reminds us of all the stuff we have around!

Saving, protecting, sorting, archiving, and eventually destroying business or personal documents can be a full-time job!

All the paper and electronic documents we deal with today has really become information overload. It clogs computers, spills off desks and out of file cabinets and even piles on the floor!

A document retention plan can be the answer. A simple plan easily guides you to 1) what gets saved – and what doesn’t, 2) where, and 3) for how long. And in our litigious society, saving the right things and destroying outdated, useless stuff is really a survival tool.

Why is this so important?

  • A “lost” document – contract or insurance policy – can be a nightmare … or at least a time-wasting headache.
    • Just what did that agreement say about the timing of payments?
    • If you don’t have an “old” insurance policy you may not be able to get coverage.
  • If your entire email archive – rather than just the recent files – gets subpoenaed in a lawsuit, imagine the cost of lawyers checking everything for what’s relevant. Imagine an inappropriate five-year-old email damaging your reputation.
  • Legally, if you don’t have a plan for destruction, how can you explain documents that you can’t produce for a discovery?

What to do – your next steps

  1. First, ensure you have a reliable electronic back-up system that includes all records and documents. There are daily and instantaneous solutions online.
    • Your information must be accessible if your PC hard drives get stolen or subpoenaed.
    • These files must be encrypted, regardless of where they are.
  2. Then create a list of the types of documents that come in – correspondence, email, publications, paper files, etc. This list will guide you to what goes where, and for how long.
  3. Draft your guidelines for where different things need to go: client files, vendor files, tax, legal, employee files, and other. This must be simple and comprehensive – you don’t want a huge pile of “miscellaneous” with no instructions!
  4. Decide how long things need to be kept. Some guidelines might be:
    • Insurance policies, some contracts, and property asset documents, including business or home remodel costs should all be kept indefinitely.
    • Keep tax returns and documents for 7 years, HR records for 3+ years after termination. Lots of areas have specific rules – get help.
    • Ancient email and instant messages are a black hole that need clear destruction guidelines for purging the unnecessary.
    • Remember there can be legal restrictions on destruction in special areas – tax and related documents, employee files, construction plans and designs in certain cases, etc. Always get advice from your attorney and accountant to be sure.
  5. Schedule regular clean up periods and make sure everyone is following the plan. It’s important that there are no rogue emailers keeping stuff on their own C-drives.
  6. And, of course, stop all destruction if there’s a lawsuit or regulatory investigation.

You can Google “How to develop a document retention policy” for guidance. There are many record management firms with templates, guides, and sample policies to get you started.

And you can email or call Charles (charles@risksmartsolutionis.com | 510-685-3883) with any questions or to discuss your unique situation. He can help – and there’s never a charge for brainstorming.