Document storage and destruction is something you take seriously because it is a key component of running a secure and compliant business. But, much like our housework or chores, sometimes the tasks associated with document handling can slip through the cracks or become relegated to the to-do list.
If this scenario sounds familiar, take the same approach as spring cleaning a home and tackle your document handling with a renewed sense of purpose this month. While specific legal retention periods will vary depending on the industry and the document type, we’ve outlined three suggestions to help you get started:
- Identify the paperwork that should never be destroyed. Certain corporate documents and records need to be kept indefinitely such as: certificates of incorporation, corporate charter, constitution and bylaws, minutes of board of directors meetings, deeds and easements, stock certificate/transfer records, retirement and pension records, labor contracts and license, patent, trademark and registration applications. Financial documents that should be saved indefinitely include: income tax reports, annual financial statements, accounting records and income tax payment checks plus all documents relating to fixed assets owned by the company and depreciated over time.
- Determine what can be disposed of immediately. Memos, outdated forms, to-do lists, notes, old sales and marketing materials, etc. can all be discarded immediately, without any retention period. While most of this paperwork is harmless, internal documents that contain customer information or proprietary company information need to be shredded as opposed to being disposed of in garbage or recycling containers. This situation highlights why a “shred-all” policy may make sense because shredding every document eliminates any confusion or subjectivity about what constitutes confidential information.
- Understand your industry’s legal compliance retention periods.
- Six to seven years. Typically, this information will include sales records such as invoices, monthly statements, shipping papers and customers purchase orders. In addition to sales receipts, you need to keep employee records plus all travel records such as expense statements and receipts. Financial records that need to be kept include personnel and payroll records, such as payments and reports to taxing authorities, including federal income tax withholding, FICA contributions, unemployment taxes and worker's compensation insurance as well as all bank reconciliations, voided checks, and check stubs.
- Three years. Examples of financial information include monthly and quarterly financial statements as well as personnel paperwork including employee applications, benefit records, expired insurance policies and general business correspondence.
In addition to identifying what paperwork should be retained for specific periods of time, it is also critical to store these important records in boxes that are well-organized and clearly marked with the contents and dates. The record room should be very secure, with limited employee access because its contents are highly confidential.
If you’ve unsure of what to keep, what to dispose of and specific retention periods, it may make sense to seek a professional consultation by a record-keeping or document destruction service. Not only will a reputable company be able to guide you through what needs to be destroyed or retained, but also they can help you dispose of any unneeded documents securely. You’ll then be able to tackle your document spring cleaning with confidence and enjoy the satisfaction of marking a critical item off this year’s to-do list.