Why Should Your Business Have a Document Retention Policy?
Establishing and implementing a proper record retention schedule is vital for any business that manages confidential and private records. A document retention policy, also known as a record retention schedule, keeps your organization compliant with legal and record-keeping requirements. The policy ensures that employees follow approved requirements consistently and legally, preventing unwanted problems and stress, helping you better serve your company’s bottom line.
WHAT IS A DOCUMENT RETENTION POLICY?
A document retention policy (DRP) or record-keeping policy outlines how your business maintains, retains, and discards documents. The policy serves as your company’s legal authority to retain and purge documents, systematically capturing all records. A well-drafted policy identifies how long documents are kept, protected and outlines how to destroy records when they are no longer needed.
WHAT IS THE PURPOSE OF A DRP?
There are many purposes for using a DRP for businesses, small and large. The policy protects companies in the event of legal disputes and keeps you in compliance with state and federal laws. Failure to comply with privacy laws and destroying records before the end of a required retention period can result in large penalties. You can manage risk by consulting with your company’s legal department or outside legal counsel to ensure company policies comply with current and new regulations.
At the very minimum, you want your company to operate under full compliance with state and federal laws for the destruction of records. Using a document retention policy helps you follow the required regulations for laws such as OSHA, EPA, and IRS tax audits.
If your company is involved in a lawsuit or facing litigation, you need documentation on hand to help your case. A DRP maintains the documents that support your position in a dispute and can help reduce costs during the discovery phase. A DRP can even protect you when requested documents are already destroyed. The policy acts as a paper trail proving that documents were disposed of for reasonable purposes rather than to hide evidence.
WHO NEEDS A RECORDS RETENTION SCHEDULE?
No matter the size, organizations that want to remain legally compliant need a records retention schedule. The more your business expands and retains records, the greater the burden of identifying and locating records becomes. Without a transparent system for managing records, it can be hard to oversee your information and data infrastructure.
THE BENEFITS OF HAVING A DOCUMENT RETENTION POLICY
Without a proper records management program with indexing capabilities, maintaining your documents can be a massive task with devastating associated risks. The successful development of a document retention policy can have the following benefits for your organization:
Did you know that workers spend about 36% of their day looking for data in various files? Developing a records retention plan that weighs the cost of paying workers compared to other storage options can drastically reduce costs.
Another way DRPs can cut down spending is by freeing up space. If you maintain vast amounts of paperwork, having a place to keep, it is always a challenge. A records retention policy securely scans and shreds sensitive corporate records at the end of every retention period. Physical storage expenses, including building leases, maintenance, and electricity, are minimized by limiting the documents you keep on location. Partnering with a trustworthy document management company will provide sound security for your company data. Professionals can assist you in declaring a secure chain of custody for document destruction.
For laws such as the Health Insurance Portability and Accountability Act (HIPAA), there are specific provisions for who may access information and how information is used. A document retention policy allows you to make records available only on a need to know basis.
BEST PRACTICES FOR RETENTION MANAGEMENT
To make a record-keeping policy that is effective, you need consistency in every aspect of retention management. Here are a few ways you can promote better implementation of your policy.
Use a Universal Schedule
Your retention schedule needs to become a universal part of company life for all business units. That includes data stored in both electronic and paper records, including your business mail. When developing your schedule, you should use identifiers to group records into categories that promote consistency and manageability.
Enforce Document Retention Periods
Document retention periods within your retention schedule enforce the legal and operational value of your records. Justification for retention periods should be documented and maintained on file if any legal litigation arises.
Schedule a Destruction Timetable
A records management system calculates the destruction timetable using a combination of the retention schedule and the creation date of records. Do not create specific destruction dates for individual records. Follow timetable dates accordingly to prevent inconsistencies with your policy.
Retention schedules and policies are ever-changing and evolving. You should review your document retention policy every 18-24 months to ensure your policy aligns with new laws, regulations, and company policies.
HOW DO I KNOW IF I’M COMPLIANT?
Suppose you don’t have a records retention schedule implemented already. In that case, chances are you may not be compliant with legal and industry standards. Working with a professional document imaging company can help protect you from legal risks and data breaches while creating additional cost savings.
What You Need to Get Started
If you’re ready to find a specialized and tailored document solution that complies with legislation and protects sensitive information, here’s how you can get started.
Organize your business records into one of three categories:
● Must Keep Records – files that you legally must store for a specific period
● Want to Keep Records – files that hold value to your organization, including administrative notes and marketing materials
● Destroy or Delete Records – files that pose no security threat and are obsolete
Once all your files are organized, contact a document imaging company to streamline your record retention policy development.