Should It Stay or Should It Go?
Save everything for seven years. That was the popular wisdom once, but retention of company records has grown more complicated.
With more regulation and litigation in the air, even privately held firms must pay careful attention to what they keep, how they keep it and when they discard it.
If it goes there will be trouble, and if it stays it will be double. That pop-song dilemma sums up the conundrum faced by businesses, and it’s why they need a clear, thought-out document retention policy (DRP).
First, of course, a DRP ensures that a company meets statutory requirements. Beyond that, solid guidelines help a company limit the material that can be used against it in the event of legal action.
A clear policy also helps a company avoid spending unnecessary resources to save the wrong things (or to save the right things for too long). And companies often find that a retention policy imposes a healthy order, frees up substantial storage space and helps the business itself run smoother.
A DRP can be short, but an effective one will address these issues:
- Identify which records are to be stored, how and for how long. For manufacturers, these will likely include documents related to matters of accounting, taxes, personnel, employment, legal representation, marketing, development, intellectual property, and vendor and customer contracts.
- Define how records will be destroyed when the time comes.
- Cover all media — paper and digital, of course, but also voice-mail messages, Outlook calendars and even data stored in copiers.
- Include procedures for consistent enforcement, and provisions for making exceptions.
For more information about our services to inventory based businesses,
Contact: Mark Walker, Partner, Director of Inventory Based Businesses Practice at 817.882.7724.
The articles in this newsletter are general in nature and are not a substitute for accounting, legal, or other professional services. We assume no liability for the reader's reliance on this information. Before implementing any of the ideas contained in this publication, consult a professional advisor to determine whether they apply to your unique circumstances.