Time to review

A document retention policy provides for the review, retention and
destruction of records and documents that a business either receives or
creates in its everyday business activities. A good policy should identify what
documents need to be retained and for
how long as well as when certain documents can or should be destroyed. It is
needed not only for future reference purposes but also to comply with regulatory
requirements under either state or federal laws.

“In the past, BCA (before computer
age) document retention was based on
file capacity, but now capacity is no
longer the overriding issue,” says
Johnny J. Veselka, a shareholder with
Briggs & Veselka Co. “Today, the issue is
how long do we need to keep documents in case we are involved in litigation or our records are subpoenaed by
government regulators or in other court
proceedings.”

Smart Business spoke with Veselka
about document retention and why it’s
so important in today’s business world.

What role does document retention play in
today’s business world?

Document retention is necessary to be
able to refer to and extract data that has
been recorded in the past, in order to
conduct business and also to protect the
business in cases of potential legal
action and to comply with rules and laws
on document retention.

What problems or issues can arise from
document retention?

A lack of a good document retention
policy can result in a lack of efficiency in
business operations and a lack of storage space. You may be exposed to harsh
results in litigation. Destruction of the
wrong information or deleting important
e-mails can have disastrous consequences for your business, as well.

What is the answer for business today?

A good document retention policy not
only states how long certain types of
documents must be kept but also where
they are to be kept and who is responsible for maintaining those records. Today,
it is typical for 80 percent of business
documents to reside on employees’
desktops and laptops. Therefore, all
employees, not just records management people, need knowledge and
understanding of the company’s rules on
document retention. Beyond knowing
how long to keep documents, it’s also
important to know how to properly
destroy documents that have passed
their retention date.

A powerful document retention policy
will allow a company to respond confidently to a court order by saying either,
‘The document exists and here it is,’ or,
‘The document no longer exists, and
here is the date and time it was
destroyed in accordance with our published document retention policy.’

Why are document retention policies so
vital?

Most, if not all, information is now
being stored electronically. So, you must
purge data that is no longer useful
and/or is past its retention period. This
will decrease the need for more storage
capacity and reduce the length of time
necessary to perform backups of company data.

Recent amendments to the Federal
Rules of Civil Procedures have addressed how electronically stored information can be exposed during legal matters. Thus, it’s important that you and
your staff know what, where and how
data is being stored and destroyed.

How can you make sure your document
retention policy is working?

You have to stay on top of your policy
and always follow up on it. Make sure
everyone is following it from the day you
implement it. Don’t loosen up on the policy over time — always ensure it is being
followed to the letter. Also, keep track of
your backup tapes and off-site hard-copy
storage. Tape backups must be included
in the retention policy. This holds true
for those that store hard-copy documents off-site. These documents should
be included in the retention policy, as
well. Finally, make sure your staff, from
top to bottom, is well versed in your document retention policy. The more educated you and your employees are, the
more successful your policy will be.

The rules for how long documents
should be kept can vary by type of business. To learn the document retention
requirements for your business, contact
any of the following: your accountant,
an attorney, or your state or national
trade association, or search online for
time limits.

JOHNNY J. VESELKA is a shareholder of Briggs & Veselka Co. Reach him at (713) 667-9147 or [email protected].