Business Record Retention Times

business records retention and document management servicesA business record retention program can help businesses decide which documents to preserve and for how long and outline procedures for disposing of them. The purpose of these programs is to maintain an organized system that supports the operational needs of your business and ensures compliance with legal requirements. 

This program can help you identify, retain, and destroy documents within a systematic review cycle. It is important for businesses working to manage and improve their efficiency. 

  • Legal Protection: In litigation, having a systematic record retention and destruction policy can provide protection. In court cases, the court will often view the existence of a structured program more favorably, especially if it demonstrates document destruction that was legally justified and reasonable.
  • Regulatory Compliance: Many federal, state, and local laws require retaining certain business records for specific periods. A well-defined program will ensure that your business meets these legal requirements and can help you avoid potential fines or penalties.
  • Operational Integrity: A business record retention program can help prevent the loss of important records and ensure you have critical information when needed. This program can also support you in everyday business operations and decision-making concerns.

What Concerns Should You Weigh When Keeping a Document? 

It’s important to consider how long you should keep a document, how to store your document, and how to dispose of it when the time comes. A business record retention program can help you organize all of these concerns within a simple system as long as you follow these four principles: 

  • Legal Requirements: Make sure to identify if there are any legal mandates in retaining the document, such as documents required for tax purposes or regulatory concerns. If there is a legal requirement for keeping the document, it should be kept until it’s no longer applicable. If you are a healthcare provider that deals with patient medical records and protected health information (PHI), it’s important that you also keep specific medical retention laws laid out by the Health Insurance Portability and Accountability Act (HIPAA) in mind.
  • Document Lifespan and Utility: Learn about the lifespan of your documents and whether or not they could be useful in the future. Considering future legal or investigative scenarios, such as identity theft or an accident, try to imagine what use the documents could provide after their initial purpose has been served. By doing so, you’ll be able to determine better how these documents can be stored, sorted, and discarded.
  • Accessibility and Reproduction: Determine if the document can be reproduced or accessed from other sources, including digital files or hard drives. If you can better access these documents in digital rather than physical formats, it may be more beneficial to keep the document for reference.
  • Consequences of Loss: If the document gets lost, what are the implications of not being able to produce it? Considering these implications can help determine whether you would need to secure the document in better formats or in cases of legal proceedings or audits.

What Types of Documents Should You Keep For Your Program? 

Corporate Records

For any business, it’s essential to maintain certain corporate records to ensure compliance with specific records. By keeping these records updated and in a safe place, your business can avoid costly penalties and legal action. Also, having accurate records can help you keep track of your finances and make informed decisions about your business’s future. 

  • Articles of Incorporation, Bylaws, Capital Stock and Bond Records, Contracts (Government, Partnership, Employment), Legal Correspondence, Minutes: Permanent

Personnel Records

Managing personal records effectively is important for human resources compliance and workforce management. Key documents such as personal accident reports, attendance records, and COBRA records have specific retention periods, and storing these records for the right duration can help defend against potential legal claims, conduct audits, and manage employee information in a systematic manner. 

  • Accident Report/Injury Claim: 11 years
  • Attendance Records: 4 years
  • COBRA Records: 3 years
  • Employee Benefit Plans: 2 years (post-termination)
  • I-9 Forms: 1 year (post-termination)
  • Medical and Exposure Records (related to toxic substances): 40 years
  • OSHA Training Documentation, OSHA Logs: 3 years, six years
  • Patents, Personnel Files: Permanent, six years (post-termination)

Financial Records

Business Record Retention TimesFinancial documents are the backbone of any company, and retaining these records is just as important. Certain documents, such as annual financial statements, general ledgers, and payroll records, tend to have ongoing value for reference, audit purposes, and long-term financial analysis. Reviewing these documents through your program can help you maintain accuracy in your financial reports and support you in strategic financial planning. 

  • Auditors’ Reports, Financial Statements (Annual), General Ledger: Permanent
  • Bank Debt Deduction, Worthless Securities: 7 years
  • Bank Deposit Slips, Reconciliations, Statements, Bills of Lading, Budgets, Checks (Canceled), Contracts (Purchase and Sales), Credit Memos, Depreciation Records, Employee Expense Reports, Employee Payroll Records, Financial Statements (Interim), Freight Bills, Internal Reports, Inventory Lists, Invoices, Payroll Journal, Petty Cash Vouchers, Subsidiary Ledgers (Accounts Receivable, Accounts Payable, etc.), Time Cards and Daily Time Reports: 4 years

Invention and Copyright Records

Intellectual property records such as patents, copyrights, and trademarks protect your company’s innovations and creative works. These records should be kept permanently to ensure ongoing rights and enforcement against potential infringements. Properly documenting these files can support legal claims and facilitate the commercialization of your intellectual property. 

  • Patents, Copyrights, Trademarks, Servicemarks: Permanent

Insurance Records

Insurance records and documents provide a coverage and claims history for your business. These records should be retained for periods between 4 to 6 years, depending on the type of record. Keeping these documents available can help in future claims processing, risk management, and compliance with safety regulations. 

  • Accident Reports, Fire Inspection Reports, Group Disability Records, Insurance Policies, Safety Records, Settled Insurance Claims: 6 years (post-event), four years (post-settlement)

Real Estate Records

Real estate documents, such as deeds, mortgages, and contracts, are vital for establishing ownership and handling disputes. Retaining these contracts for the proper time can help ensure that these documents are accessible for legal reviews, property management, and financial assessments related to real estate holdings. 

  • Mortgages, Contracts: 6 years
  • Deeds: Permanent

Pension/Profit Sharing Records

Documents related to pension and profit-sharing plans are retained permanently to comply with regulatory requirements and manage beneficiary entitlements. These records support the administration of retirement benefits, aid in regulatory audits, and ensure employee commitments are met. Updating and securely storing these documents can help protect the interests of your stakeholders involved in pension and profit-sharing business agreements. 

  • Actuarial Reports, Associated Ledgers and Journals, Financial Statements, IRS Approval Letter, Plan and Trust Agreement: Permanent

How To Implement Your Record Retention Program 

Implementing an effective records retention program means understanding how important each document type is and the appropriate duration for its retention. Once you gather your documents, you can effectively structure and push out a retention strategy that meets your legal requirements and supports your business. Here are some of the steps needed to get your record retention program in operation: 

  • Develop Guidelines: Establish clear rules for how long each document type should be retained based on legal requirements and business needs. These guidelines can be placed in an employee handbook for reference, and you should work to cover the details of this program yearly to ensure that you’re complying with those guidelines. 
  • Involve Legal Counsel: If you struggle to develop the program, one of the best resources for this is to have your program reviewed by legal experts so they can ensure compliance with all relevant laws. 
  • Communicate Policies: After developing the guidelines, distribute those policies to all of your employees through handbooks, training sessions, and other meetings as needed so everyone in your company or team knows how to handle sensitive documents. 
  • Regular Updates: Review and update the retention schedule and policies as necessary to adapt to new legal requirements or business changes. By providing these regular updates, you can ensure that your business maintains itself with effective document management solutions. 

Developing Your Guidelines For a Record Retention Program

Creating detailed guidelines for your record retention program makes managing your business documents all the easier, and if you’re struggling to develop these guidelines effectively, here are some steps you can take the ensure that the process is easier for you and your business:

  • Identify Record Types: Begin by identifying all types of documents that your business creates and receives. This includes everything from internal emails and financial statements to employee records and contracts. Gathering these documents can help you tailor your retention policy better. 
  • Research Legal Requirements: Research federal, state, and local laws related to your business records. Different types of records have different legal retention requirements, so gathering that information can help protect your business in legal ramifications. 
  • Determine Your Business’s Needs: Some documents, while not required legally for long-term retention, may be valuable for business analyses, future strategic decisions, or corporate memory. When considering the needs of your business, try to decide which documents will hold value beyond their immediate use to retain them later on. 
  • Establish Retention Periods: Establish a clear retention period for each type of document. The period should comply with the longest applicable legal requirement and consider practical business needs.
  • Plan For Secure Storage and Access: Decide how and where different records will be stored, whether in digital format, physical files, or both. When storing these documents, ensure they are accessible to authorized personnel and that your storage solution can be preserved without degradation over time. 
  • Define Destruction Procedures: Lastly, outline procedures for disposing and shredding documents once their retention period expires. For physical documents, this may involve shredding or incineration. Secure deletion methods should ensure that data cannot be reconstructed or retrieved for digital files. 

Get Free Quotes on Document Management Today!

Managing your business records with a records retention program can help ensure your business can handle documents responsibly and avoid potential pitfalls. If you need assistance setting up or managing your document retention strategy, then Shred Nations can help. They offer ways to help you find the right contractor for your document management regardless of how much information you need to store 

To optimize your document management, you can fill out their online form or call them at (800) 747-3365.