What Is a Business Records Retention Program?

business records retention and document management servicesA records retention program provides for the systematic review, retention and destruction of documents received or created in the course of business.

It helps identify documents that need to be maintained and contain guidelines for how long certain documents should be kept and how they should be destroyed.

Why Create a Business Records Retention Program?

A record retention program is important for many reasons. They can protect you in litigation and help ensure compliance with federal and state laws and regulations. Evidence of a clear and consistently enforced records retention program, enacted for valid purposes, will go a long way to convince the court that the destruction of a document was reasonable.

While it is important to clear out clutter, tossing the wrong paper or deleting an important e-mail can also have bad consequences. Not having a document can mean the difference between winning and losing in a lawsuit. If a litigant requests a document that you cannot provide because it has been destroyed, then a judge or jury may be permitted to conclude that the document contained information detrimental to your position.

What Concerns Should Be Weighed?

How long to keep a document, when and how to store the document, and how to dispose of the document, will depend on the type of document. The four principles to balance when creating a records retention program are:

  1. Is there a legal requirement for keeping the document? These include federal, state and local reporting concerning.
  2. After the document is past its useful life, what other purpose could it serve? Could it be used to support or oppose a position in an investigation or litigation?
  3. What is the consequence of not being able to locate the document? If the item was mentioned in a lawsuit, then suddenly destroyed, the presumption will be that the destruction was accomplished deliberately.
  4. Can the item be reliably reproduced elsewhere if needed? Is the information available from the public library, an online source, a database, or company central files?

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.

According to HIPAA guidelines, covered entities are required to retain medical records for six years from the date of its creation or its last use, whichever comes later. Typically state laws will govern the exact period of time providers must keep medical records, however if a state’s retention laws are shorter than HIPAA’s required six, HIPAA retention requirements preempt state laws.

How Do I Implement a Business Records Retention Program?

Once you have created your records retention program you need to communicate it with everyone in your company. The consequences of even one employee not following your program can be the difference between winning and losing a lawsuit or being in violation of privacy laws. Place the guidelines in your employee handbook and cover it every year with any changes.

Get Free, No-Hassle Quotes on Document Management Today!

Shred Nations specializes in helping you find the right contractor for your document management regardless of how much information you need to store.  To get started, fill out the form to the right, or give us a call at (800) 747-3365Within minutes of receiving your request, you will receive quotes from local providers so that you can select the company that fits your project or your office best.

To get you started, here are some basic guidelines for the length to maintain your records. Laws vary by state so you should have your attorney review your program once it is completed.

Business Records

Types of Business Records

Retention Period (Years)

Articles of incorporation Permanent
Bylaws Permanent
Capital stock and bond records Permanent
Contracts and agreements (government construction, partnership, employment, labor, etc.) Permanent
Legal correspondence Permanent
Minutes Permanent

 

Financial Records

Types of Financial Records

Retention Period (Years)

Auditors’ reports

Permanent

Bank debt deduction

7

Bank deposit slips, reconciliations, statements

4

Bills of lading

4

Budgets

2

Checks – cancelled

4

Contracts – purchase and sales

4*

Credit memos

4

Depreciation records

4*

Employee expense reports

4

Employee payroll records (W-2, W-4, annual earnings records, etc.)

6*

Financial statements — annual

Permanent

Financial statements — interim

4

Freight bills

4

Internal reports (Work orders, sales reports, production reports)

4

Inventory lists

4

Invoices – Sales and cash register receipts, merchandise purchases

4

Invoices — purchases (permanent assets)

4*

General ledger

Permanent

General, cash receipts, cash disbursement, and purchase journals.

Permanent

Payroll journal

4

Petty cash vouchers

4

Subsidiary ledgers (accounts receivable, accounts payable, etc.)

6

Time cards and daily time reports

4

Worthless securities

7

 

Personnel Records

Types of Personnel Records

Retention Period (Years)

Personnel Accident Report/Injury Claim 11
Attendance Records 4
COBRA Records 3
Employee Benefit Plans 2*
I-9 Forms 1*
Medical and Exposure Records – related to toxic substances 40
OSHA Training Documentation 3
OSHA Logs 6
Patents Permanent
Personnel files 6*

* Retention periods begin after termination,

 

Inventions and Copyrights

Types of Invention/Copyright Records

Retention Period (Years)

Patents Permanent
Copyrights Permanent
Trademarks Permanent
Servicemarks Permanent

 

Insurance Records

Types of Insurance Records

Retention Period (Years)

Accident reports 6
Fire inspection reports 6
Group disability records 6
Insurance policies 6 *
Safety records 6
Settled insurance claims 4 *
* Retention periods begin after termination, expiration, disposal, etc. of item.

 

Real Estate Records

Types of Real Estate Records

Retention Period (Years)

Mortgages 6 years
Contracts 6 years
Deeds Permanent

 

Pension/Profit Sharing Records

Types of Pension/Profit Sharing Records

Retention Period (Years)

Actuarial reports Permanent
Associated ledgers and journals Permanent
Financial statements Permanent
IRS approval letter Permanent
Plan and trust agreement Permanent