Document Retention and Destruction: What Human Resource Professionals Must KnowHR Resource
July 9, 2013 — 2,647 views
Businesses are growing more complex day by day. To ensure that businesses are run smoothly, it is critical that records are maintained and preserved. Although record keeping is centuries old, it is only in current times that it is given a lot of importance as more and more technologies have evolved.
Importance of Document Retention and Destruction
Record retention in the past was a mundane affair. File cabinets stuffed with paper served the purpose best. Today, new forms of information and communication storage as well as data retrieval systems are more prevalent than ever before.
Some of the major accounting firms have had bad publicity in the press for questionable record keeping and handling. Many other companies have shut down operations for the same reason. Records today are subjected to greater monitoring and regulation. However, appropriate record maintenance is necessary not only in the context of law but also from the perspective of efficient business functioning.
The most critical thing to address in context of records is their safe maintenance. Lost records lead to loss in tax advantages, business opportunities, and time. In addition, businesses that do not keep their records safe may face difficulties in situations like hacker attack and fire breakout when recovery may be impossible.
Role of Human Resource Professionals
The key to document retention is the extensive training to human resource professionals in managing, organizing, and retaining key business information and records. The human resource professionals can make the right policies and put them in place for appropriate management of records. However, each and every employee must be guided by these policies with the adequate sense of responsibility towards safe record keeping.
Every organization must have procedures and policies in place for retention and active management of files in addition to management of emails and vital records. Policies and procedures implemented by an organization ensure its seriousness in maintaining a strong system of record keeping.
It is important that the policy addresses records in all formats, irrespective of media type, to include email practices and electronic records in all forms. It is even more important that they are upheld and applied consistently with well-defined roles and responsibilities.
Document Retention and Destruction: The Right Way
Document disposal is as important as its retention. It must be done in a right way. Business must know which records are to be retained and figure out the least time for which they must be retained. The trend is growing towards retaining documents for a longer time than it used to be in the past.
There are some records like corporate governance, minutes, bylaws, and shareholder agreements that must be permanently maintained and their copies must be with the business attorneys. There are other records like leases and agreements that must be kept safe at least until ten years after their expiry. However, intellectual property documents must be retained forever. The same goes for insurance policies since past claims can create issues many years later.
Records like financial statements, payroll records, and tax or non-tax returns should be retained permanently while ledgers, journals, accounting, and financial records could be kept safely for at least 10 years from the time of their creation.