For a business to run smoothly, it’s crucial to have a document retention policy that dictates the duration for the storage of each record in the workplace. The policy indicates the destruction or retention timeframe for all your confidential and private official documents.

While retaining documents indefinitely can create clutter, destroying them too quickly leads to stress and causes legal complications.

Therefore, an efficient document retention policy is essential for implementing a uniform rule in the company for how long a record should be kept in the organization.

Which Records Should Be Retained?

Whether you’re a small company, a medical facility, a private organization, or an educational institute, document retention is essential in all sectors.

However, the records you store will differ, depending on the service you provide and documents that are common in your particular organizations.

Generally, a document retention policy should cover the storage of the following records:

• Electronic communications
• Client correspondence
• Spreadsheets
• Documents
• Employee records
• Contracts
• Invoices, billing, and sales information
• Healthcare information of patients
• Student data (educational institutions)
• Customer records

A well-crafted document retention policy should establish the retention period for all kinds of data. The duration for retaining a document depends on its importance and long-term impact in the organizational setting.

Follow-up on documents and management thereof and alot more in the ultimate guide.

Reasons for Having a Document Retention Policy

Having a good document retention policy can protect your organization from legal problems, stress, and discovery costs. Here are some of the reasons your company needs a document retention policy.

1. Cost-effective

A record retention policy can save you a lot of money in many ways. For one, destroying unnecessary records and data will save the money that you’d otherwise have to spend on its storage.

Additionally, retaining important data helps prevent excessive expenditure in the future in case you have to look for a file for legal or organizational reasons.

Instead of having to prepare that document again or go through the tedious – and usually costly – process, you can simply pull out the information from your records.

2. Supports Decision-Making

Retaining documents also helps in efficient decision-making, especially when older records have to be used to make new policies and plans.

For instance, if you’re tweaking your public relation policy or marketing tactics, you’d need information, such as customer insights from the previous year.

3. Compliance

As a company, you’d be required to retain certain legal and official documents. Failure to comply with these regulations could lead to penalties.

Therefore, you must create a document retention policy with help from your legal team. Ensure that you don’t destroy legal records that must be retained for a certain period under federal laws.

Besides mitigating the risk of legal repercussions, retaining important documents is also vital for preventing supplier disputes and customer complaints.

Moreover, tax, local, and federal authorities might need certain records for audit, and the inability to provide these documents can be problematic for your organization. Work with a legal team to determine which important records need to be retained and for how long.

If you’re a non-profit organization or get funds from the government, you may have to adhere to additional regulations.

4. Access Control

Not everyone in the organization should have access to all records. Certain laws, like the Health Insurance Portability and Accountability Act, determine who can access specific information in a medical workplace and how they can use it.

In most cases, the information is only available when it is needed. If you organize the records under a retention policy, it will be easier to dictate which departments or employees have access to the data.

5. Protection of Documents

Even today, most companies simply shove their records in large baskets and stack them on top of each other in the spare room. That’s exactly the kind of attitude an effective retention policy will eliminate.

Make sure that your policy covers both physical and electronic data. While paper-based documents can be destroyed due to human error or natural disasters, electronic records are also prone to be lost if not regularly updated.

A document retention policy that covers backup plans and weather-proof storage of documents will prevent these mishaps.

6. Easy to Locate

If all your records are sitting in a room, it will be difficult to locate the exact document you need for a lawsuit, customer demand, or client discussion.

On the contrary, a document retention policy will help organize the records according to certain parameters. You can arrange them based on importance, medium (electronic or physical), sector (client, customers, investors), or date.

Doing so will make it easier for you to locate a record when required.

7. Decluttering

Most companies believe that a retention policy only extends to the storage of important records. Actually, it also includes the elimination of unnecessary documentation that is no longer needed for the upkeep of the organization.

Removing the unrequired records help declutter the storage room while making extra space for other important things. Plus, it’s easier to look for a specific document if the records are stored properly.

If you lack on-site room for storage and don’t want to rent an external space, you can opt for a digital document management system. Sharepoint is an excellent option since it’s reliable, offers large storage, has advanced searching features, and is customizable.

For a more comprehensive system, choose a company like Ungoti that offers comprehensive business digitalization solutions. Some of our services include document management, enterprise collaboration, process automation, and digital workplace creation.

Necessities In a Document Retention Policy

Although a professional can help you better with the creation of a retention policy, a standard template enables you to get started. Here are the records you must include in your policy.

• Must Keep: These are the files that you must always have in the organization for legal or business reasons. For instance, they include contracts, documents related to a lawsuit, and supplier correspondence.
• Want to Keep: These records are retained because of the administrative and business value they bring to the organization. Although they don’t serve a legal purpose, you might need them for decision-making and reviewing past performance.
• Destroy: Finally, if you don’t need a certain file or document, it should be destroyed. Set guidelines to determine when a record is eligible for destruction and who can authorize its deletion.

Conclusion

To wrap up, it’s evident that a document retention policy is integral for ensuring smooth workflow and avoiding legal risks. Besides establishing what should be retained, it also serves as a guide for companies to know when it’s time to get rid of a document.

Therefore, you should curate a document retention policy immediately for the multiple reasons discussed above.