Record Retention Is Now A Crucial Managerial Function

Record keeping is one of the most essential activities for any enterprise, be it is a small or a mid level business or a multi-million dollar enterprise. The records are required not only for internal functioning but also for satisfying the various legal requirements of the government. At any point of time, any company, irrespective of its scale, may face litigation owing to the absence of proper records. This is the reason why many business enterprises are taking up records retention as an essential policy.

Use of Electronically Stored Information liberally has necessitated the need of a records retention policy

Nowadays almost all business data are stored electronically owing to the ultra dependence on computers in day-to-day activities. Compared to the manual records the electronic data are far more complicated to manage. As a result in today’s scenario it has become utmost necessary to adopt the modern record management techniques using software solutions provided by the third party for document retention. This helps keep the company equipped with all requisite records and face any legal suits against the company or answer any government queries smoothly. In this backdrop it has become an important management function to have a reliable and sound records retention policy so that the core business activities are carried out unhindered.

The legal requirements of records retention

There are some legal bindings on companies with respect to record keeping. The records retention guidelines lay out the retention timelines for various forms of records. Though the list can be quite extensive, we are listing timelines of a few records here for the benefit of the readers:

Bank Statements 7 years

Corporate Contracts 20 years post termination

Expense Reports 5 years

Sales Invoice 7 years

Tax Returns Lifetime

Petty cash 3 years

Depreciation 7 years after disposal

Check register 10 years

From the above we get to understand that while we need to keep the records in order to be ready to face any legal needs or government requirements, we can and need to dispose off the records after its legally required retention periods.

Master Record Retention Plan

With the increase in the magnitude of the business, the activities have increased phenomenally too and with it huge volume of information need to be fed and stored in the computer. Owing to increased workload, the job of an efficient record management system is now possible only through electronic intervention. Here are some points that the master record retention plan should have:

• Master list of business records along with their retention periods
• List of parties who will be responsible for the retention of the records
• Schedule as well as protocols for destruction of the records after their legally required retention periods expire
• The list of parties who can access the records.
• The locations of the various records.

Proper record retention plan does not end here. It is important to periodically review the plan and make changes and adjustments as deemed necessary. It may also be required to redistribute the managerial functions among the parties involved. The review interval should be at least once in a year.

About The Author

Brielle Lawson is a member of the board of directors for a multinational. Policy formulation and efficiency improvement of organizations has been her forte. She believes records retention is a very important part of growth, and recommends www.irch.com for professionalism.

IRCH provides market-leading products and services enabling customers to reduce costs and risks through implementing legally-defensible records retention and destruction practices.