Do you really need a records retention schedule? Most people who own a business look upon this idea as something that they know would be a  good thing for them, but simply cannot bring themselves up to do it. It falls under the I’ll do it later when I have time category as we all know.

Still, it shouldn’t be like that because not only can the process be easier than you ever thought but it also has a lot of benefits. Curious to see what those are? Keep on reading.

What You Might Need a Records Retention Schedule

Any records retention schedule begins and stands for a records management program. This one is as simple to explain as a walk in the park. In order for your organization to function at its best, all your records must be organized, secure, as well as readily available at any time. Accessibility is a must, in the case of litigious actions or if you get audited. Security must also be a priority for you, seeing as your company could not possibly operate if its documents were in peril of falling into the wrong hands or made public.

Apart from all this, implementing a records management program will enable you in increasing efficiency, minimizing the costs, and, as noted above, reducing the risks. Every good and fruitful records management program out there begins with the right records retention schedule.

What Is a Records Retention Schedule?

First of all, records retention is a process through which one can determine just how long a company needs to hold on to its records. The method of determining the amount of time required is based on regulatory and legal requirements, as well as on business needs.

As a consequence, a retention schedule is built. It will regulate and specify how long to keep the records and where. Seeing as the files themselves have quite a long lifespan they go through many phases. A schedule has to be put in place so that you know exactly how long to keep each file and record in each step and when. It will also help you decide when to archive it and when to destroy it.

What Are the Benefits of a Records Retention Schedule?

If you have managed to outline a records retention schedule that is also compliant from a legal point of view, you will be able to enjoy the following benefits.

  • Improved accessibility to all your documents, contracts, and files in general. In other words, you will know exactly where everything is, at any given moment.
  • It minimizes the risk of you losing or misplacing documents. In the same way, it protects them, so that no third party has access to them.
  • A records retention schedule will also reduce the volume of documents, be they hard copy or in digital format. Once you start cleaning up your closet so to say, you can start discarding old files which are no longer relevant to you or your business. In this way, you will have a lot more space and it will become a lot easier to manage them all.
  • By implementing this schedule, you can reduce the costs of storage by up to one third. While you create and store new files, you also get to delete old ones. Therefore, there’s no need to buy more storage and spend more money.
  • When you have such a process in place, it will help you prove that you had a reason for discarding all the documents that you deleted. It was not an arbitrary decision, nor do you have a concealed reason. In the same way, you were not trying to hide unfavorable evidence about you or your company.
    This will help you greatly in the event of becoming subject to criminal or civil proceedings.

How to Build a Full Records Retention Schedule in 8 Steps

Now that you know what it is and why you need to do it, here are some pointers on establishing the full records retentions schedule.

1. Start by Building Yourself a Classification System

Be careful because it needs to be fully functional. There’s no point in creating thousands of folders and subfolders if, in the end, you will just get lost in that labyrinth and no one else will be able to understand the classification system.

2. Review the Applicable Legislation Within All Your Jurisdictions

You need to make sure that you comply with the law, just in case.

3. Factor in the Operational and Organizational Requirements

This way, you can determine the time periods every single class of documents will need.

4. Try to Identify All the Records and Documents in Your Organization

Do not leave out the extremely old or extremely new ones.

5. Here Is What the Retention Period Needs to Include

  • A detailed description of all the records;
  • The retention time for all the documents that you have in the series;
  • What medium you used to store or to record them;
  • The location where you deposited them;
  • When you will dispose of them;
  • How you will dispose of them.

6. You Need to Look for Record Values

These can be the following: legal value, fiscal value, historical and administrative value. Keep in mind that you’re doing this partly for their value, seeing as building a records retention schedule is an action which has legal authority.

7. Consider Some of the Following Criteria

Pay attention to these when you’re trying to determine just how long you should keep your records.

  • The requirements of the law. Is there a law in your state or county which specifies how long you must keep particular documents? Do your research very well in this area.
  • The Statute of limitations.
  • The requirements of the archive.
  • Any requirements that come from the part of staff and organization in general.

8. See Critical Elements

As far as critical elements go, here is what your records retention schedule needs to have.

  • Guidelines and documentations of the entire process. In this way, you ensure that everyone understands it and knows how to retrieve documents.
  • The requirements of records retention.
  • A place to store all the papers and files. If they are in a physical format, you need to find a safe place for them. However, if they are digital, you can always get a server or use the cloud to store them.
  • Record keeping as well as archiving.
  • Destroying of the records
  • The annual review of all the programs.

man calculating

What Are the Risks of Not Having a Records Retention Schedule?

As the volume of the business records which you keep or decide to file expands, so will the risk of not having a records retention schedule. In order to establish exactly how long you need to keep every record, you will need a reliable, organized, and credible policy of conservation. If they notice any kind of inconsistency or irregularity in the way your company organizes and keeps its files without having a retention schedule, then this situation might shatter the good faith any outsiders or third parties have in you.

Simply put, in the absence of such a retention schedule, if you keep any records longer or for a shorter period than you are legally required to, then you open yourself up to risks. Apart from this, the longer you keep the records, the higher their number becomes. And when you have a huge deal of files and documents, it becomes a lot harder to identify and retrieve them when you need them. The main two circumstances which require a quick withdrawal are referencing purposes and showcasing in the event of a compliance matter.

If you do not have a records retention schedule in place, the task of retrieving one document or another becomes a nuisance. In the event of an audit, for example, not being able to retrieve all the documents you need to present to your reviewers might make it look like you are trying to withhold information.

Wrapping Up Tips

  • Review your records retentions schedule periodically. In fact, you should look at this entire policy as a dynamic one. You mustn’t implement it and then forget about it. Review it every 18 to 24 months. In this way, you can determine if any legal changes that occur have any impact on your records. Apart from that, it will allow you to update your retention scheme so as to reflect all the changes in your company. And you know that, if your business goes through changes, so will your records.
  • Think of your records retention schedule as a way of life. Make sure it is packaged and presented to your company as part of its infrastructure. Also, keep in mind that it needs to be accessible. Communicate all its parameters and the program itself as frequently as possible all through your organization.

Final Thoughts

The records retention schedule is important and you need to treat it as such. We hope the above guide has brought you a complete insight on the topic.

Have you began working on a records retention schedule? Share your experience with us!

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