Know How to Establish a Record Retention Schedule

It is no surprise that every business creates mass quantities of business records every day. Depending on the industry, these records are either filed in a specific location (patient’s record), or a broader location (paid vs. unpaid). In order to keep the continually growing piles of records organized, it is essential for a business to have a record retention schedule in place. This schedule should be easy to follow, and customized to each organization’s needs and industries standards (such as HIPPA).

More often than not, it is easier to implement an organizational system than it is to develop a schedule for destroying records that are no longer needed. A retention schedule will determine the length of time that is required to retain business records based on the concept that all information has a life cycle, which is the time from creation to the final disposal of the information.

Records document an organization’s daily business operations, and serve as an important function of effectively managing a business. Nowadays, the ability to properly and consistently retain business records is especially important, as more and more records are being created and stored in electronic formats.

Each organization should make a schedule based on the content and purpose of the records. Retention schedules should be determined by these four requirements:

1. Legal and regulatory: there are laws that have been put in place, by federal, state, local, and even international lawmakers that have placed mandates on keeping records or information for specific amounts of time. To be in compliance with all of these laws, it is recommended that an organization conduct legal research and meet with an attorney to determine all the requirements for their business and industry. Failure to comply with the legal requirements for document retention, could result in expensive fines and the loss of legal rights.
2. Fiscal: any documents that contain tax or financial values must be retained to ensure the timely payment of obligations and the proper receipt of receivables. These documents are also used in supporting an organization’s financial audits and tax returns.
3. Operational: once the above criteria have been met and established, the organization must then determine the time line for how long records need to be kept to satisfy their own unique business needs. This decision is generally made by the individual within the organization that is most knowledgeable about the operational value of each record type that the organization has.
4. Historical: any records or documents that depict the history of an organization need to be kept for the life span of the organization. These documents often include: articles of incorporation, bylaws, charters, board of directors’ minutes, and any other documents that helped to establish the organization. These documents are generally a small percentage of the overall documents that an organization has.

After an organization has established the necessary requirements for maintaining records for their business, it is then necessary for a risk assessment to be conducted. A risk assessment will help to determine the appropriate retention period necessary for each type of document. Those who are responsible for making these decisions must be aware that the presence or absence of documents can be both helpful and harmful to an organization. To minimize risk and cost associated with keeping and maintaining records, it is important to destroy records as soon as their retention period expires.
Therefore, it is imperative that your organization has a record retention schedule in place and is familiar with what it entails. Protect your business by knowing what is required for keeping records, what you can destroy and when, and what records must be kept long-term.
At IRCH we have held consultations for numerous businesses, of varying sizes and industries, and helped them to establish a record retention plan that meets their needs. Contact us today to learn how we can help your organization establish a plan for keeping and storing records.