Does your small business have a universal records retention system? Records retention — how long to maintain documents and records as well as how to do so — is an overlooked but important part of protecting your business financially, legally, and physically. But how can you create a records retention program that works for your business? Discover a few steps to take. 



1. Analyze Your Records

Any company's records retention program should be universal, or applied the same across all its departments. For this to happen, you first need to determine what records, media, documents, files, and digital material to include. Consult employees across all areas of the business and make a written list. Be as detailed as you need to be.

2. Consult With Professionals

Once you have an idea of all the records you must address, meet with professionals and do research to determine how long to keep each record. Your accountant and attorney should both go over the list of records and provide guidance.

Some categories — such as business tax returns or financial statements — have clear-cut parameters that government agencies provide. But many record retention guidelines are based more on the experience of professionals and possible scenarios wherein those records would be called on. So you may get more than one recommendation and need to decide on the best choice for your business. 

3. Write Down Your Schedule

The creation of any universal business operating procedure relies on everyone being on the same page. This means putting your record retention list in writing and making it available to all employees. Group documents into categories or classes for ease of use. And if you update any retention periods on future guidance, update the master list and redistribute it.

4. Protect and Organize Stored Records

Of course, keeping old records for the required period also means ensuring you can access them when needed.

Analyze how your business keeps old records. How can you improve? Can you use more secure storage for accounting or company records, such as by replacing bankers boxes with locking file cabinets? Can you store things centrally for better security? Could records be better organized? Should you move hardcopy records to a digital format? Is this allowed according to legal or auditing standards? 

Talk with your accountant and attorney about recommendations from their experience and what works for other business clients. 

5. Destroy Records Regularly

Destroying expired records is important for many reasons. First, it reduces wasted physical and virtual space because you only use and pay for what you actually need. Eliminating old physical records also keeps your business clean and removes safety or fire hazards. 

Perhaps more importantly, though, destruction reduces liability. The longer you have records in your possession, the more you risk theft, data breaches, and loss of personal information. And if old records still exist past their expiration dates, they could become part of future financial and business audits or even legal cases.

In general, most methods of destruction are allowable so long as they provide complete destruction. You may opt for cross-cut shredding, document destruction services, degaussing, burning, or physical breakage (for some forms of media). Corresponding digital files must also be completely and permanently deleted.

Are you ready to get started on your record retention system for your small company? No matter what questions you have about this important process, start by meeting with Bliss & Skeen Certified Public Accountants. Our experienced team will work with you to craft the right retention plan and implement it across the business. Call today to make an appointment. We look forward to helping you.