Do We Need a Document Retention Policy?
A document retention policy (DRP), is a policy that informs the way your business maintains, retains, and discards documents. It outlines how long certain documents should be kept, how they should be protected, and the manner in which they should be destroyed once they are no longer needed.
There are a number of reasons why a small business needs a DRP, including protection in the event of legal disputes and litigation, compliance with the law, and improved efficiency.
Whether you are filing a lawsuit, defending against litigation, or simply find yourself in a dispute with another party, having the right documentation on hand will help your position tremendously. Your DRP can help you make sure you maintain pertinent documents that can support your position in a dispute.
In cases where requested documents have already been destroyed, you can still find protection in having a well constructed DRP on file. For example, if the opposing party requests that you furnish a document that you have already destroyed, your DRP can indicate that it was destroyed for reasonable purposes rather than in an attempt to hide crucial information.
In addition to providing protection in legal disputes, your document retention policy also helps you maintain full compliance with numerous federal and state laws. A few of the laws that require certain documents to be retained include:
- Tax laws, since the IRS can audit records up to six years old
- HIPAA, which relates to the privacy and availability of healthcare records
- EPA record-keeping standards
Failure to maintain certain documents for their set timeframes can either constitute a direct violation of these laws or result in complex legal entanglements as you find yourself unable to furnish crucial information.
The final way a DRP helps small businesses is by improving efficiency. Document retention plans help save storage space by making sure outdated documents are destroyed while also allowing employees to quickly retrieve needed information, thereby reducing the number of work hours used searching for papers or filing them away.
Implementing a DRP
There are many tools you can use when implementing and enforcing a document retention policy. Offsite document storage services, such as those provided by Armstrong Archives, can increase business efficiency and help you comply with legal standards and requirements.