A Guide to Document Retention Policies

File Management

Retention Policies Are a Key Part of Any Data Compliant Business But Where Do You Start?

For businesses to run smoothly, clear document retention policies need to be put in place to dictate how long records are stored – and which ones need to be kept. Deleting documents too soon can lead you to legal troubles. Because whether you’re a small business, a legal firm, or based in finance or insolvency, document retention is essential for all industries. But what is a document retention policy? And what are the recommended document retention periods? Let's talk about best practice document retention and document lifecycles.

What Is a Document Retention Policy?

Document retention policies establish what should be done with particular documents and records at a certain time within a business. Any data that is kept for longer than it needs to be can carry additional risks and potential costs. There are several different versions of document retention policies that you can follow. Here are a few:

  • Automatically deleting files at a pre-arranged date and time
  • Files are automatically moved into a new folder or system
  • Files are copied/sent to someone on a particular day or at a certain time

Document retention policies are designed to aid compliance and ensure data security. As a company, you need to know that any files that are moved, copied or deleted are only visible to those with the right permissions. They save you and your employees the hassle of manually searching through old files and having to choose what to do with each individual document.

Automating your data retention process through a digital Document Management System means that you can automate document lifecycles. This means that you can opt for documents to be automatically destroyed after a specified period of time which saves your administration team a lot of time and aids your data compliance.

Document Retention: Which Files Should Be Kept?

Depending on what sector you are in, the service or product you provide and the documents you work with, the files you need to store will differ. Here are just a few examples of the types of documents you might typically deal with:

  • Business contracts
  • Electronic correspondence
  • Client communications
  • Data spreadsheets
  • Word Documents
  • Employee records; e.g., job applications, CVs and cover letters
  • Finances; e.g., invoices, income statements and billing documents
  • Healthcare records
  • Customer and client records

Accounting records must be kept if they include the following details:

  • All money received and spent by the company
  • Details of any assets owned by the company
  • Details of any debts that the company owes or is owed
  • Records of any stock the company owns at the end of a financial year
  • The stock takings that your business uses to calculate the stock figure
  • All goods bought and sold by the business, including who they were bought from or sold to

The following must also be kept to prepare and file the annual accounts and tax returns:

  • All money spent by the business that year, including receipts and petty cash records
  • All money the company received that year, including invoices and client contracts
  • Any additional records that are relevant to your finances, like bank statements

Company Document Retention Periods

Statutory Requirements for Document Retention Periods

Document Retention Policies

The Importance of Document Retention Policies

  • They make it easier to keep your paperless office organised
  • Document retention policies help to safely dispose of confidential, but no longer relevant files on a frequent basis, ensuring that they remain classified and secure

You can automatically send files into the archive if they are no longer relevant or used frequently –

  • making it much easier to find your current documents
  • Archiving and deleting out-of-date files makes sure your business continues to use new data, rather than focusing on old content

Setting Up Your Document Retention Policies

Before you can manage your document retention periods, it’s important to ensure that all employees are using the same work management system and they are aware of your protocols. You will need to establish rules on how certain files should be handled across the business, as well as how long they are needed.

Initially, hold off from deleting all of your files. Instead, keep them in an archive until you are 100% clear that you won’t need them again – because it’s a lot easier to retrieve archived data than deleted documents.

Are you after an efficient, secure, paperless work management system to handle your documents? Virtual Cabinet provides an agile and adaptable solution for your business – suitable for both big and small businesses and firms. So no matter how many files you have, or what industry you’re based in, our experts can provide tailored advice to help you set and meet your company document retention goals.

Book your free demo today and we’ll answer any questions you may have.

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