4 Types of Business Records That Aren't Digital Debris
Management and IT Departments in businesses are concerned with digital debris. Outdated information and duplicate files clog storage memory and slow retrieval processes. Many companies are delegating digital housekeeping chores to various departments. Prior to tidying up files and dumping digital information, companies should train employees on the types of information to be retained. Businesses should not consider the following four types of records digital debris.
- Accounting Records: Financial statements, general ledgers, check registers, cash books, asset inventory, journal entries, charts of accounts, asset depreciation schedules and trial balance sheets should be saved indefinitely. Tax returns should be stored permanently. The best rule is to save supporting tax documentation for seven years in case of an audit. Certain accounting records should be retained for seven years such as bank reconciliation worksheets, payable and receivable ledgers, charge slips, bank statements and cash vouchers. Records should be maintained for seven years after the sale of real estate or stock.
- Business Records: Records relating to corporate structure should be retained ad infinitum. These records include stock ownership, articles of incorporation, bylaws, capital-stock certificates, annual reports and dividend registers. A copy of insurance policies and canceled leases should be retained for 10 years past the date of expiration. Contracts, deeds, titles, mortgages, stocks, bonds, permits, licenses and bills of sale should be kept indefinitely.
- Email: Email retention does not have a simple answer. Email retention demands vary greatly per area of focus; therefore, each business should create a policy concerning email retention. Legal, Human Resources, IT and Accounting Departments should all have input into an email retention policy. An enforced automated solution for retaining emails according to company policy will assure businesses less legal headaches. During litigation, businesses have often received discovery requests for email communications. Relevant emails pertaining to a legal hold request should be preserved.
- Employee Records: Maintain all current employee records. Some records for terminated employee records may be dumped after seven years. The exception includes W-2 forms, records pertaining to retirement plan and payroll tax returns, which should be kept permanently. In addition, payroll records, withholding exemptions and worker’s compensation benefits must be stored for a minimum of 10 years.
*Photo courtesy of Nuove Archiviazioni File by Simoncina21 at Flickr’s Creative Commons.