Viewpoints

Manageable Document Retention Plans

Carl Cadregari

Originally Published In:
BIZ ACTIONS E-NEWSLETTER
December 2006
Author: Carl Cadregari

 The cost to respond to litigation and other document retrieval requests are skyrocketing ….
….due to the difficulties companies are encountering in keeping pace with the tremendous growth and sheer volume of data and information, particularly related to email and document systems. These growth rates have a dramatic, rippling effect on the efficiency and effectiveness of all organizations. Companies are coming to the conclusion that documents are assets that need to be managed like any other asset, and are, in fact, living records of the company and its intellectual core.
Issues surrounding document retention are varied and impact departments from IT, to financial management, to legal, and more.  They include:

• Acquiring systems to store the data
  
• Managing huge volumes of data
  
• Risks associated with no document control
  
• Repeatedly backing up duplicate static information
  
• Storing information you don’t need, or shouldn’t have
  
• Restoration in the event of a disaster

Often, the answer to these challenges is to arbitrarily delete all data after some fixed, relatively short period of time. This approach may relieve short-term burdens, but can have significant negative consequences, like implications for regulatory compliance or an inability to manage litigation support.

Your company needs to be in total control of the “document life cycle”. It is critical to have actionable, auditable plans, process and strategies that, even though they may be implemented today, remain flexible and adaptable as the company grows. 
Here are some best practice ideas for setting up a document retention plan:

• Set the goals for process improvement, data archiving, storage management, and document retrieval.
  
• Document where your information is: your existing email, paper and electronic environment, movement and processes.
  
• Develop an “Accountability Inventory” showing responsibility for information location(s).
  
• Determine what emails, spreadsheets, correspondence, financial statements, employee records to keep.
  
• Understand how long to keep each record based on regulations, laws, technical lifespan, standards and expert guidance, then add a year.
  
• Know who gets to look at what and when.
  
• Know how to “Stagger” retention needs based on author or organizational level.

“YOU NEED A DOCUMENT RETENTION STRATEGY IF…..”

• Six figure fines from HIPAA, Sarbanes, FTC314, GLBA, FERPA, FISMA, DMCA scare you
  
• You think you’ll have any litigation in the future
  
• Your company has federal or state regulatory requirements
  
• You want to reduce your Risk of Incarceration rROI™
  
• You’re wasting time searching for files
  
• You have more filing cabinets than employees
  
• You pay someone else to store your paper

It is critical for organizations to have policies, practices and systems in place regarding the retention of documents, electronic communications, and paper.  Doing it now, because you want to will most likely cost significantly less than doing later it because you have to.

Disclaimer: The Bonadio Group provides the information in Viewpoints for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in Viewpoints are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.