After you’ve completed the inventory of existing files, the next step is to establish user-friendly retention guidelines. Often, offices are glutted with paper and computer files because people using them aren’t given guidelines about what to keep and what to eliminate. Ironically, some organizations do have such guidelines, but they’re not communicated to the people who really need them, or not provided in a user-friendly form. One company I worked with had a guidebook that was nearly a hundred pages long, but poorly organized, and contained information most people didn’t need.
As a general rule, retention guidelines are most useful when organized by department, but it’s helpful to know what other departments keep. For example, in one company I discovered three departments (on the same floor) keeping information about potential meeting sites. This is unnecessary duplication and takes far too much space. In addition to keeping it in three places, they kept the information for several years when in fact, it wouldn’t be wise to make a decision about a meeting space based on old information.
Talk with staff members People who use files regularly are the best source of information when you’re developing retention guidelines. Use the records inventory form discussed previously as a starting point for discussion, and determine how long people actually use the information that is kept. In many cases, employees may not know—which is exactly the reason for going through this process.
Talk with your advisors To further develop your retention guidelines, collect all the information you can from your accountant and general counsel about what information is legally necessary in your company (and see the accompanying box for suggestions). In some cases, your organization may belong to an industry-related association, which might be able to provide additional guidelines. The “Originator’s Rule:” The Universal Retention Guideline It’s essential to keep some information, but unnecessary and undesirable to keep duplicate information. One way to avoid this is to be sure everyone in your office understands and implements, wherever applicable, the “Originator’s Rule: Whoever originates a piece of paper is responsible for its retention!”
Document your record-keeping plan. Once you’ve collected all the available information about records retention from internal and external sources, it’s time to put the information in some sort of user-friendly form for each department by adding the information to your File Index. If your company becomes involved in litigation or an audit, you’ll be in a much better position to protect yourself if you produce evidence of your records-retention program. Having a formal records retention program creates consistency and indicates an honest attempt to retain important information. For example, if you’re audited and you have only some records, you look sloppy at best. At worst, you give the impression that you’re trying to hide something. It’s a good idea to set up and maintain a computer database of the company’s records, including the location of all records and how long they must be kept. This will give you the flexibility to sort the information into various types of lists as needed.
Simplify Paper Management The best way to simplify paper management is (naturally) to not create excess paperwork in the first place. A good resource to assist you in looking at these issues is Cutting Paperwork in the Corporate Culture by Dianna Booher ($16.95 Facts on File; 800-–342–6621).
Here are some guidelines:
• Annual financial statements: Retain indefinitely.
• Monthly financial statements used for internal purposes: Retain for three years.
• Bank reconciliation’s, voided checks, check stubs and check register tapes: Retain for six years.
• Books of account, such as the general ledger and general journal: Retain indefinitely, unless posted regularly to the general ledger. (“Ledgers” refer to the actual books or the magnetic tapes, disks, or other media upon which the ledgers and journals are stored.)
• Subsidiary ledgers: Retain for three years.
• Canceled, payroll and dividend checks: Retain for six years.
• Corporate documents, including certificate of incorporation, corporate charter, constitution and bylaws, deeds and easements, stock, stock transfer and stockholder records, minutes of board of directors’ meeting, retirement and pension records, labor contracts, licenses, patents, trademarks and registration applications: Retain indefinitely.
• Documents substantiating fixed-asset additions, such as the amounts and dates of additions or improvements, detail related to retirements, depreciation policies, and salvage values assigned to assets: Retain indefinitely.
• Income tax, revenue agents’ report, protests, court briefs and appeals: Retain indefinitely.
• Income tax payment checks: Retain indefinitely.
• Personnel and payroll records, such as payments and reports to taxing authorities, including federal income tax withholding, FICA contributions, unemployment taxes and workers’ compensation insurance: Retain for four years.
• Purchase records, including purchase orders, payment vouchers authorizing payment to vendors and vendor invoices: Retain for six years.
• Sales records such as invoices, monthly statements, remittance advisories, shipping papers, bills of lading and customers’ purchase orders: Retain for six years.
• Travel and entertainment records, including account books, diaries and expense statements: Retain for six years.
ฉ Barbara Hemphill is the author of Kiplinger's Taming the Paper Tiger at Work and Taming the Paper Tiger at Home and co-author of Love It or Lose It: Living Clutter-Free Forever. The mission of Hemphill Productivity Institute is to help individuals and organizations create and sustain a productive environment so they can accomplish their work and enjoy their lives. We do this by organizing space, information, and time. We can be reached at 800-427-0237 or at www.ProductiveEnvironment.com
[tags]financial,records,retention[/tags]
