A document or records retention policy provides a formalized process to manage your organization’s physical and electronic records. A policy also ensures your organization complies with state and federal document retention and destruction laws. Should you face a lawsuit or investigation, you can easily reference relevant records to help support your case. Your records retention policy also improves efficiencies, making it easier to locate and share documents as needed. Here we provide a comprehensive overview of document retention policy best practices to protect your data and improve compliance.
How long is your business required to maintain records?
Records retention policies and schedules are influenced by document type and record retention laws by state. Document retention guidelines use storage periods based on one, three or seven years with a category of records that must be retained “forever.” We provide state record-keeping agency links below that can advise on the specifics for your industry. However, to get you started, we’ve categorized document types and listed them based on the years of retention required:
Paper documents tend to reach unmanageable proportions overnight. If it seems your business is overrun with paper and manual processes that slow your team down, now is the time to act. Document conversion relieves your team of outdated manual processes and establishes new protocols that avoid document bottlenecks. Also known as digitization, document conversion creates digital files of your paper records that are searchable using a document management system, or in some cases a simple Windows folder tree.
However, it is not always a straightforward process and often calls for professional assistance. Some possible reasons you may want to leave it to the professionals include:
- Your organization doesn’t have adequate scanning capabilities.
- You have a massive volume of documents that need to be scanned
- Professionals understand the intricacies involved and can create a more streamlined process flow.
- Data validation for indexing and searchability can be complex and you don’t want to make costly mistakes.
This guide provides a clear and comprehensive overview of the document conversion process, how it digitizes your paper documents and the benefits to your business.
What are document conversion services?
Document conversion services organize, scan, save, and tag your paper documents so they can be archived or stored on a cloud-based, secure storage system or in a system you have on the premises. The process includes detailed document tagging that creates searchable digital files, improving efficiencies, facilitating collaboration, eliminating time-consuming manual filing and retrieval tasks. With professional-grade equipment and expertise, document conversion services adhere to strict industry protocols, ensuring your documents remain secure. The result is a completely digitized, fully backed-up database with your records accessible in seconds.
What are the immediate benefits of document conversion services?
Document conversion systems provide a more efficient way to organize, store, and retrieve documents. The immediate benefits include:
- Document access: Your digitized files are retrieved in seconds, saving valuable time using keyword searches and a simplified indexing system.
- Single source of truth: Digitized files provide a single source of truth, empowering teams to improve collaboration. It prevents the circulation of multiple copies and versions of the same document to avoid errors, damage, and loss.
- Secure document sharing: Digital document sharing allows teams to access the same document from anywhere.
- Backups: All digitized files are backed up for immediate access in case of a disaster.
- Security: A secure data management system and cloud storage avoids theft, damage, and loss.
- Reclaim space: Cumbersome files are no longer needed, freeing up more space to create a comfortable, organized work environment.
What are the long-term benefits?
Once your files are digitized, you will continue to see longer-term benefits, including:
- Sustainable storage: Once the initial conversion is complete, you create a sustainable, organized system. New files are scanned, and your document indexing system allows them to be seamlessly added to your data management system.
- Scalable: Unlike papers that require physical space, your new digitized files offer a scalable storage system that never demands more square footage.
- Save money: Over time, potential savings can include a reduction in required office space, no need for offsite storage, and reduced labor costs due to efficiencies in company processes.
- Unlike paper based systems, the converted digital documents can be safely backed up, ensuring critical documents can’t be lost or misfiled.
- Documents are accessible with a few keystrokes and can be made securely available from anywhere.
How do document conversion services work?
The document conversion process uses the following steps:
Step 1: Document Pickup
Document pickup generally includes picking up boxes that have been packed and labeled by the customer, and then creating a manifest of the boxes for tracking and control. Either your team or your service company can complete this step, to ensure:
- Papers are sorted in clearly marked boxes based on the priority of need and the level of sensitivity
- The documents required for day-to-to-day operations during the conversion project are easily identified by the scanning team
It’s also important to confirm with the conversion company how you or your team will be able to access documents when needed, while they are in their possession.
Step 2: The Document Prep and Scanning Process
Once your documents are delivered to the conversion center, the scanning company will go through the documents to ensure they are ready to scan. This includes smoothing out folds and creases, removing staples and paper clips, and identifying damage that might pose a challenge. The scanning technicians follow industry protocols.
Documents are scanned on high-speed scanning equipment and produce high-resolution 300 dpi image files, which are saved in the format you require. The scanning service can recommend the best format to allow easy integration with your document management system.
Step 3: Document Indexing
This is where the service really proves its worth. Once your documents are digitized, they are ready to be indexed. The indexing is based on the system you require, with specific naming protocols and categories. Indexing makes it easy to retrieve documents with a simple search. You can save documents based on several criteria, enabling cross-referencing based on the date, client name, project name, invoice number, etc. You can make things easier by mimicking your current paper file system or take this opportunity to create a more logical, easier-to-use indexing system. Indexing uses “metadata” and keywords that associate names and words with each file based on logical descriptions of the file’s content.
Step 4: Quality Control
A critical step in the process is making sure the new digital files accurately reflect the original documents. Most scanning service companies sample a small percentage of files for quality control, others inspect EVERY image in EVERY file to make sure the document conversion process is completely accurate.
Step 5: Document Disposal
Document disposal is based on industry protocols and confidentiality regulations. In some cases, the documents can be shredded without any special requirements, while other documents might require a paper backup for an allotted time. Many industries have data privacy protection laws, while others require a certificate to prove the document was shredded. Document conversion services adhere to all retention and destruction requirements to ensure you remain 100% compliant.
Should I consult with an expert?
Yes, and the larger the job, the more important it is to consult with an expert. A professional conversion service ensures your project is completely organized. They create a scanning plan and ensure you remain compliant with all industry standards and best practices regarding data storage and privacy laws, both with the currently held documents, but also for documents as they are created in the future. Although you might consider investing in scanning equipment to complete the project in-house, it is a highly time-consuming process. Standard equipment is not designed to handle large volumes.
Document conversion services use high speed scanners and sophisticated software that can convert large quantities of documents very quickly. As a result, you can be up and running with your new system within a few days or weeks, depending on the scope of the project.
There is also the question of quality – conversion services hire technicians who understand how to prepare documents, scan them, and ensure the images are clear and legible. In-house scans might be difficult to read, making the entire process a complete waste of time for your team.
When you are considering digitization of your paper records, MEDI is your best resource. We will discuss your project, offer cost-effective solutions, and develop a customized plan. We can also implement a data management system to eliminate manual processes and streamline the document retrieval process. Reach out to our team today.
- Correspondence with customers and vendors
- Deposit slips
- Purchase orders and receiving sheets
- Stenographer’s notebooks
- Stockroom withdrawal forms
- Employee personnel records and applications
- Expired insurance policies
- Internal audit reports
- Petty cash vouchers
- Physical inventory tags
- Savings bonds registration
- Employee time cards
- Accident reports and claims
- Accounts payable/receivable ledgers and schedules
- Bank statements and reconciliations
- Canceled checks, stock and bond certificates
- Employment tax records
- Expense analysis and distribution schedules
- Expired contracts and leases
- Inventories for products, materials and supplies
- Payroll records and summary
- Sales records
- Subsidiary ledgers
- Travel and entertainment records
- Vouchers for payments to vendors, employees, etc.
Do Not Destroy
- CPAs/accountants audit reports
- Bills of sale
- Canceled checks
- Cash books
- Charts of accounts
- Current contracts and leases
- Corporate documents
- Depreciation schedules
- Financial statements
- Investment trade confirmations
- Legal records and correspondence
- Minutes books for directors’ and stockholders’ meetings
- Property appraisals and records
- Retirement and pension records
- Trademark and patent registrations
Period of Limitations for Business Tax Returns
Records for tax returns are saved based on periods of limitations. If you file a claim for a credit or refund after your return, you should keep records based on the later date, either three years from the date you filed your original return or two years from the date you paid the tax.
Employment tax records are maintained for at least four years from the date the taxes were either due or paid, whichever is later. If you have income that is more than 25% of the gross income you reported on your return but that you did not report, records should be kept for six years. If you do not file a return for any given year, do not destroy those records until you file your return.
What determines document retention standards and practices?
Document retention is based on the type of document. There are several different governing bodies that dictate retention practices, including the following agencies:
- General Data Protection Regulation (GDPR) for personal information
- Internal Revenue Service (IRS) for tax audit procedures
- Fair Labor Standards Act (FLSA) for HR and employment laws
- Health Insurance Portability and Accountability Act (HIPAA) for medical records
- Employee Retirement and Income Security Act (ERISA) for documents related to employer-sponsored employee pension and welfare benefit plans
- Occupational Safety and Health Administration (OSHA) for labor-related injuries
However, there are also state and local document retention provisions to consider, as well as industry-specific regulations that might apply to your organization.
Best Practices to Comply With Record Retention Policy
Your Record Retention Policy should adhere to state, local, and industry standards. However, there are document retention best practices every organization should adopt to create a comprehensive policy, including:
Research Applicable Laws
Because there are so many governing bodies involved in record retention standards, it is important to research all document retention laws that apply specifically to your organization and industry. You want to ensure you include all legal obligations in your record retention policy.
Identify Business Needs and Archiving Solutions
Your own needs must also be addressed in your record retention policy. You want your policy to improve business-critical processes so you can leverage efficiencies related to document storage requirements. This is your opportunity to invest in a data management system that empowers your team to improve collaboration, customer service, protection of your intellectual property, and more.
Address All Data Types
Combine business needs with legal obligations to create data-specific policies. This ensures all stakeholders understand the length of time data is stored based on regulatory, legal, and corporate rules. This also avoids creating a mindset that all data must be retained forever. Saving unnecessary documents increases the risk of data loss and has a more significant impact in the case of data breaches.
Include a Data Backup Policy
Backing up data is critical to record retention. It ensures you remain compliant while reducing the risk of data loss. Having a clear procedure for data backup ensures you maintain records for all data, so you experience limited disruption following a catastrophic event.
Record Retention Guidelines and Laws by State
To help create your records retention policy it is best to start by reviewing your state records retention policies and schedules. You can find links to record retention laws and best practices by state below:
Should I seek professional help?
Yes, a document management solutions company will ensure you understand the compliance and retention schedules that apply to your organization. At MEDI, we have been offering document retention, destruction and data management solutions for over 40 years. We can help you develop a comprehensive records retention and destruction policy along with agile data management solutions to improve compliance and company-wide efficiencies. Speak with an expert today!