The Importance Of A Retention Schedule

So many businesses have a “we keep everything forever” policy. This isn’t sustainable or practical in a digital world.

The impact of automated data creation is increasing technology costs. As this information set grows, and data is created and stored electronically, often in image format, (which matters because they are bigger), none of the traditional throttles are in place. A computer can generate documents at a speed no human can produce. With scanning, there is a predictable, fixed limit to how much a company can scan with their infrastructure.

Many of my long-term clients began their scanning initiative with the notion that “saving everything” was the way to go.  They felt they were too small to bear the administrative expense of creating and maintaining a retention schedule. That isn’t feasible any longer. Without a retention schedule that includes destruction, the cost of data storage is increasing exponentially and will continue to rise.  Having a retention schedule, putting it into effect and measuring compliance can go a long way in terms of overall efficiency.

For example:

1. Saving Space: With the move to the cloud and virtual storage, you can now assign a “cost” for storing these files. Files should only be stored if they need to be retrieved for business purposes, or are legally subject to discovery or audit.
2. Eliminating Risk: If your records are destroyed as a normal part of doing business (in accordance with your retention schedule), you can’t be compelled to produce those documents in a discovery proceeding. If their destruction was an anomaly, the court can cite adverse inference or spoliation regarding the document handling. Depending on the nature of the lawsuit,  this could be disastrous. Likewise, if your policy is to save everything, then everything is fair game in court.
3. Decreasing Cost: One of my long-term clients created an automated sales system that now automatically generates, indexes and files all sales related customer documentation. Their scanning load has decreased but they are creating four times as many documents per week as they were by scanning.  Additionally, they have an off-site backup system in place. The sheer volume of these records continues to increase their monthly cost in huge proportions.

Shows like “Hoarders” and “Buried Alive” exist because people understand and connect emotionally with how hard it can be to let go of things. Small business owners have a unique emotional tie to their businesses that can make getting rid of older documents difficult. (Minimally, you can have a historical documents section) but be clear this isn’t about sentiment, it’s about good business decisions and making sure your company will be around to serve your customers. In operating efficiently, you can’t help but pass the value to them.

Need a retention schedule? Check out this resource.