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:
One Year
- Correspondence with customers and vendors
- Deposit slips
- Purchase orders and receiving sheets
- Requisitions
- Stenographer’s notebooks
- Stockroom withdrawal forms
Three Years
- Employee personnel records and applications
- Expired insurance policies
- Internal audit reports
- Petty cash vouchers
- Physical inventory tags
- Savings bonds registration
- Employee time cards
Seven Years
- 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
- Invoices
- 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
- Deeds
- 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:
Alabama
Alabama Document Retention Schedules
Alaska
Alaska Document Retention Schedules
Alaska Employer Recordkeeping Laws
Arizona
Arizona Document Retention Schedules
Arizona Employer Recordkeeping Laws
Arkansas
Arkansas Department of Finance and Administration
Arkansas Employer Recordkeeping Laws
California
California Document Retention Schedules
Colorado
Colorado Document Retention Schedules
Connecticut
Connecticut Document Retention Schedules
Connecticut Employer Recordkeeping Laws
Delaware
Delaware Document Retention Schedules
Florida
Florida Document Retention Schedules
Florida Employer Recordkeeping Laws
Georgia
Georgia Document Retention Schedules
Georgia Employer Recordkeeping Laws
Hawaii
Hawaii Document Retention Schedules
Hawaii Employer Recordkeeping Laws
Idaho
Idaho Document Retention Schedules
Idaho Employer Recordkeeping Laws
Illinois
Illinois Document Retention Schedules
Indiana
Indiana Document Retention Schedules
Iowa
Iowa Document Retention Schedules
Iowa Employer Recordkeeping Laws
Kansas
Kansas Document Retention Schedules
Kansas Employer Recordkeeping Laws
Kentucky
Kentucky Employer Recordkeeping Laws
Louisiana
Louisiana Document Retention Schedules
Louisiana Employer Recordkeeping Laws
Maine
Maine Document Retention Schedules
Maine Employer Recordkeeping Laws
Maryland
Maryland Document Retention Schedules
Maryland Employer Recordkeeping Laws
Massachusetts
Massachusetts Employer Recordkeeping Laws
Michigan
Michigan Document Retention Schedules
Michigan Employer Recordkeeping Laws
Minnesota
Minnesota Document Retention Schedules
Mississippi
Mississippi Document Retention Schedules
Mississippi Employer Recordkeeping Laws
Missouri
Missouri Office of Records Management
Missouri Document Retention Schedules
Montana
Montana Records and Information Management Division
Montana Document Retention Schedules
Montana Employer Recordkeeping Laws
Nebraska
Nebraska Document Retention Schedules
Nebraska Employer Recordkeeping Laws
Nevada
Nevada Document Retention Schedules
Nevada Employer Recordkeeping Laws
New Hampshire
New Hampshire Document Retention Schedules
New Jersey
New Jersey State Records Committee
New Jersey Document Retention Schedules
New Mexico
New Mexico Commission of Public Records
New Mexico Employer Recordkeeping Laws
New York
New York Document Retention Schedules
New York Employer Recordkeeping Laws
North Carolina
North Carolina Employer Recordkeeping Laws
North Dakota
North Dakota Document Retention Schedules
Ohio
Ohio Department of Administrative Services
Oklahoma
Oklahoma Document Retention Schedules
Oklahoma Employer Recordkeeping Laws
Oregon
Oregon Administrative Rules Database
Oregon Document Retention Schedules
Oregon Employer Recordkeeping Laws
Pennsylvania
Pennsylvania Office of Administration
Pennsylvania Document Retention Schedules
Rhode Island
Rhode Island Document Retention Schedules
Rhode Island Employer Recordkeeping Laws
South Carolina
South Carolina Document Retention Schedules
South Carolina Employer Recordkeeping Laws
South Dakota
South Dakota Bureau of Administration
South Dakota Document Retention Schedules
Tennessee
Tennessee Division of Records Management
Tennessee Employer Recordkeeping Laws
Texas
Texas Document Retention Schedules
Texas Employer Recordkeeping Laws
Utah
Utah Document Retention Schedules
Utah Employer Recordkeeping Laws
Vermont
Vermont Document Retention Schedules
Virginia
Virginia Document Retention Schedules
Washington
Washington Document Retention Schedules
Washington State Employer Recordkeeping Laws
West Virginia
West Virginia Document Retention Schedules
West Virginia Employer Recordkeeping Laws
Wisconsin
Wisconsin General Records Schedule
Wisconsin Employer Recordkeeping Laws
Wyoming
Wyoming Document Retention Schedules
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!
