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A records retention schedule is the cornerstone of an effective records management program. It is a policy document that defines an organization’s legal and compliance recordkeeping requirements. A company implements a records retention schedule in order to ensure that its records are kept as long as legally and operationally required and that obsolete records are disposed of in a systematic and controlled manner. The records retention schedule is intended to ensure that employees adhere to approved recordkeeping requirements, and that they do so consistently.
The Importance of A Retention Schedule
Records retention schedules serve as a company’s legal authority to retain and purge records and, therefore, hold great importance for a company. The records retention schedule captures all of the types of records created and used by a company in the course of its business and indicates how long these records are required to be retained. A retention schedule needs to be developed and applied in a systematic manner, as part of a company’s corporate- wide records management strategy. Both development and implementation of a retention schedule are important elements in establishing a “good faith” effort and ensuring a sound records management program.
Risks Of Not Having A Retention Schedule
As the volume of retained business records expands, so do the associated risks of not having a retention schedule. Establishing how long to retain records requires the development and implementation of a credible records retention policy. Irregularity or inconsistency in a company’s records program or the absence of a credible records management program can splinter outsiders’ assumptions of good faith. Absent a viable reason, keeping records for longer or shorter times than guidelines dictate exposes a company to unnecessary risk.
The more information a business retains, the greater the burden of identifying and locating records when needed for reference purposes and legal compliance.Without a records management program with indexing capabilities, the effort of locating required documents can be immense. Risk exists if a company is not able to locate all seemingly relevant records and unintentionally withholds required documents.
Through the successful development and implementation of a records retention schedule, businesses can realize the following benefits:
- Improve the overall utilization of resources
- Control the unrestrained growth of records volume
- Demonstrate compliance with statutory and regulatory recordkeeping requirements
- Enforce the consistent implementation of recordkeeping policies
- Improve the ability to locate and retrieve records when required
- Reduce litigation risks
A retention schedule organizes a company’s records in categories called record classes—groupings of records that support similar business processes and that have related legal and operational retention requirements. Creating record classes allows a company to apply consistent retention practices to similar types of records. Each record class consists of a description of the process the records support and examples of the types of records that fall under the record class.