Record Retention: Are you a hoarder?

We’ve all seen (or at least heard of) the A&E reality show Hoarders, where the homeowners have accumulated so much stuff that their houses have become hazards, often with only narrow pathways from room to room.

It might not be so blatantly evident, but businesses can be hoarders, too.

Maybe there’s an upstairs area or a corner of the warehouse where old bank statements, invoices and employee records pile up. This clutter only gets cleaned out when the space runs out. Even paperless businesses can accumulate so much data that they run out of space on the server. In some ways, electronic files are much more difficult to handle. Unless records are managed by special software, everything sits on the network until someone hits delete.

While it might seem like a good and safe idea to keep everything, that’s not necessarily true:

  • It will cost you. Paying for off-site storage can get expensive. Turning $20+ per-square-foot office space into storage isn’t a bargain either. Electronic storage and backup have a cost, too. Also, if you keep everything, employees can waste a lot of time looking through what they don’t need to find what they do need.
  • It puts you at risk. You might be better off not having certain old documents at all. In today’s litigious environment, keeping records past your legal requirement to do so can have a downside. Creating and implementing a written-records retention schedule (we’ll link to it below) could be your best defense.
  • It’s hard to secure. Generally, paper overflow records are stored in an unsecured location within the business. These documents might contain personnel records as well as pay records with social security numbers. Owners who are fixated on financial privacy sometimes store old tax returns or financial statements in areas that are out-of-the-way but unsecured, and any passerby can have a look.

Bottom line: Unless there is a compelling business or legal reason to keep something, you should consider eliminating files and records whenever you can.

You can find our Record Retention Schedule under the Resources tab. It covers lots of matters—from bank statements and maintenance records to sales invoices and tax returns. We encourage you to work with your legal advisor to develop a specific program. Certain requirements might vary by profession.

When you finally decide to let those old records go, proper disposal is also a concern. There are a number of mobile services that will come to you and destroy old, unnecessary records on-site.

That’s just one more smart way to take control of your documents and files before they take control of your business’s valuable space.