Dumping ‘Just in Case’ Paper Copies
After turning file cabinets of paper documents into digital files, many companies insist on keeping the paper copies “at least for a little while.”
And that “little while” often extends into many years. Which raises two questions: Do you really need the security of paper copies? And, does paper raise its own insecurities?
Storing paper records somewhere hardly guarantees that they’ll be around forever. Ask anybody who lost records due to Hurricane Sandy. Jan Jasper, author of Take Back Your Time, says that in most cases, electronic copies — redundantly stored in separated locations — are a more secure format.
Keeping backup paper copies also presents a security risk. They often contain personally identifiable information, such as employees’ Social Security numbers, dates of birth, and checking account information. The federal government considers anything pertaining to an employee’s health, and associated insurance claims confidential as well. If those documents get into the wrong hands, you could face a big liability.
Another problem with paper copies: Often they are out of sight, out of mind. It just is easy to lose track of boxes of old papers. Many companies use off-premises storage and, over time, what’s stored may be forgotten about.
For these reasons, many experts urge companies to shred whatever paper does not fall into the “must save” category as soon as possible. What can be tossed? An industry rule of thumb is that almost all paper documents are retained for up to a half year (some experts suggest 90 days, others six months). The intent is to keep the paper on hand until the matters it deals with are handled and — probably — there will in fact be no further need to consult these records, either in paper form or digital.
Of course, all of this needs to be planned with your records management and legal departments, which can help develop a document deletion policy that makes sense and yet ensures that your company keeps the records it needs to – especially should it be subject to a legal hold.
For example, not everything should be consigned to the shredder at the half-year mark. Some papers need to be kept forever. This is admittedly a very small pile, consisting of documents with potential historical significance — a personal note signed by the U.S. President, for instance — as well as key papers pertaining to a company’s incorporation. In some cases, it also includes the company’s benefits programs, and a handful of other special pieces of paper such as mortgage papers.
Many tax experts also advise keeping paperwork pertaining to taxes for seven years. Tax agencies sometimes say briefer retention is required — the IRS says three years for most paperwork, from most taxpayers, but that can get nudged up to six years in some cases. So cautious advisers frequently tell their clients to keep tax-related paper for seven years, just to be sure.
Many experts accordingly urge companies to follow a detailed document purging policy where all documents — except those few marked for permanent retention on paper — have a specified end date where they are sent to the shredder. That reduces storage costs but, just as important, it helps minimize dangers of lost and forgotten documents that could trigger real risks were their contents released.
The key: Be systematized, be thorough. Have a destruction plan and stick to it. That way paper retention is minimized — and so are the risks paper bring.