Many law firms and small business owners will ask what records can we destroy and how long do we need to keep business records? Good questions.
What are business records?
Business records are defined as:
Any recorded information, regardless of medium or characteristics, made or received and retained by an organization in pursuance of legal obligations or in the transaction of business.
– ARMA International
In simple terms, this means any information your business has created or received that documents a business transaction or obligation. Examples of business records are:
Why do you need to keep business records?
Is it OK to shred your business records once the business task is completed? Well, business records are normally kept to:
Destroying records before their useful life is complete can mean unnecessary business costs and fines. There are legal and financial requirements that need to be considered before destroying business records that varies according to the type of your business and the jurisdictions where you conduct business. And, if your firm has any business records relevant to a pending lawsuit, you cannot destroy them without risking jail and fines and not to mention making your business look bad. If you are a law firm, you may need to notify your client before destruction of matter file records.
When you do destroy business records, be sure to do it the right way.
Shred confidential paper documents versus ripping them in half and throwing them away or placing them in the recycling bin. You do not want thieves to reconstruct sensitive information.
For electronic records, consider the following methods to destroy electronic records:
Be sure to keep a destruction log of business records destroyed. Include on the log:
You can reference this log if there is any question if or when a business record has been destroyed.
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