Data Management

Talking Shop: Create a system for saving and archiving business records

Know which business records to keep to meet legal mandates


By Sean Haeberlin

One of the most complicated aspects of a record management (RM) program is record retention, the output component of an RM program. Retention is complicated because it concerns the diametrically opposed activities of disposing of and retaining files. For example, you can destroy document duplicates, but you must keep historical documents forever. On top of that, fiscal documents are governed by a labyrinth of federal, state, and municipal laws.

Another problem is that no one really knows what records should be kept or how long to keep them. How long should one keep documents that went into the development of Dbase, for example, as opposed to similar documents used for the development of Access? In a recent article, I discussed the first four steps in creating a record management program. In this article, we’ll focus on how to deal with inactive records.

Is the series vital and, if so, for how long?
The first question you ask is whether the record series is vital or essential to the continuation or resumption of an organization. They are necessary for defining its legal and financial position (i.e., documents of incorporation or accounts receivable). Nonvital records are records that can be re-created with little effort or convenience-copied to assist in the operation of the enterprise (e.g., a duplicate in one branch of a company may be the only copy of the records in another branch).

The next question is how long the record series will remain vital. This question is answered by placing the record series in one of the following categories: historical, legal, research, fiscal, or administrative. The categories are organized hierarchically according to the importance of the document, the most important being historical records and the least important being administrative records. The categories can overlap, meaning that a record could be classified in more than one category. If a record falls into two categories, the higher category takes precedence, and a single copy of the record is retained.

Figure A shows an example of a categorized chart, with the record series listed on each row and the categories as column heads.
Figure A
Record series
Historical
Legal
Research
Fiscal
Administrative
Progress reports
X
Presentation materials
X
X
Fiscal files
X
Design specificiations
X
X
Project details
X
X
Applying our categories to our record series would produce a table similar to this one.

Historical  records are records considered essential to a complete record of past and present activities. These records are moved to an archive and are kept forever.

Legal records are files such as proof of transactions, records of action; claim papers, or financial agreements (leases, titles, contracts). These records are also kept forever.

Research records are records used to determine significant trends in the development of the enterprise, materials for studies in the production or operation of the enterprise, and records used to uphold a legal investigation. Things that would fit into this category would be the original source code of an application or the production design used to create a car part. In some instances, a five-year retention period is appropriate. In other instances, in may be a seven-year period. You may even determine that the original source code has historic value and categorize it as a historic record. The source code is then kept forever.

Fiscal records are summarized housekeeping records, such as year-end budget appraisals, compiled payroll vouchers, or tax returns. Payroll records are generally kept for four years, while cash receipts are kept for three years.

Administrative records are procedural records (e.g., manuals, directives, rules, and regulations that establish a course of action for the company) and records used in the making of administrative decisions. An administrative record could consist of the policy governing Internet use or the well-documented script you use for backing up your systems. You would keep the policy and script for one year after they have been superseded. Generally, with administrative records, once the administrative need is met, they no longer need to be retained.

As you look at Figure A, you can see that progress reports are considered administrative. Therefore, they can be disposed of rather quickly. Presentation materials, on the other hand, have historic value and must be kept indefinitely. The point of this exercise is to apply an agreed upon objective measure to all records. The destruction or retention of a record is determined by which category the record falls into. Who owns the record will have no significance.

Don't reinvent the wheel
Record management is a huge undertaking. All firms, large or small, should have a record management program in place. A wily IT manager would follow the axiom “why create when you can imitate?” Many state and municipal governments publish their record retention guidelines on the Web. Universities frequently publish their programs. Adopting one of these programs for your own company will provide you with the necessary hands-on training and save you much time.

Record management programs
Have you created a record management program? Do you plan to? Do you think this article will be helpful? Send us some mail or post a comment.

 

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