Document retention serves a higher purpose than simply ensuring accurate business records are kept. Effective document retention policies are informed by a variety of considerations from a business, technical and legal standpoint. In fact, a misguided policy could see you in noncompliance with the law.

Canadian law requires that corporations, trusts and organizations keep adequate records that provide enough details to determine tax obligations and entitlements for a period of six years. Failure to keep records, or destroying them too early, could result in prosecution.

But legality should not be the only concern when implementing a document retention policy. While legal considerations are important, any policy should also balance technical possibilities, and of course the needs of your business. Below are some tips to help your business create an efficient document retention policy.

1. Create a Formal Policy

First things first, a formal document retention policy is an absolute must. It is critical from both a legal and business standpoint. In regard to the former, an official document retention policy that is practiced and enforced sets a framework that ensures you are in compliance with the requirements outlined under the law. For the latter, a formal policy will help your business eliminate storage costs by ensuring that you do not obtain records for any longer than you need to.

2. Include an Implementation Plan

A formal document retention policy that is not properly implemented will do nothing but waste company resources and fail to serve its initial purpose. Employees should be made aware of their roles and responsibilities under the policy, as to avoid confusion or poor employee adoption. Furthermore, an implementation can help account for and improve the various ways that employees store documents, so that information is traceable and important records are not misplaced. Document management systems can be highly effective to this end (see #3).

3. Integrate Your Policy with a Document Management System

Document management systems that work harmoniously with your document retention policy cover all bases: legal, business/operational, and IT. Such systems provide a more efficient (and consistent) way to file, store, organize, secure, and retrieve every important document or record that is prudent to keep. It also allows organization to automate processes such as expense reports, AP invoice approval, and AR functions that can be tracked and stored logically within a single system. Furthermore, document management systems allow for easy retrieval of any records, meaning the ability to find the information you need is right at your fingertips.

Remember, an effective document retention policy is not just important from a legal perspective – it can also service business and operational needs by curtailing document management issues and eliminating costly business processes. If you create and implement a policy using the above advice, you can ensure that all considerations – operational, legal, and technical – are attended to.

Any organization that has tried to improve an existing record management process, or create an entirely new one, has likely run into a number of issues. Many of these issues stem from a few common myths associated with business record management, and re-evaluating perspectives on record management could very well be the first step towards overcoming such problems. Here are four commonly-held misconceptions about records management that could be hindering improvement to your record management process.

In the digital age, analog records are quickly becoming obsolete. This doesn’t mean that paper records need to be completely eliminated, but rather that as remote workforces, digital communication and distribution, and a higher volume of data creation become the norm, analog formats are less and less practical. Put simply, electronic document management is the way of the future.

If you’re new to the inner workings of document management systems, it’s unlikely that you have a comprehensive understanding of electronic records, what they entail, and how they ultimately help improve business operations. To offer some insight into this, we’ve compiled a list of things you may not have known about electronic records.

Electronic Records exist in multiple formats

A common misunderstanding is that electronic records are simply paper documents that have been converted into digital files. While this is not untrue, it is an oversimplification. Electronic records do consist of converted paper files, but also include many, many other types of formats: microfilm, microfiche, images, cheques, non-standard documents, etc. Depending on the sophistication of the conversion equipment being used, almost any kind of document can be converted into electronic format, regardless of the source.

They are perfectly acceptable for legal compliance*

In Canada, businesses, trusts, and organizations are required to keep adequate records that provide enough details to determine tax obligations and entitlements for a period of six years. However, they do not have to be paper: electronic records are perfectly acceptable. In fact, because electronic document management is more efficient, particularly with a document management system, legal compliance and document retention becomes more accurate and easier to manage.

Electronic Records can be more effectively controlled

Physical records (namely paper) have a number of issues: cost, susceptibility to misplacement, limited indexing and classification ability, poor retrieval and search functionality, and general disorganization. If you choose to go with electronic records that are integrated within an electronic document management system, your organization will no longer face these problems. Every document is traceable, indexable, easily classified, and can even be included in automated workflows so that error-prone, time intensive manual processes are eliminated. This allows for the setting up of functions such as retention rules, security and access controls, DRM, seamless information sharing and collaboration, and more.

The above are a few aspects of electronic records that aren’t widely known, but nonetheless convey why electronic record management systems are becoming so popular for businesses of different sizes in different industries. The right solution can significantly improve records management processes, which can help both directly and indirectly improve other business areas.

*Note: The information provided in the MES blog is not legal advice as we are not lawyers. Please reference the Canadian Standard Document and your legal counsel to ensure that your electronic documents are legal.