Best Practices in Records Retention
When building your business, implementing a document management system may not seem like the most exciting item on your agenda. However, good document management and record keeping processes can help save you business and legal headaches in the long run.
Here are some things to keep in mind:
How documents are stored
There are many cloud-based services available that can fit different organization’s needs. Consistency is key: you want to make sure that all employees are trained on the company’s document management system, and that important documents are available when needed (not saved to just one employee’s device or only as an attachment to an email). Good record keeping practices ensure that members of your team can access the documents they need when they need them. It also helps protect your company if employees depart, as access can be turned off for former employees without losing key documents you need for company operations.
Smart Habits for Better Recordkeeping
What types of documents should be stored
Your company records should include documents such as your founding documents (such as partnership and operating agreements), employee or independent contractor agreements, service agreements, and investment agreements. Having the fully signed and dated version of a document can help avoid misunderstandings (internally or with external partners) and will help your business keep running smoothly. If there is a dispute that heads towards litigation, a good records retention system can help you and your attorney review all available information and strategize on the best path forward. Internal compliance documents, such as shareholder or board of director meeting agendas and meeting minutes, should also be preserved.
What Documents Should You Store?
What legal requirements apply
Depending on the types of records you work with, and the countries you work in, different laws may apply. For example, companies storing or processing healthcare-related data should consult with an attorney to determine whether HIPAA regulations apply to their work. If your company collects or stores personal data from individuals in the European Union, you should comply with applicable GDPR (General Data Protection Regulation) guidelines. In the U.S., there are state and local laws related to what employment records must be maintained and for how long. Check with an attorney to see which of those apply to you.