One of the results of living in the Information Age is that businesses compile tremendous amounts of data. Some of it is digital, and some of it is physical. Some has to be kept forever, and some can be destroyed. Determining when should documents be shredded and what should be shredded requires knowing a plethora of federal, state, and local shredding laws, guidelines and regulations.
The first shredding laws primarily governed documents needed to substantiate tax liabilities. In recent years the laws have been expanded to ensure that sensitive documents are secure and to protect the identity of individuals. There’s a lot of confusion as to when and what data should be destroyed. The key is to implement a formal document retention and destruction policy.
The policy should include guidelines for:
- Employee records
- Journals and canceled checks
- Bank statements
- Equipment and property leases
Every kind of data, whether physical or digital, needs to be included in the guidelines.
When to Shred
There is no single standard as to what should be shredded or when should documents be shredded. Business owners need to consult with their accountants and attorneys when establishing their policy. In general, most data needs to be retained until the statute of limitations governing it has expired.
Keep in mind that federal and state laws may have different statutes and requirements. In all cases, not knowing the law is not an excuse for destroying information that should have been retained.
What and What Not to Shred
Documents pertaining to the usual conduct of business, such as bank statements, expense reports, invoices and receipts can usually be shredded after ten years. Documents such as corporate organizational records, annual financial statements, and audit reports are permanent, as are the minutes of board meetings and shareholder information. Contracts may usually be destroyed ten years after expiration.
Insurance records, ledgers, and accident reports are usually permanent records. Tax returns and supporting documents should be retained permanently. Nothing should be destroyed, regardless of the formal policy, if the company is being investigated by any agency or legal authority. All data pertaining any kind of lawsuit or security breach should be regarded as permanent.
Many companies turn to a professional to help establish a document retention and destruction policy that complies with all the laws. It’s also essential to have security over documents until they are actually shredded. On-site shredding is often preferred.
PROSHRED® Milwaukee is a locally operated company offering complete and secure shredding services. PROSHRED® was the first to offer on-site shredding, and they are familiar with the needs of Milwaukee businesses. Call to schedule your on-site shredding service with the trained experts at PROSHRED® Milwaukee.