Record Retention

What is record retention?

Record retention refers to maintaining business records in accessible form for specified periods. While often used interchangeably with document retention, record retention emphasizes the information itself rather than the physical or digital document. Records must remain readable, retrievable, and intact throughout the retention period regardless of format changes or system migrations.

Electronic record retention challenges

Digital records face unique retention challenges. File formats become obsolete. Storage media degrade. Systems are replaced. Ensure you can read old files as technology evolves. Migrate records to current formats during system changes. Back up electronic records to multiple locations. The IRS and courts accept electronic records but require that they be producible in readable form.

Building a retention schedule

Create a written schedule listing each record category, retention period, storage location, and responsible party. Review the schedule annually. Train staff on what to keep and for how long. Audit compliance periodically. A documented, followed retention policy demonstrates good faith during audits and litigation. Ad hoc approaches create risk.