Document retention: Policies make perfect

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If your firm doesn’t have a document retention policy, it’s something to put high on the list of priorities for the coming year. Whether starting a new initiative in data retention and compliance, or working to improve your firm’s adherence to an existing policy, leveraging a document management system will increase your likelihood of success.

Do you have a document retention policy?

A document retention policy categorizes the various types of information and documents that an organization retains. It defines the compliance rules, and the applicable internal processes for compliance, including secure storage and management during the active life of the data, as well as archiving and purging or destruction of data after its useful life. Categorization and retention periods take data security and the applicable regulatory requirements into account.

According to the 5th Annual Accounting Firm Operations and Technology Survey, just 43.8 percent of firms report that they have a retention policy that is followed by firm employees. Another 21 percent report that they have a retention policy but “it is not followed.”

Whether your firm has a policy that is not being followed, or you are working on a retention policy for the first time, it’s important to consider these three ways a document management system can support your retention and compliance efforts.

1. Efficiency. An effective document management system can intelligently recognize standard tax forms, invoices, agreements and other documents, and automatically file them into folders and binders by applying the firm’s file naming and location policy to all documents. A good system will support your firm’s naming conventions and retention policy, ensuring that a client’s engagement binders, and ultimately the archive, are complete, orderly, and easy to navigate.
2. Data security. The AFOT survey reports that 94 percent of firms use email to exchange client information and documents. Email is the prime target for hackers, and a risky way to send confidential content. A document management system can provide a secure web-based portal site for securely exchanging documents online, and many are very simple for clients to use.
Storing client data that your firm no longer needs also increases risk of data breach or loss. Once your retention policy is in place, ensure that action is taken on a regular basis to reduce risk of loss or security breach. When selecting a document management system, look for one that offers tools to assign retention rules and initiate the purging cycle according to your organization’s retention policy.
3. Legal obligations. Having a document management system with managed archiving enables firms to effectively manage volumes of data, both in active use and in retention. In the event of litigation or a potential merger, documents required for discovery and review will be easily retrievable. If requested documents had been purged in accordance with a written retention policy, the obligation to provide documents may be lifted.


Consider the benefits of document management when addressing records retention and archiving. Digital content takes less physical storage space, is easier to search, and can be stored in a manner that makes it accessible to a variety of employees who need access to it.

Perhaps more importantly, an effective document management system enables firms to easily retrieve documents at critical moments: when called upon by a client, an auditor, or the courts. A document management system offers the confidence that critical documents have been stored in a secure manner, untouched, and were not accidentally moved or deleted.

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Document management Documents and records retention Tax records Client portals