Retention Schedules

Image by freepik 

So, how long are you supposed to keep these important records anyway? Is it ever safe to dispose of your old financial documents? And what’s the best way to get rid of them while still protecting your customers’ information? These questions are answered by a retention schedule. 

What is a Retention Schedule 

A retention schedule is a document that provides a timeline and plan for the maintenance and disposal of business records. Knowing when to throw away your records is as important as knowing when to keep them. While it may be tempting to try and preserve all your important records in case of a rainy day, this can cause more harm than good. 

Why Retention Schedules are Important: 

The over-retention of records leads to serious problems, including increased storage costs and danger of sensitive data leaks. UBC Records Management identifies several benefits to creating and sticking to a retention schedule, including: 

• Reduced risk of privacy and cyber-security breaches
• Improved legal compliance
• Improved efficiency in the workplace
• Reduced storage, digital clutter and associated costs

Lifecycle of a Record 

Records must be kept as long as they have legal, financial, administrative, or historical value. Once a record’s purpose is fulfilled, it can be disposed of. This is known as the record’s lifecycle. 

Image

Typically, the lifecycle is broken into 4 stages: 

1. Creation: This is the start of the lifecycle. It begins when the record is created – such as a receipt at the point of sale – or received by the business.
2. Active Use: These are records you access and reference regularly in the course of business operations. Records should be easily and quickly located at this stage.
3. Inactive Storage: Once you no longer reference a record frequently, the record becomes inactive. Records in this stage must be kept for regulatory or administrative reasons, but may be stored in less accessible places than records in active use.
4. Disposition: Disposition typically means destruction of the record, but it may also refer to transferring records to a corporate or business archive for permanent long-term storage.    

The length of a record’s lifecycle varies. Some records are only needed for short-term business operations while others must be kept for years. When determining the specific retention periods, you can ask yourself or others who are familiar with the records the following questions: 

• How is the record used and what business process does it support or document?
• What is the value of this record to the business?
• What legislation or regulation impacts this record?
• How is the record stored and how much space does it take up?
• How often is this record accessed and by whom? Are any copies created by these additional parties? 

Once you have an idea of the record’s purpose, legal requirements, and the employees or departments that interact with the record you are well on your way to establishing a retention schedule. 

Retention Schedule Resources 

Where to keep your records, for how long and how to request the permission to destroy them early | This page created by the CRA details the location requirements and some general time frames for the retention of records.

Record keeping requirements across Canada | The Canadian Federation of Independent Businesses has created charts with the federal and provincial retention periods for common business records. 

Canadian Guide to Document Retention Policy Best Practices & Provincial Standards | This blog post by MES Hybrid Document Solution provides an easy-to-understand breakdown of common document retention periods and specific industry standards. 

Creating a Retention Schedule 

For every record in your retention schedule a few key pieces of information are required. These are: 

• The record type
• The retention period and action taken at the end of that period
• The person or department in charge of managing the record
• A review date for the existing retention schedule
• A key to understand any abbreviations used in the schedule

In addition, there are several optional categories you may wish to include such as: 

• The authority or legal rationale for the retention period
• The current storage location of the record and any copies that exist
• Access stipulations around the record
• Any additional comments that may be useful to those dealing with the record’s retention

（Below is a simple example of a retention schedule layout with one record type filled in） 

Company: [Your Company Name]

Date Created: [Date of Creation]

Next Review: [Recommended 1 year after creation]

Approved By: [Name/Title/Signature]

Key: 

CY = Calendar Year 

TY = Tax Year 

DES = Destruction  

ARC = Archival transfer 

*Remember: A retention schedule is a living, iterative document. Communicating with the people most familiar with the records will be extremely important to filling out your retention schedule. This will ensure the document functions as it should and your records are kept in tip-top shape!

Next: Best Practices for Recordkeeping