Document Retention Guidelines: Reduce Your Risk and Increase EfficiencyBanker Resource
September 20, 2013 — 1,098 views
In business you will find that information is your biggest asset. Whether it is technological know-how or a special ingredient in your secret-ingredient-noodles, you have to keep your trade secrets close to you. The moment they become public information, both your competitors and your customers will have the capability to bring your firm down.
If your account details are precisely displayed, you will find that when people know the cost price of your products, they will no longer want to buy anything from you until there is absolutely no profit margin left. The rival companies in the market will find certain areas where you may be slightly weak and capitalize on them.
If a competitor finds that you pay a slightly higher price for a certain raw material, then they will drop their prices to dirt cheap rates. While they make almost no profit, you will be making heavy losses if you have to keep up with the new price range. Once you can no longer sustain the losses your rivals will monopolize the market and recover the money they lost out on while taking your market-share too.
Which Documents to Keep Away From Prying Eyes
There is a massive amount of paperwork that is involved with regard to business today. Although most of it is now electronic, there is a substantial amount of information that has to be stored and kept secure. If anyone chances upon the files there is a risk as they can use it to their advantage by selling it off. In this regard it is the responsibility of the company to try and create a more than satisfactory working environment. Loyal workers are more valuable than employees who are good at their job but breeze through different organizations without staying long.
Under accounting systems, there are a number of documents that should be kept locked away. While balance sheets or company statements do not allow document retention so that shareholders are aware of their investments, other documents are to be kept away from prying eyes. Ledgers regarding accounts payable and receivable should be kept confidential for a period of seven years or so.
Guidelines for Financial Institutions
Canceled checks are even more sensitive as they can bring down the goodwill the company or financial institution has earned over the years. There are, of course, a number of documents that should be permanently kept for the eyes of only a select few, such as the owner or the board of directors alone. All documents regarding corporate records should be permanently kept away, except for contributions and accounting correspondence.
Accounting correspondence is something that must be displayed by law, whereas contributions can be made public as they help gain customers because of an emotional benefit that they see. Corporate social responsibility and other things related to the same can be made public as well. Almost all legal documents should be private, along with a record of assets and tax.