Records: The keeping of records and documents of past and present business.
QUESTION: Q&A - how long to hold onto records
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Hi Ken,
We have used your contracts for years and looking through our file room which is now getting
very full. We have folders from Subscribers that canceled service over the years. We thought
we could start to consolidate room by removing information from them and keeping just the
contracts. Is it okay to destroy old call list changes, invoices, etc? What is your suggestion?
Thanks, Dave J
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ANSWER:
There are different considerations that you should focus on. First, you may have a requirement to maintain records for a particular time in your licensing laws; you should check that out. NY requires employee and subscriber files to be maintained for 3 years after they are inactive.
Other considerations deal with potential claims against your company. If you have to defend an action you will want to keep your files at least for the duration of the statute of limitations in your state. The statute of limitations is the time within which a claimant must commence an action or it becomes stale. Negligence is generally 3 years and breach of contract 6 years, but check your state to be sure. Since a contract action can be commenced within 6 years, that would be the safest time to hold the files.
There are subscriber records just as important as the contracts. You should obtain and maintain central station records, especially if you know of a loss and potential claim. If you don't routinely get central station records for your subscribers then if you know of a loss do not put your head in the sand and hope the claim will never come, get your central station to send you the reports - the central station activity report for the entire life of the account. You can ask your central station how long they maintain their files, but don't count on them to hold your records; get the records and you hold on to them.
Internal Revenue rules would apply to financial records, and I think 7 years is the time line on those records.
Also, it is perfectly acceptable if you want to scan and store your files digitally.