Tips on Document Management for Business

A Document Management Plan can help businesses manage both paper piles and electronic storage of documents.  While technology was supposed to be the answer to the mountains of paper that go along with managing a business, digital files can also pile up, with documents scattered among multiple departments and computers, as well as lurking in technology department back-up files.  Managing documents, whether paper or electronic, in accordance with a well thought out Document Management Plan is critical to smooth business operations, compliance with laws, protection from litigation risk and maximization of profit margins.

Why is a Document Management Plan important?

  • Efficiency: Creating a Document Management Plan can contribute greatly to the overall efficiency of your business. It can minimize expensive storage space for your documents and save time.  A Document Management Plan creates a process for what and how to save, what and how to discard, and retention time periods.
  • Preserving Confidentiality:  Your business by its nature involves confidential documents such as customer lists and financial data.  Your business may also involve working with confidential or proprietary client information.  Inadvertent disclosure of proprietary documents can cause potential damage or liability for your business, or negatively affect client relationships.  A Document Management Plan can address any special processes and procedures for saving and discarding confidential or proprietary information. 
  • Avoiding Liability in Litigation: Ensuring critical documents are saved may assist in the defense of litigation.  In the event you face litigation over anything from employment practices to contract disputes, having the appropriate paperwork can mean the difference between a successful outcome and a settlement against you.  In addition, once a threat of litigation exists, it is critical to avoid destroying any documents that may be relevant to the litigation to avoid liability.  Therefore, a “litigation hold” policy is essential to any Document Management Plan.
  • Compliance with State and Federal Laws: Federal and state document retention laws outline time periods for retention of various documents and may govern everything from tax records, financial records, to employee records.  In addition, statutes of limitations may vary by state and affect your internal rules on how long to retain documents. 

Five tips for an effective written Document Management Plan for your business:

  1. Identify the Plan Manager

A plan of any kind is only effective if it is followed. Designate someone to take charge and be accountable for managing the Document Retention Plan and ensuring employees follow the plan. 

  • Identify the Documents

Identify the critical physical and electronic documents to your business such as sales and purchase records, financial documents, government and legal documents and client engagement documents, whether electronic or hard copy.  Know where these documents are located.  Electronic documents such as email also need to be organized and managed.

  • Determine how long documents should be kept

Consult with an attorney to determine how long to keep documents.  Deleting documents before permitted by law may cause liability to your business.  Having too many documents in storage, however, whether paper or electronic, can be costly and also create liability issues in the event of litigation.   Finally, in the event of actual or threatened litigation, all documents relevant to the litigation generally must be retained to avoid liability for improper destruction of documents. 

  • Decide how documents should be retained or destroyed

A Document Management Plan can include best practices for retention of documents, including confidential and proprietary documents.  Similarly, the Document Management Plan can include best practices for destruction of documents for your business such as shredding paper documents.  Deletion of electronic documents will involve finding and deleting all copies of electronic documents, including potentially those stored on back-up software. 

  • Identify and Coordinate Best Practices for Document Security

Finally, coordinate with an information technology expert to consider your document security plan and disaster recovery plan as part of your Document Management Plan. Your security plan may include, at a minimum, developing a strong password system for anyone accessing company records and require it for all personal devices used in the workplace. You may also restrict the use of personal devices or home computers for business matters.  Educate your employees on required security practices in the workplace and hold them accountable for failure to comply.

You may find volumes of information on document management on the internet.  However, consulting with an attorney to draft your plan may avoid costly errors.  Each Document Management Plan will differ depending on the laws relevant to your business.