like everything else in your practice, document retention needs a system.
by roman h. kepczyk
quantum of paperless
managing digital files is in many ways similar to managing paper files in that the firm must have standards for who can create a document, add to or edit a document, file it, and eventually purge the file.
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unfortunately, as digital files are on the network and “out of sight,” many firms are not really aware of what files are stored, the most current versions and whether or not they should be deleted.
as firms transition to the “less-paper” environment, it is recommended that they implement a digital document retention policy and make users accountable for adhering to this policy. microsoft windows explorer is one of the weakest and least reliable document retention solutions as virtually anyone on the network can create, edit, overwrite or even delete any document without recourse. firms won’t know a file has been damaged or destroyed until the point at which they can’t find it or try to load it, which can be days, weeks or even years after the change, and obviously too late.
“60% of firms had an electronic document destruction procedure.” – cpafma 2019 survey
on the flip side, not having good naming conventions and directory structures can result in multiple versions of the same document, leading to confusion and errors as to which document should be used, further wasting professional time.
the solution to this is developing a digital document retention policy and training personnel on adhering to firm standards. ideally, firms will use a dedicated document management system that has an integrated or forced retention policy. this means that based on the document’s profile, it would be flagged for deletion at its expiration date. the firm would have the option to keep or delete the file, which is much better than the current situation in which someone would have to access and evaluate every file to determine what should be done with it.
recommended actions:
- update firm document retention policy to include electronic documents and remind all personnel on firm retention policies.
- evaluate firm’s document retention cycle and promote accountability for cleaning out obsolete files.