Annual Office Clean-Out: Retention Guidelines

There are two major obstacles when you clean out files: one is getting started (you've done that, right?), and two is knowing how long to keep documents.

The work is much faster when you have retention guidelines to follow.  Follow the link to see a CPA firm recommended File Retention Guidelines for individuals and businesses.  It's not perfect (it seems to be ignoring electronic record keeping) but it's a start. The IRS will accept electronic registers, and your bank keeps electronic copies of checks for at least three years, so paper copies are generally not necessary.

File retention guidelines become more important as the size of the business increases, since the default is for employees to keep information when there are no guidelines. A large corporation may have retention guidelines (although often the majority of staff are unaware of their existence), so ask before starting your office clean out, and make sure staff understand them.

If no guidelines exist, suggest your employees write down questions as they occur. Have daily recap meetings to discuss and answer these questions, and use the answers to begin creating written retention guidelines.

Two other common situations:

Large files - The file in the picture is 2 inches thick (yes, it's one of mine - before purging). How likely is it you can find what you need quickly? The solution is to create subcategories as you purge the file, each subcategory in a new file, so that no file is thicker than 3/4 inch.

Finally, in an office setting, it's amazing how often, when I ask why someone is keeping certain files, the answer is "They were left here by my predecessor, and I didn't know what was important". After more questioning, it turns out the files in question have not been looked at in over two years. The good news is that these files are very quick to purge, since they obviously haven't been used. Presto - lots of extra space!

Now that you have a plan of action for the paper in your office, next week we will move on to analyzing your office equipment.

Share your  progress, tips, and questions as comments to this post so others can learn from your experience.

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