Running a business means drowning in paperwork. Contracts, emails, invoices, reports - the documents pile up faster than most people realize. 

A corporate document retention policy is your lifeline in this sea of paperwork, helping you keep what matters and safely get rid of what doesn't. But be careful, because the policy and requirements differ by industry.

The importance of a document retention policy

Most business owners learn about document retention the hard way. I once talked to a small business owner who lost a critical contract because they couldn't find the original signed document. One misplaced piece of paper cost them a $75,000 project.

This is why document retention matters.

Imagine trying to prove a contract's validity years later, only to realize the document disappeared. Or facing an audit and scrambling to find critical financial records. These scenarios happen more often than you'd think.

The real benefits go beyond just keeping papers organized:

First, you're creating a legal safety net. Different industries have different rules about document storage. A restaurant keeps health inspection records differently from a tech company's software development documentation. Your retention policy ensures you're always on the right side of regulations.

Second, it saves you money. Storage isn't free. Whether it's physical filing cabinets or digital cloud storage, keeping every single document forever gets expensive. A smart retention policy helps you keep only what's necessary.

Organizations like KORTO have built entire businesses around helping companies manage their data retention challenges across different industry needs.

How to develop an effective retention policy?

Developing a document retention policy is about creating a practical system that works for your specific business.

Start by walking through your actual document workflow. What documents do you create daily? What stays? What goes? This isn't a theoretical exercise - it's about understanding your real business operations.

You'll want to consider several key areas:

• Legal requirements specific to your industry
• Potential future needs for historical documentation
• Storage costs and practicality
• Risk management

Technology has made this process much easier. Modern document management systems can automatically track retention periods, send alerts when documents need review, and ensure secure destruction of outdated files.

The most successful policies aren't complicated. They're clear, straightforward, and actually used by your team.

Record retention policy template & example

A good policy doesn't need to be complicated. Focus on these core elements:

• What documents you're tracking
• How long each type of document gets stored
• Where and how documents are stored
• Who's responsible for managing documents
• How and when documents get destroyed

Understanding the period of document retention is a strategic business decision. The right approach turns your documents from a potential liability into a valuable business asset.

Technology solutions for DMS in business have transformed how companies manage information. What used to take rooms full of filing cabinets now happens with a few clicks.

It’s important that you understand what is information and how to use it to your advantage. But let’s take a look at an example of a retention policy template, to have a clearer view of what information you should put in your retention policy.

Record retention policy template

The main things we need to put in the retention policy are: 

• Purpose
• Scope
• Policy
• Retention period
• Disposal
• Protection layers
• Approvers
• Appendix

Purpose

Our company maintains this record retention policy to organize important business documents, comply with legal and regulatory requirements, and reduce unnecessary storage costs. This policy helps us maintain efficient operations while protecting vital information.

Scope

This policy applies to the following departments:

• Finance & Accounting
• Human Resources
• Operations
• Legal
• Sales & Marketing
• Information Technology

Policy

This policy governs the following types of documents:

• Financial records (tax returns, invoices, receipts)
• Personnel files
• Contracts and agreements
• Corporate records
• Operational documents
• Correspondence
• Digital records and emails

Retention period

Disposal

Documents reaching the end of their retention period must be:

• Paper documents: Shredded using the cross-cut shredder located in the records room
• Electronic records: Permanently deleted from all systems and backups
• Media (CDs, DVDs, drives): Physically destroyed by IT department
• Monthly disposal sessions will be scheduled and documented with a certificate of destruction

Protection levels

Approvers

Any deviation from this retention policy requires approval from:

• Finance records: Chief Financial Officer
• HR records: HR Director
• Legal documents: General Counsel
• IT records: IT Director
• General business records: Department head and Records Manager

Appendix

Here you should list definitions of terminology, something like:

• Active records: Documents currently used in daily operations
• Inactive records: Documents no longer needed for daily use but must be retained
• Permanent records: Documents that must never be destroyed
• Records custodian: Person responsible for maintaining records in each department
• Legal hold: Suspension of document destruction during litigation or investigation

Last revised: [DATE]

Policy owner: [NAME], Records Manager

Your document retention policy should feel like a living, breathing part of your business strategy. It protects you, saves you money, and helps your business run more smoothly.