NOW FOR SOMETHING COMPLETELY DIFFERENT: RECORDS RETENTION
If you have been reading The Micromobility Reporter you will recall I’ve written a series on the systems used in your business, how to protect the data in your business, how to manage employee access to different systems, and other topics ensuring your business data remains secure. I’ve written how a case can be made that the most important, most valuable asset your business has is the data the business generates.
From my writings you might expect that since your business data is so valuable it also should be treated as being immortal. That brings me to this article on record/data retention. Retained records/data are too often out of sight, out of mind. Record/data retention is a serious issue that many times gets overlooked in a business, especially a small business.
How long and what type of data your business retains starts as a legal issue and shouldn’t be ignored. That includes tax returns (federal, state, and local), personnel records, expense receipts, sales records, etc. If you have not already had this conversation with your accountant and/or legal team, you should do that as soon as possible. You need to make sure your retention will meet all legal requirements should you be audited by a government agency.
Retention of certain types of records/data is not legally required, but managing that retention is a good business practice. Retaining sales records can help you follow up with existing customers for service offerings, for accessory add-ons, new product introductions, and community involvement. Using sales data in this manner will also help you know how many of your past customers are still in the area or whether they have moved. Sales data that includes serial numbers of bicycles sold and to whom they were sold is imperative should a recall be made to rectify a safety issue.
Inventory records/data can tell you what is selling, what time of year certain items sell (or don’t sell), what items are languishing in the dark corners of your storeroom, and how well that last promotion worked. These are just two examples of how records/data can be useful.
This brings me to an important distinction – the difference between data and information. Data are facts and statistics collected for reference and analysis. Information is facts provided or learned by analysis from referred applicable data. In many conversations, the terms “data” and “information” are used interchangeably. They shouldn’t be, and understanding the difference will help you to make better decisions. Multiple data points will lead to better information to help you manage your business. Data are the building blocks of information. It may take multiple data points to glean valuable information.
What if there is no legal requirement for how long a record or data should be retained? Part of the answer might be where else information from that record or data is used. Assuming there is no legal requirement for the retention of specific records or data does not mean that data is or should be immortal. You may think that heresy coming from someone who has written a series of articles saying how important it is to secure your data, keep it from getting corrupted and make sure you have backups to restore your data in case you’re hacked or suffer a natural disaster.
Hopefully, many of the shops in western North Carolina affected by the remnants of Hurricane Helene had taken precautions to help them rebuild their systems and return to business as quickly as they could rebuild their facility. (There is an article in The Micomobility Reporter archives that covers data protection and backups. If you haven’t seen it l would encourage you to seek it out. It could be vital for you if a natural disaster comes your way).
Every business should have a written records/data retention policy which clearly states how long certain records/data should be kept. That policy should cover all records/data, both those with legal retention requirements and those without.
Earlier in this article I listed a couple of examples of records/data that might be worth retaining, such as sales records and inventory records. How long you would want to retain that data could be to your individual discretion, but that should be listed in your retention policy. Once a policy is established it is important that it is followed.
Let’s suppose your company is involved in a legal dispute, either civil or criminal. One of the first actions as a consequence of the dispute will be discovery, a request for all relevant documents to the dispute. Some may be readily available, and some may no longer exist. Having a written records/data retention policy in place, and in use, will explain unavailable documents, will alleviate any appearance of trying to hide information in discovery, and may lessen the scope of the dispute. However, if there is no policy and/or the policy is selectively enforced, meaning some records were purged while others that should have been purged were not, will add suspicion that something damaging is being withheld or hidden.
Deleting records/data legally and in accordance with a written policy is beneficial to your company for a couple of reasons. It frees up storage space that may be needed to store more current records. Deleting those records in accordance with that policy keeps your company in compliance with legal requirements. It also keeps your company in compliance with internal policies and eliminates the appearance that certain data is arbitrarily treated differently from other data.
Yes, it is important to secure your company’s records and data to protect them from unauthorized users or from becoming public. It is also important to delete those same records when they are no longer required legally or per company policy. What have you got saved?
Contact Steve Bina: steve@humanpoweredsolutions.com