There are two main purposes for the document retention policy. First, companies want their employees to retain certain records as required by law, and have those records available for references, audits, or other purposes. Second, companies generate a lot of documents through emails, memos, letters, contracts, and other records. A document retention policy provides an orderly way to dispose records in an expeditious manner after retention requirements are satisfied in order to manage storage costs.
Company records include all records employees produce, whether paper or electronic. Document retention policies provide guidance on which documents should be retained, and which eliminated. However, if employees believe, or the company informs them, that records are relevant to litigation, or potential litigation (such as a dispute that may result in a lawsuit), then employees must preserve those records until the company or its legal department determines the records are no longer needed. This exception usually supersedes the established destruction schedule for the records in document retention policies.
Failure to comply with a document retention policy may disadvantage a company in litigation, or subject the company to fines.
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