Efficient File Purging

How to Do it to Minimize the Time you Spend Doing It!

By Karin Vibe-Rheymer-Stewart

If filing is a pain, file management is even more of a pain, don't you think? I have a confession to make: I don't like filing any more than you do... I've just found ways to make it as painless as possible, so that I spend as little time as possible doing it. I hate it even more when I need to manage my long-term files. I have to say that the temptation is there not to do anything about them until the situation has become unmanageable. 

While I know what to do when my files get to that point, my clients often don't really know what to do, besides buying a new filing cabinet. Statistics have however shown that, of all the papers that are filed, 80% will never be touched again! So why not clear some space by getting rid of as much as possible of this 80%, and save on filing cabinets, archival boxes and storage fees? 

There is no hard and fast rule about when to purge your files. Some people choose to do it on a regular basis, most often semi-annually; others purge their files every time they take a file out; yet others do it when their file drawers become too crowded - by the way, "too crowded" is when you can't put a file back in place easily, i.e. when there is less than 2" of free space in your filing drawer. Choose whatever works for you, what's important is that you do it every once in a while. 

Once you know when you want to purge it, a frequent question is "But how do I know what to keep and what to toss?" Easy: Ask yourself the following questions for each piece of paper (at first it takes a while, but with practice this will take you only a few seconds):

·  Does this document exist elsewhere? Is it in another file? Or with a co-worker? In the general company filing system? If yes, you probably don't need to keep this document. 

·  Is it outdated? In other words, is the information it has still relevant? For instance, an old version of the company's policy is outdated and can be tossed, unless you are the HR archivist and then it has historical value. 

·  Is the information contained in this document elsewhere? Can I find this same information on the internet? At the library? If yes, I don't need to keep this document. 

·  Does this document have historical or legal value? In other words, does it pertain to the history of your company? Is it a birth certificate? etc. If yes, you want to keep it. 

Those questions make the task much easier, don't they? 

This said, while it is clear that certain documents must be kept, such as past tax returns, papers pertaining to a lawsuit, it's not always clear how long they need to be kept. Here are some guidelines, but, before I go into them, let me place a disclaimer: I am not a lawyer, I am not an accountant; these rules are just general rules of thumb and may or may not apply to you specifically. Every case being different, check with your accountant and your lawyer(s) FIRST before purging your files, so that you get a retention schedule that correspond to your specific situation. This being said, here are some retention guidelines: 

·   Bills: Keep for a year to a year and a half, unless they are supporting documents for business expenses or itemized deductions in your tax return.

·  Identity documents, such as birth certificates, passports, Social Security Card, etc.: Keep forever, or until expired AND replaced (for passports, for instance). This also goes for marriage certificates, divorce papers, etc. My mother needed her divorce papers to deal with my sister's estate, over 28 years later. Don't ask me why, I have stopped questioning what an administration wants a long time ago! 

·  Business identity: The same rule as above applies for all business identity papers, such as dba's, incorporation, by-laws, tax ID number, etc.   

·  Tax documents: The rule of thumb is to keep your tax returns (without supporting documents) forever, and the tax returns with supporting documents (bills, credit card slips, etc.) for as long as the IRS can audit you. I have seen both 5 and 7 years as this time, I would err on the safe side and keep them for at least 7 years. 

·  Insurance documents: Keep the policy for at least a year after the policy was cancelled, and the individual claims and communications from your insurance company for as long as they can revisit their decisions (check with your insurance carrier for the specific deadlines, it varies). Some people keep only the last proof of payment, I tend to keep them all, after all it's only 1 piece of paper per year. 

·  Law documents: Some are to be kept for as long as they are valid, such as a will, some forever, some for other periods of time. In particular, in the case of a lawsuit, make sure with your lawyer how long you need to keep the supporting documents and the ruling, they might be different, and different from case to case. 

Finally, after all this work, you may still find yourself with too many documents to keep in your file cabinets. One option is to buy a new one, but another option - which I personally like better - is to archive the papers you are pretty sure you won't need again, such as past tax returns and settled lawsuits. Bankers boxes are a great way to store them, as long as you make sure that they are at least 10" above the floor (just in case a pipe bursts or your basement gets flooded), and that they are not close to a pipe (again, just in case a pipe bursts and floods them). If you don't have this option, and/or if you store them in a place where rodents and insects occasionally gain access, plastic filing boxes with a tight lid are the way to go.  

Ó 2006 Karin Vibe-Rheymer-Stewart

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