Storing and retaining records might sound like one of the more mundane administrative tasks for businesses. Indeed, in this digital age, you might think that storage boxes and physical files were left behind in the 20th century. Canadian businesses have had a sharp reminder in recent months that document storage and retention is as important today as ever.
The wake-up call comes on the back of a document shredding scandal concerning a freedom of information request to a Canadian government department. CBC News reported that the Director of the government’s Public Service Commission proposed the “shredding or removal” of certain records.
The importance of retaining documents goes beyond government records, however. It is a topic that businesses across Canada in every sector need to take seriously, especially in the commercial hub of Toronto.
Rules for document retention
Every sector has its own rules regarding what documentation needs to be retained and for how long. Some sectors, such as those relating to healthcare and real estate, are stricter than others, and might even require that certain documents are retained in perpetuity.
As a general principle, however, most Canadian businesses can base their document retention and storage policies on guidelines set forth by the Revenue Agency. These require that businesses keep all required records and supporting documents for a period of six years from the end of the last tax year to which they relate.
The phrase “required records” is another that can be open to different interpretations. Again, it will depend on the type of business and the sector, but it typically includes the following:
- Daily income statements
- Daily expense statements
- Travel expense records
- Company vehicle expense records
- Company credit card bills
- Employee records, including personal details, salaries and deductions
- Customer / supplier contracts and agreements
- Customer / supplier correspondence
The following are typically required to be retained indefinitely:
- Deeds
- Minutes of board meetings
- Share certificates and transfers
- Any other records and documents that might influence the sale, liquidation, or wind-up of the business
Using offsite business storage
The above documents are just examples, and most business owners will be able to think of numerous other records and documents that they will need to retain. While some types of documentation, such as correspondence, are likely to be electronic, others such as deeds and supplier contracts are typically still issued on paper with ink signatures. A significant amount of documentation can accumulate over six years, and that’s where offsite business storage comes in, especially in cities like Toronto, where office space comes at a price of more than $40 per square foot per year. Secure heated storage can cost as little as $25 per square foot per year, depending on the exact location and the size of the unit.
This is just one reason storage units in Toronto are such an important part of the document storage and retention mix for businesses in Canada. Using a purpose built storage facility doesn’t just save businesses money, however.
It is also key to ensuring archived data is both secure and accessible. Some businesses look for the cheapest possible option and store their records in an improvised storage facility such as a barn or cut-price commercial outbuilding. This can ultimately be a false economy, as facilities like this can have problems with vermin or environmental factors. This means that when a business is asked to produce specific documents, there is a high risk that they will be damp or rodent-damaged.
Professionally operated storage units are environmentally controlled and have measures in place to protect documentation and other items from damage. Most are also accessible 24/7, so businesses can respond to document production requests quickly and professionally.
Why document storage matters
99 times out of 100, archived business documentation will never be needed again. But it is the one percent that can trip a business up, leading to costs and the potential for legal problems and adverse publicity. Retained documents might be needed by internal or external auditors, regulatory bodies or even lawyers in the event of a dispute.
In each of these cases, businesses must be able to produce requested documents without delay. Renting a storage unit on a purpose-built facility ensures Canadian companies can meet their document retention obligations effectively and economically, having all their retained documents to hand and safe from damage without needing to spend more money on prime office space in cities like Toronto simply for the storage of archive boxes and files.
