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Introduction to the Authoritative Guide to Records Management

Since Fellowes Incorporated published the 8th Edition of this guide in 1976, a minor revolution hastaken place in records management. In the past, virtually all business records were on paper –now a substantial portion are committed to microforms or stored in the memories of electronicmedia. This 9th Edition has been revised and updated to address these increasingly prevalentaspects of records management and storage.

This handbook also differs from previous editions in offering a new, easier-to-use format.Frequently-referred-to retention schedules have been simplified and, where records control andstorage documents are explained and discussed, sample forms are depicted.

Our goal has been to create a definitive source which offers authoritative information the businessmanager can reference quickly and conveniently. Use these guides with confidence. They arewritten to help both novice and professional records managers start new records controlprograms or improve existing ones.

One more change you’ll notice is our name.

To reflect our growing involvement in all aspects of office records systems, we’re no longerBankers Box Company – instead we’ve become Fellowes Incorporated under the sameownership and management, this broader corporate identity better reflects the wide range ofproducts we offer to business.

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THE SCIENCE OF OFFICE RECORDS

Fellowes Inc. has provided leadership in records management for over 80 years. The practicesoutlined in this handbook are the product of extensive experience. They have improved themanagement of records and produced measurable savings for thousands of businesses all overthe world.

The business world revolves around information. Information recorded on paper, microforms andmagnetic media…information in the form of correspondence, contracts, invoices, orders, reportsand hundreds more. Today, the volume of records – a fair share generated by computers, copiersand other advanced forms of the office technology – shows no sign of decreasing. Quite thecontrary. The average company usually doubles its entire volume of records every ten years! Tokeep pace with this “information explosion”, it is essential that business records be handledefficiently.

Record Keeping by Accident…or Plan. Weighing the Risks and Benefits

If your company operates without a records management and storage plan, you run the risk ofencountering problems down the road. Your organization may find itself faced with one or more ofthe following situations…any of which can be a severe drain of profits:� An unmanageable tangle of papers within the office� Wasted clerical effort searching for information� Loss of important operating information� Extravagant and wasteful use of high-cost, front-office space and equipment� Possible loss of key information for defense of your company against litigation or government

inquiries

On the other hand, a well-conceived and implemented records management program will presenta number of benefits which will have a positive effect on your company’s bottom line:� 40-50% of the space now occupied by unnecessary records may be used for other purposes.� Systematic disposal of records, which have outlived their usefulness, will prevent costly paper

accumulation.� Your company will be protected from accidental or premature destruction of records.� Reference retrieval will be faster…less executive time will be spent waiting for information.� Purchases of excessive office filing equipment will be avoided.� Potentially crippling breaches of corporate security will be safeguarded.

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THE LIFE CYCLE OF OFFICE RECORDS

Regardless of their type, retained records…once created…pass through three stages.Understanding this “life process” will be useful in following the system outlined in this handbookand assure an orderly document flow.

Active Use and StorageIn this “birth” stage, records are referenced frequently. Because immediate access is important,records remain in the office or close to the users.

Semi-active Use and StorageThis is the period when a record is retained for occasional reference and/or legal reasons. Itincludes those records which are scheduled for permanent retention.

DestructionExcept for certain vital records which require permanent retention, all others can be assigned apre-determined period of retention, after which they may be destroyed. This is the life cycle of allrecords. Whether a company is big or small, its records will pass through this cycle. It is themanner in which your records are handled that is the focal point of this handbook.

Records management – Who should be responsible?The selection of a qualified and dependable person with proper authority to execute the recordsmanagement program is essential to its success. In many companies the treasurer or comptrolleris best qualified for this assignment. This person is generally records-minded and budget-conscious – a logical choice to oversee a system that will generate both operational and costefficiencies. Most of the specific tasks related to the records management process can be carriedout by internal staff under the record manager’s supervision.

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The 3 Step Approach To Records Management.The records management system detailed in the sections which follow will assure an establishedpassage of documents from office to storage to destruction. To initiate this program requires onlythree steps…easily implemented by two forms and suitable records storage equipment. The threesteps are:

1. Inventory records. You should know what records you have, where they are located, and inwhat quantity.

2. Schedule retention periods. Determine how long each type of records should be held foractive or inactive reference…as well as when it may be destroyed.

3. Store records conveniently. Efficient storage is the key to a cost-cutting records program.

These three steps are not difficult or highly specialized tasks. But, once established, a recordsmanagement program – regularly cycling files through these stages – will continue to generatesavings.

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STEP 1: RECORDS INVENTORY

The first step in establishing a records management system is to conduct an “audit” or inventoryof all company records. This overview is vital. It establishes official record titles for all files,preventing the costly storage of several copies of a single record under multiple titles.

The inventory should identify the following:

✿ format – for example, paper documents, microform, magnetic media, etc.✿ types of records – for example, vouchers, correspondence, personnel files, including

information as to whether the records are duplicates or originals.✿ location – where the records are stored, for example, departmental file cabinet, basement

storage, warehouse, etc.✿ volume and quantity – identifying dates of records and their physical volume.

Some companies inventory their records by providing each department with a questionnaire.However, to insure accuracy, consistency, and the broadest possible overview of your company’srecords, it is best to assign the responsibility for this project to a specific individual and havehim/her conduct the survey in each of the departments.

Fellowes Inc.’s “Inventory and Retention Control Card” may be used to document your inventory.A separate card is filled out for each record series type.

You will be surprised how quickly you can inventory records using this functional card system. Forthe average office, utilizing employees familiar with the records, inventory should take one or twodays, frequently less. Generally one person can inventory 1,000 cubic feet of records in a week’stime.

If a large volume of old records seems a barrier to getting the program started, break-up theproject into smaller parts. First, inventory those records that accumulate most rapidly. Tackle thebalance later.

In making your inventory, you will probably find many records – duplicates and dead material –that can be destroyed immediately. Records management studies have shown that in offices thathave completed a records inventory, an average of 46% of the existing files were determined tobe non-essential and were destroyed. With the annual total cost of maintaining a single four-drawer file averaging over $600, your inventory should start paying dividends almost immediately.

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Filling out the “Inventory” Column

1) On the first line, enter the title of the record. If form numbers are used, add them. Watch forrecords that have more than one name. Settle on a single title and use it consistently.

2) Under “Inventory” write the name of the department that houses that record. If the samerecord is found in other departments, use a separate card for each location.

3) Check the appropriate square to indicate if the record is a Duplicate or Record Copy(Original). If it is a duplicate, chances are it can be destroyed as soon as its user is finishedwith it. The Record Copy is the official copy for which you will want to set a retention period.In designing your office forms with multiple copies, one copy should always be designated asthe “Record Copy” as this will keep everyone alert to its importance in the recordsmanagement system.

4) Under “Volume” enter inclusive dates of the series and the quantity. Note: The quantity canbe expressed in cubic feet, number of file drawers or linear inches. To convert file drawers tocubic feet, figure 1.5 cubic feet to each letter size drawer or 2 cubic feet per legal size drawer.Select the unit of measurement you find most convenient or easily visualized. Once youdecide, use it consistently.

5) Use the “Remarks” section to:

✿ pinpoint specific locations if a large area (basement or warehouse) is being surveyed or ifa single record series is scattered in several areas

✿ note departments which may have copies of the record✿ note anything about the record that indicates how long it is required in the administrative

process

6) The person making the inventory should sign and date the form when it has been completed.

Computerized inventoryAny information that can be organized on file cards can also be formatted for a computer. Withthe assistance of your office’s computer programmer, your excess computer capacity can be putto work managing your records management program. The computer can easily store initialinventory information…and update additional items on a continuous basis. Ultimately, it canmonitor the stages of each record’s life cycle – storage, retrieval and eventual destruction.

Particular care should be taken to assure that only those people with specific responsibility for themaintenance of records have access to the system. As it serves as the primary element of yourrecords management system, security is critical.

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STEP 2: RECORDS RETENTION SCHEDULES

Records retention schedules specify how long each type of record is to be held in the office foractive reference, in storage for semi-active reference and when it may be destroyed. A writtenand approved retention schedule assures the cycling of records on a fixed calendar. It alsoestablishes an authorized program for disposing of records that have completed their fullretention period.

These two elements – retention policy and authorization for enforcement are what weave yourinventory and your records’ life-cycle into a successful records management program.

Schedule Retention PeriodsAs you have no doubt noticed, your records inventory required only the left side of the controlcard. The right side is used to determine approved retention periods for the records described onthe left side.

Once the retention policy for a particular records series has been established and the transfer ofrecords to storage has been completed, this form may be used to create a master list of retentionschedules. Or you may choose to computerize the system at this point. In either case this formatwill enable the records supervisor to keep records cycling out of the office, into storage andeventually to destruction on a regular basis.

Filling Out The “Retention” Column

1) On the first line, enter the recommended retention period. This may be based on experience,what you have noted in the “Remarks” section, what other comparable companies are doing,or the suggested retention schedules found on the www.bankersbox.com website.

2) On the next line, enter the period the administrator of the record requires it for reference.(Notice that these managers are asked to sign only for the period of time they personallyneed a particular record for administrative purposes. This is not an overall “legal” or“executive policy” decision. Those are made below by persons directly responsible.)

3) Here the corporate attorney may indicate if, in counsel’s opinion, the record has any legalimplications or retention requirements…as is increasingly the case.

4) Next, an officer of the company reviews the previous opinions and enters the number ofyears management requires the records to be kept.

5) To determine the “Finalized Schedule”, the person responsible for the records programsimply enters in the “Destroy” column the longest period indicated above. This policy providesprotection against premature destruction of records while allowing retention period estimatesto be revised on an ongoing basis.

The other two columns are equally important. In some cases you may wish to consult again withthe administrator about this schedule, but with most records only the current and preceding yearneed to be available for active reference in front-office files. Typically, a company refers

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to less than 10% of its files over a year old. And, the cost of maintaining front-office records isnearly twenty times the cost of maintaining the same quantity of material in low-cost storagespace. So, you’ll find it pays to know the age at which records cease to require activereference…and the point your records are ready for transfer.

The original retention cards bearing the authorizing signatures should be saved as officialconfirmation of the records retention policies of your company.

Note: Professional records managers customarily obtain three levels of clearance in setting aretention schedule. This procedure gives a voice to each of the company’s principal authorities inrecords management and offers a simple technique for resolving any differences in opinion.

Inventory and Retention Schedule Summary.On one card, you will have a complete inventory of each record series, plus its authorizedretention period.

The records eligible for immediate destruction discovered in this process frequently provideenough savings to pay for the whole project in reclaimed floor space, filing equipment…even inthe salvage value of the old records as recycled waste paper.

In most newly implemented inventory/retention programs, Fellowes Inc. has observed that 20% to30% of records can be moved from relatively expensive front-office files to low-cost storage…andabout 40% to 50% can be destroyed.

Having determined a records policy, you will want to keep it in force on a continuing basis. Insome companies work is completed case by case (e.g., law firms, insurance companies,physicians or hospitals) and transfer of records may take place at irregular intervals. However, acalendar of periodic transfer ought to be established, with timely reminders issued to alldepartments. As a further measure, copies of the master list of retention periods can be circulatedto all departments.

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123 RECORDS TRANSFER

TransferTransferring records is the physical movement of records from expensive front-office space andfiling equipment to a low-cost storage area containing less expensive storage filing equipment.

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When to TransferMany companies transfer at the end of the business year – whether on a calendar or fiscal basis.However, certain records may lend themselves to more frequent or less frequent transfer,depending on the volume and extent of activity and reference.

Whatever the interval, there will be a point at which one period ends and a new one begins.Usually when this occurs there is regular activity in both the “current” period and the “previous”period for a considerable time. For example, if January 1 is the start of your new period, it may beFebruary, March or later before all the previous year’s documents have been inactively filed. Forthis reason it is convenient to keep both current and previous period records in the same filingcabinet. One way to do this is to use the two top drawers of each cabinet for the current periodand the two bottom ones for the previous period.

As periods are completed records are cycled from the top drawers to the bottom drawers andfinally to low-cost storage space. This simple system keeps records readily accessible during thetwo periods of greatest activity and, at the same time, provides a method for quick retrieval of stillolder records from semi-active storage.

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Records Transfer ListYou can establish greater security over high volumes of records in transit from active to semi-active storage by using a Records Transfer List.

This form records the contents of each box, assigning it a temporary box number until the filesare placed in a permanent location in the company’s storage center. It also facilitates clearcommunication between office personnel and those responsible for properly indexing records inthe storage center.

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STEP 3: CONVENIENT RECORDS STORAGE

Filing and RetrievalAs records are transferred to the storage center, a Records Storage Index and DestructionControl Card is completed for each record series. This may be done by the forwardingdepartment or the person responsible for the storage center, depending on your organization.(This can be computerized.)

In addition to serving as a convenient index to the records while in storage, this form allows youto use only file numbers on the outside of the containers, enhancing their security againstunauthorized examination. Further, this form acts as a certificate of destruction when the files nolonger justify retention. Proof of destruction has important legal ramifications, and these cardsshould be kept permanently.

Filling out the Records Storage Index and Destruction Control Card1) On the first line, enter the title of the record, using the same records title as in the inventory.

On the same line, indicate the department sending the record.2) As this and additional shipments of the same record are received in storage, they are posted

on this card. A new line is used for each container of records.Column 1 – Enter date container is received in storage.Column 2 – Enter container number.Column 3 and 4 – Enter description of contents by alphabetical, numerical or an alternatefiling system.Column 5 and 6 – Enter the inclusive dates of the contents.Column 7, 8 and 9 – Enter the specific location of the container in the storage center.Column 10 – Enter date records may be destroyed.

3) At the end of the retention period complete the card:Column 11 – Enter the date records are actually destroyed.Column 12 – The person who actually destroyed the records or witnessed their destructionshould sign here.

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Reference Request CardOrganizations which seek stronger control over their records or desire to check the retentionschedules against actual reference, may want to use a Reference Request Card.

This form enhances records security by recording each request for files. If the file leaves therecords center, the form documents the fact and the party or parties involved. When the filereturns, it insures its replacement in the proper storage file location. Similarly, a request card canestablish a record of information leaving the center by photocopy, telephone request or in-personuse.

In addition, this form enables you to reassess the retention period of a records series. If, forexample, you discover conspicuously heavy reference on a particular series during its first year instorage, this may signal a need for longer retention in the front-office. On the other hand, amarked decline in reference after a few years may indicate a need for revision downward in thefull retention period. By using the Reference Request Form, you have a true check on theaccuracy of the retention schedule and a persuasive tool in reducing retention periods withcompany administrators.

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DESTRUCTION OF DOCUMENTS

This section deals only with the destruction of paper documents. Unique aspects concerning thedestruction of other media are discussed in the sections on micrographics and magnetic media.

Monitoring the Destruction SchedulePolicing of the retention schedule is of vital importance at this stage. There should be a periodicspot check by an authority to see that the person responsible for destroying the records isadhering to the prescribed schedules. As a further safeguard, you may want to make destructionconditional upon a final review and authorization from individual departments at the end of theretention period.

The Records Storage Index and Destruction Control Card should be signed and dated by adesignated authority to verify destruction. This card should then be retained as a legal record ofthe destroyed files.

Controlled DestructionWhen destroying records, care should be taken with respect to the nature of the record and theinformation it contains. While material may appear to be useless or of little value, records such asinvoices, research reports and marketing studies are of definite value to competitors ordisgruntled employees. Payroll records are also extremely sensitive. Every organization createsinformation which, in the wrong hands, is a potential threat. Thus, a controlled method ofdestruction is necessary.

Methods of DestructionDocuments can be destroyed in a number of ways:✿ Burial – Disposing of material in a landfill area is declining in use due to the problems of

rising transportation costs and unauthorized retrieval.✿ Disintegration – Bailers, pulpers and similar equipment can completely destroy printed

material. However, the size and cost of this machinery makes this method unsuitable for mostoffice applications. This service is usually conducted by an outside firm specializing in large-scale projects.

✿ Incineration – Burning was once a popular method of destruction. However, the enactmentof environmental protection laws, the inefficiency of destruction and transportation costs tothe burn site makes this a less attractive alternative.

✿ Shredding – This has become the most efficient and economical method of destruction formost organizations.

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Shredders ExplainedShredders come in two basic types: “strip-cut” – which cut material into narrow vertical strips; and“cross-cut” – which cut both vertically and horizontally to produce small particles of material.Cross-cut shredders generally provide greater security as well as reduce the bulk of shreddedmaterial. Within these two categories, shredder equipment varies in throat width, speed, shredwidth, capacity, motor horsepower and optional accessories.

The following questions can help you determine the shredder best suited to your particular needs:

✿ What type of material will be shredded and in what proportion? (8_” x 11” sheets, computerprintouts, microforms, etc.)

✿ How much will be shredded during a one-hour period? (1 ream of bond paper, a box ofprintout, etc.)

✿ Is the material confidential or extremely sensitive?✿ Where will the shredder be located? (Is noise a factor?)✿ Who and how many employees will be authorized to operate the shredder?

You should also consider the following facts about shredders:✿ The throat width of a shredder should match the size of most material to be shredded.✿ Shred speed and capacity are dependent on the shred width and particle size; i.e., large

shred-faster speed and greater capacity, small shred-slower speed and lower capacity.✿ The shredder’s capacity should allow for future growth.

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MICROGRAPHICS STORAGE AND RETRIEVAL

A decade ago, the paperless office seemed to be the primary objective of many organizations.While the paperless atmosphere has failed to materialize, technology has provided us with viableauxiliary systems to hard copy storage.

Micrographics – Evolution and ChangeFor many years, as far back as the 20’s and 30’s, Micrographics was associated with therecording of cancelled checks by banks. Since that time, depending on the specific application,Microforms has proven to be a cost-effective medium for the storage of permanent records byreducing storage space. Many organizations continue to use Microforms for this single purpose.However, Microforms have evolved into a much more versatile medium.

Micropublishing, Computer Output Microform and Computer Assisted Retrieval were among thefirst technologies or processes to bring micrographics into the office setting. Actively used orcurrent information could be stored, retrieved and dispersed at a much faster rate, all with theadded benefit of tremendous space savings.

Micrographic Storage – Advantages / DisadvantagesA records storage system requires the storage, protection and organization of information at theleast possible cost. Given this objective, it is advantageous to look at the use of microform bothas active and inactive storage media.

AdvantagesUndoubtedly one of the greatest advantages of microform is the space savings. Depending onthe reduction ratio, a single reel of microfilm will store the same amount of information as severalfile drawers filled with paper; thirty microfiche store the same information as a single file drawer.

Other advantages include: 1) Ease of duplication – microform is easier to duplicate than largequantities of paper. 2) Standardization of size – paper still comes in a variety of sizes. 3)Durability – Microform will not deteriorate as rapidly as paper. 4) Greater security – because ofspecial equipment needed to capture and read the information, microforms may be more securefrom unauthorized access.

DisadvantagesThe primary disadvantage of microform or any image retrieval system is cost. In addition toequipment, which may range from several thousand dollars, depending on the system chosen,there are significant labor costs and overhead costs for maintaining a library…and training costsfor the staff which will use the system.

The bulk of records today are transaction documents – letters, invoices, purchase order, etc. –which have a relatively short life compared to documents or reference materials that need to bemaintained for longer periods of time. When large quantities of active material are maintained orrecords storage is incorporated into a larger office automation system, the payback period orreturn on investment may range from less than a year to several years, depending on the amountof information stored.

When microform is used for archival records storage only, the cost-recovery time has beenestimated at 12 to 15 years, again depending on quantity. As a general rule records retained forless than that time are most economically kept in original hard copy form in a corrugated recordsstorage file.

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Manual SystemsMicroform may, like paper, be retrieved manually. Unlike paper, microform information can not beviewed by the human eye. Readers or reader/printers are required to complete the retrievalfunction, so in a sense the retrieval method and housing device go hand in hand.

All housing devices should be sturdy, easily maintained and constructed of materials that are bothchemically neutral and anti-static to properly protect and organize microform. A variety of specialcontainers are available depending on the type of microform being used.

Microform, generally used for archival records, is often stored in carousel or drawer units.Microfiche, which generally stores actively used information, is often stored in desktop or portablesystems. Trays, tubs or bins – less expensive storage systems – will house large quantities ofinformation but often slow the retrieval process and provide less secure protection.

Individual pocket or panel systems, while more expensive, provide easier accessibility to often-used microfiche and provide the best protection available.

When microrecords have reached inactive status, it is preferable, as with hard copy documents,to relocate material to storage vehicles specifically designed for this stage. Corrugated containersare advisable…and economical. Systems such as these store large quantities of material inminimal floor space.

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MICROGRAPHICS STORAGE ENVIRONMENT

Because of the nature and composition of microform, special care must be taken to control thestorage environment. Eastman Kodak Company and the American National Standards Institute,Inc., publish detailed recommended specifications for climate control based on film type andanticipated storage life. These include constant temperature (between 68 and 77 degrees),controlled humidity levels (15% to 50%) and, possibly, air purification or air conditioning systems.

Microform records must also be protected from water or fire damage. Depending on theimportance of records, fire protection may vary from full protection in specially constructed vaultsand cabinets to that provided by more commonly used records storage equipment.

DestructionAs with all documents, you should exercise care in the appropriate destruction of microformrecords. The following methods are recommended:

✿ Disposal – If the information is of little value or not of a confidential nature, records may bedisposed of through the usual waste collection systems.

✿ Burning – Acetate-based microform can be burned, although this produces a somewhatunpleasant odor. Polyester-based films should not be burned, since they emit a highly toxicblack smoke.

✿ Shredding – This method is recommended for destroying microforms containing confidentialinformation. Only shredders designed specifically for microfilm should be used. Theseshredders have a special cutting system for this purpose and produce a particle size thatrenders the material unreadable.